Swoopo: The crack cocaine of auction sites
thebigmoney.com
thebigmoney.com
If they end up selling 100 people the same five Wiis (1 at a deep discount, 4 at retail), it is still the same business model from the perspective of 95% of the participants of the transaction, who end up spending a lot of money but get no Wii.
I refuse to call them an auction site because that is just sheep's clothing. Their model has absolutely nothing intrinsically auction-like about it -- take a look at their "auctions" for CASH in which the putative "bid price" will never actually be paid by anyone. It just exists to sucker more people into paying scam participation fees.
How is it possible that the same people placed the same bids (in the same order) and end up with exactly the same amount for two different items in two different countries?
http://www.swoopo.com/auction/apple-macbook-mb466ll-a-13-3-i... http://www.swoopo.de/auktion/msi-x-slim-x340-su3523-weiss-/1...
(The links above are provided in the followup).
What is the probability of this happening? This means that even if they were all following these two items and placing the bids in the same order, nobody else outside of this group has placed a bid.
But check out the related auctions across the top for both pages -- the same numbers with the same winning bidders with the same (or similar!) products. All of them. So Germans are indeed bidding against US users -- one in dollars, the other in Euros? That doesn't make any sense
http://www.swoopo.de/auktion/fujitsu-siemens-amilo-xi-3650/1... http://www.swoopo.com/auction/asus-n90-series-n90sv-x1-18-4-...
Same ID number at the end of the URL. All the auctions appear to span both sites: http://www.swoopo.com/auction/x/194481.html http://www.swoopo.de/auktion/x/194481.html This one actually does the dollars to euros conversion properly
So clearly people just get an item "similar" to the one they won. You'd think for the massive house advantage they have, they could at least deliver the exact product that you thought you won.
Pierre Carion then pointed out that as far as he can tell, the API doesn't even count the type of currency. So even though it's not remotely fair, a 100 USD bid will beat a 99 EUR bid just because it's the most recent bid.
See the comments here: http://www.techcrunch.com/2009/06/26/unique-auction-site-swo...
In the interest of philosophical discussion... why is maximizing profit using knowledge of consumer behavior "evil" so to speak?
If someone uses their available knowledge and decides to enter a swoopo auction, is it really much different than choosing to play at a casino even though we know the house is against us (gambling's existence is something that few outside government seem to have a problem with?)?
Is the major hang up that people can pay but not win? If this is known up front can someone provide the rationale behind this being "evil"?
Funnily enough I find that the debate over swoopo being evil seems to parallel the debate over spec work being evil (just different currencies involved).
Can someone point me to literature on the rational arguments for and against consumer protection?
I wouldn't go as far as saying this auction idea is 'evil' but I personally feel it is morally dubious. This site was put together by probably quite talented people with knowledge of game theory. How are these people using their talent? To make the world a better place, to forward the human race or to take money off others who are more ignorant than themselves?
These auctions have losers who lose money and gain nothing. Maybe those who lose enjoy the chase. However, I personally wouldn't be comfortable working on a system such as this.
Seriously, if you don't think of this as evil, what's your definition of evil?
gambling's existence is something that few outside government seem to have a problem with
Um, what planet are you from? At least 3 major world religions (Judaism, Christianity, Islam) regard gambling as evil.
I recognise that some religious traditions take guidance from more than just the official holy books, but even the official Catholic view seems fairly neutral: that gambling is not immoral in itself, as long as certain conditions are met:
It's not anything like widespread enough that you could say it was a "Christian teaching," though. While you can still find people who say it's sinful (and you will always be able to), it's getting so that standard Southern Baptist Sunday School materials say, "Is Gambling a Sin? Well . . . not reeeeeaaallly . . . but we don't think it's a good idea." And I think those guys are usually just about the last to let go of issues like that.
The fact that Swoopo promotes itself as an auction/shopping site and lists "strategy" as part of the experience skates uncomfortably close to the "no fraud" clause listed in that link, although offering discounts to losing bidders would seem to give them a solid "it's only gambling if you choose to treat it that way" out.
Gambling is considered a form a stealing since the person who lost doesn't actually want to give their money to you, they are forced to by the roll of the dice. In normal commerce you get something when you pay. (And don't say people enjoy playing, no one enjoys playing, people enjoy winning.) I believe, but am not sure, that lotteries are not considered as bad though.
I could easily make a dozen arguments where respectable companies do exactly that. For instance, is Starbucks preying on the "weakness" of humans that desire caffeine? Is EA preying on the weakness of humans that desire an escape via gaming? By your definition of evil, everyone and everything participating in a capitalist economy is evil.
Frankly i see nothing wrong with Swoopo, even if some end up worse off than they would have been had they not participated. This is because i place the burden of responsibility on the actor, not the facilitator. Caveat Emptor.
Perhaps not everyone, but it seems to me that a large portion of firms in a capitalist economy prey on some human weakness or another, to varying degrees.
Wow.
I take it you have a really, really broad definition of "human weakness" for this belief system to continue working for you.
Car broken and I can fix it for 20 bucks? You have a weakness for not knowing how to do auto repair. Need a good resume and come to my resume service? You have an inability to write and a lack of work, due to a weakness of the system. Need a program to balance your checkbook? You obviously have a problem with math, could be lazy in your account habits, etc.
This kind of definition will work anywhere -- suggesting that perhaps a new one would be better.
Obviously not all exchanges are free and ideal, but both the cases you cite (Starbucks and EA), it's pretty close. I'd say 100% in the Starbucks case (you can get coffee from lots of places) and a little less so in EA's case due to the fact they have an IP monopoly on EA games (you can not obtain a Madden game from a non-EA source), but still, nobody's forcing you to buy Madden games either.
Swoopo is not like that. It is not a mutually-beneficial exchange between two parties; one party wins and numerous parties lose, with only one other party winning in theory (the auction "winner") and that still only at the discretion of Swoopo (if the "winner" is a plant, how would you tell?). Because the losing party entered into it freely and with reasonable knowledge of what is going on, I do not favor forcibly shutting it down either, as I can not imagine what such a law would look like anyhow. But we can still call a spade a spade; this is not like a free market exchange. This is a con game.
(The other possible out is that the auction losers are paying for an intangible feeling of fun or something, which is a valid thing to do if you choose not to judge people's value functions, but I suspect that a fair analysis would show that they are not really winning on this front either. Part of that analysis would be to show that Swoopo is the best way to obtain that feeling and I have to imagine a conventional casino is a better choice there for most people.)
Till this point, I thought you were defending Swoopo and your logic actually made sense to me because the parties involved in the auction have different valuations. If a person spends USD 10 bidding on a product, the mere possibility of having a USD 1200 product for such a low price may be more valuable to him than Swoopo's valuation of the transaction (USD 10). Plus the suspense and thrill adds to the valuation by the bidder :)
And no one is forcing someone to bid on a Swoopo auction as well.
Read fail?
I should perhaps have said that I was simply looking for someone to explain the sides so I can make a better decision about how I view it rather than just taking the viewpoint of an article in slate as certainty
They also regard all manner of activity evil that most people (and even adherents) find perfectly acceptable and engage in every day. Bacon, beer, and shamefully clad women come to mind.
So let me ask what planet you are from. Have you ever gone to a casino and asked the gamblers what their religion was?
Because people can be deceived. Math is hard. If I were to belive Coding Horror, even Paul Erdos didn't understand the Monty Hall problem.
If you take profit on people's naivety, you're evil. Because every human being is ignorant about something. We're not perfect. We're not always right.
BTW, I'm in favour of gambling, when it's clearly marked as such. You don't get better at Swoopo by playing Swoopo, you only win by not playing it all. To say Swoopo labels itself as a system where luck does not play the main role is deceiveing.
See here! This is the problem with ads. You see ads, you click it, and you regret it. This author would be better off without ever having seen the ad.
Block ads. They are bad for you.
Unless you like to enjoy newspapers, television, free content sites, Spotify, or the like, of course.
(For the record, I don't think it's a terrible thing or should be illegal, no matter how profitable.)
On one hand I think it could make some cash while not being as dodgy as a regular gambling site, but on the other hand I don't want to encourage gambling addicts with the positive feedback.
I'm just glad it's not my only money-spinning idea :)
Imagine you enter a casino and someone offers you the following game:
There's a red button, one push costs $1. Anyone may push as often as they want and can afford. If the button isn't pushed for one hour then the last person who had pushed receives $1000 USD (fixed).
Fine you may think, I'll come here at thanksgiving when nobody is around and push it then. Except that there's always this one sleazy guy lurking in the corner, even at thanksgiving, with that strangely swollen thumb and an seemingly unlimited budget...
Maybe there are people working for them by placing bids until they win every item.
It would explain this: http://news.ycombinator.com/item?id=700250
Even with the new option to buy the products at full price, it would still be a scam since they've acquired customers by cheating them into thinking they would have the possibility to buy at a discounted price.
Anyway, there's an issue with the transparency of their operations which is not required in an auction site like ebay since on ebay the winner of the auction must be real, in order to buy the item from the seller.
You simply have a few "good friends" run a bidbot-script on some leftover machines. That's near impossible to detect (just create new accounts and cycle credit cards regularly) and makes the scheme entirely bulletproof.
It "smells" bad - but I can't logically find anything morally wrong about it.
They could have people acting as shills, "winning" the items and ensuring that no goods ever have to actually be delivered, or even exist at all. This would be impossible for a casual user to detect.
Two thoughts come to mind. First, it's a rigged game: don't start playing it. Second, people are going to clone this business model. Swoopo is simply one of the first-movers.
I was pondering variations on Swoopo, and think I went and made it even worse: I would cross it with an MMORPG.
Would people do this with real money for virtual goods? Would they trade things that would have more monetary value later for things that have less monetary value now? Could you just write an app that had people pushing a button for "free" cash? Is there a tie-in to social networks? Could you tie it into the iPod, or an addictive game? with the right combination, the whole thing could go viral.
The idea of "cheating" people doesn't interest me -- If I did something like that I'd be clear about this being for entertainment value only and I'd even support limits on the amount of play per day. It's just the rest of the man-machine interaction that's so cool here. Are the people somehow "broken" and the machine is taking advantage of them? Or is this just entertainment, no more different than going to Vegas for a weekend?
The Natrium Bag of Discount, an item which give you 5% off on bids.
The Necromancer class, which can resurrect dead auctions, and kill top bids (with a 15m cooldown timer).
The Tamer, which can invoke pet-bots that automatically bid $0.25 each.
I really think you're onto something here derefr... a system that gives you the possibily for real life money manipulation, self-loop'ed into skill/item progression!
If this is a scam, so is, say, charging folks 15 cents to send a text message.
In both cases, the end company ends up making a windfall of money. In both cases the customer knows exactly what he is getting and agrees to it.
it's ripping stupid people off left and right
To the first-time visitor it is not clear at all that they are basically playing a lottery with a very low payout. Calling it an auction is misleading because in an auction you only pay if you place the winning bid. This is more like a raffle, but it's not labeled as such.
1. Write a script that will pull this info once a second
2. Analyze it - You're interested in predicting when a person will quit bidding so that you can join the auction in the latest possible moment and win the item with a minimal number of bids. You have time series of each user's bids (with a distinction of whether they were made manually or automatically) and a dollar value of the item price.
3. ...Profit!
Could this work?
The author does some interesting pattern analysis of how auctions actually work, and concludes (roughly) that you can't beat BidButler.
i'm pretty sure the last idea i proposed on part two would work fairly well. have the script watch bid activity and when it looks like there's only one other user using bidbutler, turn it on and let it spend money. as soon as a third user starts using bidbutler, turn it off to save money and let the other two fight it out. since both users probably won't use the same price ceiling, it should be pretty clear when one user drops out and the other keeps bidding with bidbutler. at that point, turn it back on and repeat until you're the last one using bidbutler.
In the link above provided by JimmyL, the author says that he wrote such a script (and gives a description of his experiment). Try to email him, I think he'll share it.
http://www.swoopo.com/auction.html?cm_re=Homepage-_-Grid-_-1...
Let's hop on over to newegg: http://www.newegg.com/Product/Product.aspx?Item=N82E16822148...
Yikes. I think I'll tick to ebay for my auctions.
BTW, I can't figure out who pays the $73.20 for the 122 bids. Where those the bids of the user? Or was that total bids from everyone?
The hook is that as you walk past the shop you see that you have the chance to get a play station for $1. So, you and about 100 other people pay $1 with the hope of getting a play station. After everyone's put their money in then they "randomly" select 5 people in the audience and hand over the play station to them.
Of course after the show, the audience "plants" secretly give the play stations back. So, in essence they keep recycling the same play stations all day long and real punters keep paying $1 and not getting anything.