Comment by jerf | Hacker News Reader

Comment by jerf | Hacker News Reader

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Not so much. I wrote about this in more depth here: http://www.jerf.org/iri/post/2888 and I won't entirely repeat myself, except I would point out that they sometimes run "special" auctions where the "auction" price is free, and all you pay is the bid price. In that case there is 0 ability to "win"; it's straight-up gambling.

Even in the case where you are willing to put a lot of money into a "full price" auction, the ability that someone else has to put one dollar + auction price in and defeat your 2 * auction price dollars in bidding + auction price makes it unlikely you will win without "investing" radically more than the value of the product. (Especially since they are trying to create a bidding war between 2 or more people each of which are unaware of the "sunk cost fallacy", or at least not able to act on it.)

I'm not sure what metric you would prefer, but if you feel it's dumb and not gambling, I would invite you to try it. Me? I'll be over here, not trying it. I can work the math. But feel free to let us know how it goes.

If you'd like an easier metric, just go to the site and find a currently active item. Simulate yourself hitting the "bid" button, and keep track of how often you do it, and whether you win the item. Until you sit there and watch the counter in real time (as I did on a couple of items), you can't feel how this site works.

(And since Swoopo may end up here, I'll repeat what I said on my blog: I am completely uninterested in hearing from you, Swoopo.)

Although it may be evil and expensive, it is absolutely not gambling. The last person to bid, wins. There is no chance, no draw, no random event. The last person gets it.

More accurately, you win if yours is the last bid to reach the server. You have less control over that than you think. Unless you pay for their premium service, of course.

Except getting the item is not winning. It's only winning if you pay less than retail price.

No, and this is where most people make the mistake. The winner of any auction is the last and highest bidder. Whether or not it is rational to bid more than retail is irrelevant to determining the winner of an auction. People conflate "I would never do that" with "no one would ever do that".

You didn't understand my point. Winning is not getting the item. I define winning as paying less than it would cost at Amazon or wherever you would buy it. If you pay $20 in bids plus $50 for an item that costs $65 at Amazon, you lost $5 (even if your time is free). Yes, you "won" the auction but the real winner in economic terms is the house.

[edit: what is the point of participating in an auction for commodity goods other than to pay less than retail? I assume that people who take part in this site do it in the hope of coming out ahead, not to win an auction at any cost even if it means paying more than the item is worth. I don't see how users of this site can confuse "winning an auction" with winning in economic terms]

"I define winning as"

You don't get to redefine words to support your personal opinion, and still have a valid argument.

That definition is the only one that makes sense from an economic standpoint. If you spent $100 on an item that cost $90 on Amazon, you lost. I don't care if you won the item. The winner of the auction is not necessarily the winner in economic terms, and that's all that matters.

[edit: what makes a game of chance is the point that you win or lose money, not whether you win or lose the auction. I'm not confused, I'm just not getting distracted by the semantics of "winning the auction" vs. the real objective you are after]

You need to substitute "winning" for "being an idiot".

It is an english language problem...If you spend $90 on a $50 item, you lose because you are losing money.

We are talking about lose in the "win/lose" usage of the word.

You're not wrong, you're just confused.

Do I lose when I get a soda from the soda machine at work instead of purchasing it in bulk?

Do I lose if I purchase it in bulk from costco instead of pooling the resources of my friends, starting a company, and buying directly from a distributor?

Is the soda machine a "game of chance"?

The answer to all of these questions is "no". None of them are games of chance.

This would be a game of chance if it was "pay $10 and you might win, but we won't tell you until the end" instead of "pay $10 and if somebody pays $11 we will tell you so that, if you chose to, you can bay $12. This cycle will continue until the item reaches a point that nobody is willing to spend more for the item"

This is not a game of chance because you get to CHOSE if you are going to win, and they TELL you if you will before the conclusion of the auction (or game, in your description).

You ARE simply confused about this, because it isn't possible for a rationally thinking person to make the argument that you are and mean it.

Each bid is an independent gamble - one bid buys you one chance of winning. Many bids increase your chance of winning, but do not guarantee it (bidding wars can be infinite).

The difference is that in the cases you mention you know the price you are going to pay in advance. In this case you don't. The price changes as you spend more money to bids. You have no way of knowing what the final price will be and you are gambling on whether you'll get a good price. I repeat, if you have infinite money you will get the item if you want but that's not what you are gambling on.

In a real case, if there are two or more people as determined as you, it is impossible to predict who will get the item. All will be spending money in advance without knowing who of them will get it. That's why it's a gamble.

Does the auction keep all of your money if you lose the item?

As in...if you bid $10, then $12, then $14, are you actually spending $36 + bidding fees?

Because if you're only paying for the item once you win it, that is NOT a gamble.

Yes, there are fees involved. This is customary for EVERY auction. (I don't know about ebay, but visit a real-world auction sometime).

So the lottery isn't a gamble because you could win by buying all the tickets?

This doesn't appear to be true. In an article linked to by the story: http://jcs.org/notaweblog/2009/03/06/trying_to_game_swoopo_c... we are told that last-second manual bids had a possibly suspicious tendency to get lost, and it is hard or impossible to win without using their (evil) helper software.

You are inventing absurd definitions of gambling to support your incorrect, defeated argument.

The fact that one will usually lose money with that site does not change the fact that the winner is the person willing to spend the most money.

"I would point out that they sometimes run 'special' auctions where the 'auction' price is free, and all you pay is the bid price. In that case there is 0 ability to 'win'; it's straight-up gambling."

If there is no cost of entry then it isn't a gamble, because a gamble requires you to risk money. Quit inventing definitions to support your defeated argument.

"I'm not sure what metric you would prefer, but if you feel it's dumb and not gambling, I would invite you to try it. Me? I'll be over here, not trying it. I can work the math. But feel free to let us know how it goes."

That is a red herring. Correctly pointing out the fact that it is not a gamble, does not mean that I think it is a wise use of my money. Do not use such intellectually dishonest tactics to try to change the subject from your failed argument to one that I did not address.

You are conflating the inability to control the price with the inability to control the outcome.

> If there is no cost of entry then it isn't a gamble, because a gamble requires you to risk money.

No. He said that they only charge you for the bids, and not for the item, in these special auctions. So if you bid twice and win, you pay only 2 x $0.15, whereas normally you would pay 2 x $0.15 + whatever your highest bid was (I hadn't heard about these special auctions before, it seems like people would just keep bidding forever.)

Gambling is betting on an uncertain outcome. The uncertainty is not in whether you can the item (you can get it if you keep bidding forever). What's uncertain is whether you will get the item for less than its value. This is what makes it a gamble.

You define the outcome as winning the auction. That's dishonest. The outcome is whether you'll spend more or less than buying the item outright at retail price, which is what you are competing against.

"You are inventing absurd definitions of gambling to support your incorrect, defeated argument."

Are you a politician or something? That is an incredibly dishonest phrase to use and you should be downvoted for that alone. (Though I note with some pleasure it hasn't seemed to have worked.)

I'm pretty comfortable with this definition of gambling. You are not in control. Part of the scam is that you think you are. But you are not. Your comprehension is being successfully hacked.

Try it. Since you apparently won't understand until you do, try it. Then get back to me. See just how much control you have.

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