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18F's Micro-Purchase Experiment: Why I Bid $1

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Re: 18F's Micro-Purchase Experiment: Why I Bid $1

#91

Post by iaw »

jerf wrote: post #28
iaw wrote: post #24

Earlier quoted context omitted.

There's a lot of crappy things that are 100% free market. Oligopolies come to mind. Just because it's a free market solution doesn't mitigate the negative experiences this person created for the other bidders.

Just because someone said "free market" doesn't mean you are obligated to recite the generic Litany Against Free Markets. The specific point here is that in a free market you are welcome to decide to volunteer to do something. Nothing about "free markets" prevents it. If you judge yourself to receive more utility from volunteering, then go ahead and do it. No central organization will stop you. The idea that free mar…

This individual didn't volunteer to help the government. He undercut all competition in a competitive bidding process because his costs are $0 for the project.

This is one of the known failures of free markets, regardless of the actors intent the effect of his behavior is negative for those trying to participate in the market as a means of sustenance.

I'm not mad at the guy, he can do whatever he wants. It's just kind of a crappy thing to do knowingly to other people and, if widespread, could have some strange externalities.

Re: 18F's Micro-Purchase Experiment: Why I Bid $1

#92

Post by Lawtonfogle »

iaw wrote: post #24
Navarr wrote: post #18

Earlier quoted context omitted.

It's still 100% free market.

There's a lot of crappy things that are 100% free market. Oligopolies come to mind. Just because it's a free market solution doesn't mitigate the negative experiences this person created for the other bidders.

Even if the winning bid had been $3000, it wouldn't have changed the situation for everyone who lost the bid. By bidding $1, he only caused one person to lose the bid, which is whomever bid second lowest.

Re: 18F's Micro-Purchase Experiment: Why I Bid $1

#93

Post by iaw »

x5n1 wrote: post #27
iaw wrote: post #24

Earlier quoted context omitted.

There's a lot of crappy things that are 100% free market. Oligopolies come to mind. Just because it's a free market solution doesn't mitigate the negative experiences this person created for the other bidders.

Well the problem is self correcting. People will stop giving quality bids if they don't think that there is any profit to be made because a bunch of volunteers have destroyed the market. There is no problem here. Only that anyone bidding should be aware that they won't get properly compensated for their work and time.

Yep. Fully agreed. I think it sucks for the other participants because it wasn't the "intent" of the market. At the end of the day the market is going to yield a solution, intent doesn't matter.

Re: 18F's Micro-Purchase Experiment: Why I Bid $1

#94

Post by iaw »

zardo wrote: post #76
x5n1 wrote: post #27

Earlier quoted context omitted.

Well the problem is self correcting. People will stop giving quality bids if they don't think that there is any profit to be made because a bunch of volunteers have destroyed the market. There is no problem here. Only that anyone bidding should be aware that they won't get properly compensated for their work and time.

How is the market being destroyed correcting the problem? If people can't be compensated and work doesn't get done, the market is a failure.

The market isn't destroyed, it's just driven to zero. You can't force market participants to behave in the fashion you want. The market being driven to zero is one solution for the market, it optimizes for the people selling services and the people buying them, it just doesn't optimize for the profitability of those trying to make money off of selling their services.

Re: 18F's Micro-Purchase Experiment: Why I Bid $1

#95

Post by FF76 »

hamburglar wrote: post #74
Jtsummers wrote: post #63

Earlier quoted context omitted.

> So donating anything is elitist? Most things that are donated are things that someone else provides for a price, so you will always be "taking a job" from someone else. If you donate things then you're still buying it from someone, but giving it to someone that cannot afford them. So really, you're a surrogate purchaser. The problem comes in when you're donating time (via work) to a group that can afford to pay for…

> The ethics and morality of giving is kind of complicated. No, it's really quite simple. It's the ethics and morality (and circuitous justification) of being upset by others giving that's complicated. I built a friend of a friend a billing system for his fledgling business. Didn't charge a dime. I even got sucked in to support for much longer than I really wanted, since no good deed goes unpunished. Was it unethical…

> Should plumbers be upset about their work being devalued?

The problem stems from contributions that have a big impact. Big impact can be achieved by one person contributing a large amount, or many people contributing small amounts.

Another comment referred to this article where a Florida business man donated a million t-shirts to Africa that resulted in the textile industry bankruptcy: http://content.time.com/time/world/article/0,8599,1987628,00...

Was it bad just by giving away t-shirts? I don't think so. Was it bad just by giving away that many t-shirts? I don't think so either.

It was bad because his actions created a dependency on an unreliable source while removing the main income source that sustains reliable ones. If he subsidized the income loss of the textile industry, the consequences would not have been as devastating.

That's really the crux of the argument; giving away things for free generally takes income from dependable sources of labour. It's only when it has a big impact that people pay attention.

Going back to the topic, the same can be said about volunteering. I think it's okay if volunteering dislodges an entire industry as long as the volunteering is sustainable and reliable.

Re: 18F's Micro-Purchase Experiment: Why I Bid $1

#96

Post by iaw »

Lawtonfogle wrote: post #92
iaw wrote: post #24

Earlier quoted context omitted.

There's a lot of crappy things that are 100% free market. Oligopolies come to mind. Just because it's a free market solution doesn't mitigate the negative experiences this person created for the other bidders.

Even if the winning bid had been $3000, it wouldn't have changed the situation for everyone who lost the bid. By bidding $1, he only caused one person to lose the bid, which is whomever bid second lowest.

I understand where you're coming from but I disagree. Ignoring the emotional impact on the losing bidders I think that reducing the net payout of the market has a negative effect on all market participants.

If he won at a bid based on cost it would have kept the market at a price level comparable for all participants. He won the bid by ignoring all cost which has the effect of lowering the entire marketplace by pushing prices down.

Re: 18F's Micro-Purchase Experiment: Why I Bid $1

#97

Post by cortesoft »

Jtsummers wrote: post #63
cortesoft wrote: post #51

Earlier quoted context omitted.

So donating anything is elitist? Most things that are donated are things that someone else provides for a price, so you will always be "taking a job" from someone else.

> So donating anything is elitist? Most things that are donated are things that someone else provides for a price, so you will always be "taking a job" from someone else. If you donate things then you're still buying it from someone, but giving it to someone that cannot afford them. So really, you're a surrogate purchaser. The problem comes in when you're donating time (via work) to a group that can afford to pay for…

Ok, so I took away some work that they were going to pay someone for. What, though, are they going to do with that money they saved? They are probably going to spend it on something else, which will employ somebody. It just shifts where that money is spent.

Re: 18F's Micro-Purchase Experiment: Why I Bid $1

#98

Post by stuartaxelowen »

cortesoft wrote: post #52
yellowstuff wrote: post #49

Earlier quoted context omitted.

Any form of volunteering replaces some amount of paid work. The pros and cons need to be evaluated on a case by case basis. If volunteers do just enough free programming to drive professionals out of the market, it's possible the result will be that less work gets done. I don't think soup kitchens have the same risk.

Soup kitchens have the exact same risk. If those soup kitchens cook too much, they will drive restaurants out of business. Luckily, for both soup kitchens and programmers, this will never happen. There is more programming work to be done than programmers, and the markets aren't the same.

Soup kitchens and restaurants are not competitors.

Re: 18F's Micro-Purchase Experiment: Why I Bid $1

#99

Post by hamburglar »

FF76 wrote: post #95
hamburglar wrote: post #74

Earlier quoted context omitted.

> The ethics and morality of giving is kind of complicated. No, it's really quite simple. It's the ethics and morality (and circuitous justification) of being upset by others giving that's complicated. I built a friend of a friend a billing system for his fledgling business. Didn't charge a dime. I even got sucked in to support for much longer than I really wanted, since no good deed goes unpunished. Was it unethical…

> Should plumbers be upset about their work being devalued? The problem stems from contributions that have a big impact. Big impact can be achieved by one person contributing a large amount, or many people contributing small amounts. Another comment referred to this article where a Florida business man donated a million t-shirts to Africa that resulted in the textile industry bankruptcy: http://content.time.com/time/…

I think the big mistake people make when criticizing this $1 contract is imagining the logical conclusion if everyone worked for $1 instead of realizing that this is a one-off giveaway and it has zero impact on actual rates for this type of work. This guy is not going to continue doing $1 contracts, and nobody is going to respond by reducing their prices to below what they deserve. People can give things away. The reason plumbers aren't concerned about neighbors helping each other with their water heaters is that nobody is going to make a career out of competing with them by doing full-time gratis plumbing jobs.

Complaining about this is like saying the apocryphal jilted wife who sold her husband's prized Porsche for $1 has affected the price of Porsches.

Re: 18F's Micro-Purchase Experiment: Why I Bid $1

#100

Post by ploxiln »

Johnny555 wrote: post #44
USNetizen wrote: post #6

The problem with this isn't that the bidder wanted to do something noble, it's that it set a precedent that the government is going to expect on future bids moving forward. "Buying a contract" is nothing new - companies do it all the time (i.e. deliberately dramatically underbidding just to get the past performance). However, reverse auctions are a lose-lose for the government and commercial sector. This approach ass…

"For commodities, perhaps it works, but for IT you get what you pay for" Well, you don't, sometimes you just pay for overhead you don't need. My wife works at a small 15 person non-profit - I was shocked when I heard how much they pay for IT support from a small support organization. She asked what other choice they had, because they don't have anyone on-staff that can do it, and their old hardware needed a lot of su…

I have to agree, with digital technology, "you get what you pay for" breaks down completely. Sometimes the very best choice for one component is cost free, or very low cost, because reproducing that component 100% perfectly is pretty much free.

The big problem is identifying what is a good choice. If you don't know, you can't easily contract out the choice either, how do you know the contractor can or will make a good choice for you?

So the best outcome for non-technical organizations is to get lucky and know someone personally who knows what they're doing and has no ulterior motive - someone just like you. They don't really know if they know such a person. But if they get lucky and pick just the right helpful competent person to make IT decisions for them, modern technology can give them quite a lot for very little.

It's a perplexing situation.

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