Ask HN: Review my startup - Banksta | Hacker News Reader

Ask HN: Review my startup - Banksta

16 pointsF50V1239 comments

Check it out at http://banksta.com/

In short, Banksta is a simple and fast-paced auction site. It pairs up users anonymously and randomly as they bid against each other for an item. The highest bidder wins the item while the second-highest bidder forfeits their bid. This was, of course, inspired by Professor Bazerman's classic in-class example of human irrationality. And in staying true to that inspiration, we are currently allowing users to bid on 20 dollar bills. But we would like to expand into other items.

We think it would be remarkably insightful to watch real users actually use the site. So please feel free to explore the site. You can click on 'BID FOR FUN' to get a feel for how it works.

Would love your feedback on the idea, execution, and its direction!

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For lack of a better, more constructive comment: This is no good.

This is clearly the framework for those shady penny auction sites like beezid, quibid and whatever the hell other thousand clones have sprung up.

These sites are unethical. I feel like your about page is trying to present banksta as some other more positive purpose when it's really not. The design is lacking and of course the sample bidding thing consisted of me clicking a button... not sure what I was supposed to get out of that...

I do not support your site.

You're right, they are unethical and they face some problems at the moment. In germany swoopo is laying of 50% of their staff and dealstreet closed. The main problem is, that their "customers" never come back once they've been ripped of.

This is incredibly silly because nobody will ever win a $20 for less than $20. As an example, let's say you & I are bidding on the $20 bill...

- After bidding for a while, I eventually place a bid of $19. At this point if you quit I make $1 and you lose $18.

- So now you bid $20. At this point if I quit you would break even and I would lose $19.

- So now I bid $21. Why bid $21 on a $20 bill? Because if I win I only lose $1 (rather than $19) and you lose $20.

- Now of course you would rather lose $2 than $20, so you're going to up the bid to $22, right?

I'd be interested in hearing from somebody more knowledgeable than I in game-theory: When should an agent quit bidding and accept their losses?

When I read the loser will "forfeit" their bid I took that to mean the bid is voided or cancelled, so I don't lose anything. But in your scenario it is much harsher and therefore much much much more stupid of a proposition.

No, truly, in this style of auction (sometimes called an entrapment auction), the loser does genuinely have to fork over whatever their last (losing) bid was.

Which, in my opinion, is even worse than the bidding fee auction (used by swoopo) model.

I'm not an expert in game theory (I just had a half-completed econ degree once upon a time) but your analysis is spot on as far as I can tell. The pareto efficient outcome is for the first agent to bid $1 and for the second agent to quit without bidding. If there is a counter bid, then the first player will have an incentive to bid higher to avoid a loss. The second player would then have to counter bid in order to avoid a loss as well, and so on. At the $20 mark nothing changes: at that point both players are now trying to minimize loss. In any case, any other alternative from the pareto efficient $1 vs $0 bid will cause at least one agent to have a less preferable outcome, and hence that strategy would be chosen by a "logical" player.

Maybe more interesting would be to have each agent pick a bid in advance and reveal the bids simultaneously. Of course, the optimal strategy there would be to just bid as close to $20 as possible and hope for winnings to accumulate over time.

And in all of this it's not clear how the proprietor of this site will make money out of this deal.

Feel free to correct me if someone thinks this is wrong: perhaps there is a reason I never finished that degree. :)

Users have a real shot at winning 20 dollar bills for less than face value. The reason for this is whenever a user cannot be paired up with another, he/she is paired up with a bot that chooses a max bid in advance and at random from a specified range. Once the auction hits this max bid, the system will quit and the user wins. The expectancy is in favor of the site, of course, but only marginally so.

So, like a casino? Is that even legal?

Similar to a casino in that there is an element of chance that plays into the results. But dissimilar in that we're looking to build this into a fast-paced auction site for different items.

How can a user trust your bot? So essentially, the only way to win at this game is for it to no longer be human-to-human interaction?

What exactly are you studying? Human willingness to gamble their money away based on the potential that the thing on the other end is really a stupid bot?

As you might imagine, I cannot control the results of user v. user auctions. But in an effort for users to trust my system's bot, I am prepared to post actual results of the last n real user v. bot auctions.

Strange game. The only winning move is not to play.

A strange game :)

(http://www.imdb.com/title/tt0086567/quotes#qt0453844)

I stand corrected :)

How about a nice game of chess?

So when does the bidding end?

There would be no reason to ever stop bidding. To avoid losing your money, all you have to do is make another bid. Your opponent will probably realize that if he doesn't out bid you again, he's going to lose a lot of money. So he out bids you. Which really pisses you off, until you realize that you can avoid losing your money again if you just make another bid. The game goes back and forth until one of you dies of an overdose. Then the game ends by default, but the winner will have a tough time collecting his money from his dead opponent.

The logical player wouldn't start bidding, unless they bid first. The illogical player presumably would stop bidding when they get tired (or have changed their billing information so that they can't get charged for their bids!).

While I was getting my econ degree, all of my game theory classes and most of my classes that discussed game theory used this as an example.

There is no way to win if the cost of bidding is 0. If there is a cost of bidding and that cost is 10 cents for example, the only way to win is to bid $19.90.

However, if you're required to play, the most efficient outcome happens when you're the first to bid and you open by bidding $20. You're neutral on outcome and have satisfied your requirement to play the game.

I think there is a psychological problem with the game when the prize is so small and the incremental losses/bets are so small.

If the prize was say, $10,000 and the minimum bet increment was $5, people are more likely to bet higher and higher because losing $5 (at a minimum) is psychologically more defeating than losing $0.01 (at a minimum).

EDIT: Didn't realize the site was 1v1. It would work better if there were several people. There is absolutely no incentive for a player to bid beyond $20 if the losing player doesn't have to pay their bid.

Sites like this make me very angry.

My first instinct would be to see how the site handles large numbers. The best outcome would be for both (fake) participants to continuing bidding until the values wrapped and they both end up having to pay a large negative number, thereby winning big :)

For a lot of questions here concerning the psychology of the $20 bid:

http://mfinley.com/experts/bazerman/bazerman.htm

This sounds like the scam auction sites which are actually gambling, as described by Jeff Atwood here: http://www.codinghorror.com/blog/2008/12/profitable-until-de....

Sorry to be harsh if I understood this wrong, but right now it sounds like this is nothing more than a way to get money from people who don't know better. It might work, but I'd never go there myself.

This is highly unethical. Like Jeff Atwood has said, they're gambling: http://www.codinghorror.com/blog/2009/05/penny-auctions-they...

Here's the best tip I could give you: Hire a designer.

Personally, I don't see a business here. I even tried to bid for fun and it wasn't fun. I guess you're trying to create a new form of gambling?? The thing for me is that it sounds like such a losing proposition I don't know why I would risk my money. There are plenty of other forms of gambling that, at the very least, have better odds, surely..?

How do you prevent gaming the system with a limit of two bidders? With low user numbers at a given point in time, is anonymity enough?

With an unlimited number of bidders it's not dissimilar to the pay per bid model used by the likes of MadBid and Swapoo and at least as potentially profitable, at least until the point the government realises it's essentially gambing and decides to regulate accordingly.

Gaming the system was an early concern - one that we believe we solved.

your site just screams scam to me...not only the actual business model, but the actual design too

http://www.sinfest.net/archive_page.php?comicID=2952

What software are you using to deliver the auction status updates which appear directly below the image of the $20 bill?

Clickable: http://banksta.com/

This is really a banksta paradise!

(not that real banks are much better, mind you)

Are you pairing only 2 people for an auction?

Yes, that's the idea. In the event that another user is not available at the time a user joins an auction, that user is paired up with a bot.

Why limit to only 2 people?

No reason really - 'cept to study one-on-one auctions.

Are you trying to "study" auctions or make money? You need to be more explicit about the goals of your site and as other people suggested: hire a designer.

Another really bizarre aspect of your site is the use of Adsense. If this is supposed to be a real business why attempt to make some small pocket change off Adsense? It's really quite confusing.

These things all add up to make you seem untrustworthy. 3 things to do:

1. Clarify your purpose. 2. Clean up the design. 3. Get rid of Adsense.

Unless you're a content site that is living off ads it makes no sense to have Adsense. Given that you're running a gambling site, the inclusion of Adsense just makes it seem even more obvious that you have this naive get rich quick ambition.

4. Move it out of the jurisdiction of Costa Rica... no?

I doubt you connect users at all. With bots you can control your cash flow.

- Why would the auction loser forfeit their money?

- Bidding on a $20 bill is stupid.

- I understand you wanted to get it up fast and try it out, but you couldn't design it a little better?

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