41–50 of 135 posts
trading the stock market has negative expectancy as well, if you count in trading costs (against just owning the index like the S&P 500 or the MSCI world, with almost no trading costs) Is running the NYSE immoral?
http://en.wikipedia.org/wiki/Sunk_cost#Loss_aversion_and_the...
Pardon my ignorance... Why does the author call this website illegal? I'm not sure what laws they are violating.
He doesn't say that it is illegal, only that it's so shady that it's likely someone will make a law against it. It could fall under gambling laws, since you're basically buying chances to win the opportunity to buy something at a low price.
"Wait, so let me get this straight, people routinely 'buy' $100 for $20 on your service, and you profit $300 from the transaction from selling the 'bidding rights' to 'non-winning bidders'?"
"Yes."
"Oh, thanks. What determines who wins?"
"Final bid price."
"But paying $20 for $100, why, anybody should offer to pay $21.15 right?"
"Yep, you have to pick when to make your bid though, so you are not outbid."
"That sounds totally random, like a lottery."
"No, it takes some skill."
"Ah, thank you for clearing that up. Now, in your copy of the state code, look up 'games of skill' which offer a monetary prize."
Wow. This is both genius, and despicable. It's amazing what kind of profit they drive, yet it seems like they're really taking advantage of people with gambling addictions, or poor money management skills.
Pretty much every business takes advantage of the fact that the consumer is lacking something, whether that's knowledge, time, money or material. It's the way capitalism works.
Wow. This is both genius, and despicable. It's amazing what kind of profit they drive, yet it seems like they're really taking advantage of people with gambling addictions, or poor money management skills.
Isn't that what most businesses do?
I've always been fascinated with the game theory, math, and psychology behind these schemes. There's a bunch of variations of the auction model that can guarantee or nearly guarantee a profit. One of the more popular auction models is to make the winner the person with the lowest unique bid, but it costs to place bids.
The lowest bid game is equivalent to simply giving it to the last person who bid isn't it?
Reminds me of the old party game, Dollar Auction. Bidding's in 10-cent increments, and the prize is $1. The twist is that the top two bidders pay their bids, but only #1 gets the prize. Bidding will go far past $1 because, even though it's a loss to pay $1.10 for $1, the 90-cent bidder would rather lose 10 cents than 90. I've heard of bidding going up into the $20 range.
What they're doing is most probably not illegal. What they are doing is leveraging a lot of little things to make themselves good cash. Let's be very clear - they use auctions. This is not a lottery. At the end of the day, the high bidder "wins" and pays the amount of the high bid to win the auction. Then Swoopo adds the (.75 * number of bids placed) to that figure. It's not inconceivable that that sum is less than M…
Except you CANT guarantee yourself a win, and you certainly can't guarantee yourself a win at any price. It IS essentially random what the bidders competing with you do in response to your "last" bid.
Of course you can. Every time you bid you extend the auction, therefore if you're willing to pay the most you will win. (Now, that amount may be worth more than buying the item in a store somewhere, but that's beside the point really)
What they're doing is most probably not illegal. What they are doing is leveraging a lot of little things to make themselves good cash. Let's be very clear - they use auctions. This is not a lottery. At the end of the day, the high bidder "wins" and pays the amount of the high bid to win the auction. Then Swoopo adds the (.75 * number of bids placed) to that figure. It's not inconceivable that that sum is less than M…
Its not an auction if bidding costs money regardless if you win or not. Its more of a raffle.
What they're doing is most probably not illegal. What they are doing is leveraging a lot of little things to make themselves good cash. Let's be very clear - they use auctions. This is not a lottery. At the end of the day, the high bidder "wins" and pays the amount of the high bid to win the auction. Then Swoopo adds the (.75 * number of bids placed) to that figure. It's not inconceivable that that sum is less than M…