Too good to be true - Would you trust it?

[monkey0506]

So completely on a whim, I clicked on this advert I saw. It was for Swoopo apparently some "new" kind of auction site where every bid increases the auction by $0.15, and you purchase bids at a cost of $0.75. I supposedly just sat here and watched someone bid on $1000 cash, and won it for just over $101, after placing 43 bids (at a cost of $32.25) still netting him over $865.

Now we've all been warned against this type of thing before, and "if it seems too good to be true..." You know the rest.

But I would be above putting some money down if I felt that I could trust I would get such absurd returns as this. So, would you trust this site?

[Mr Flibble]

Absolutely not.

It could be an out and out scam, or the auctions could be rigged, and even if neither are true, a lot of people in that auction you described lost money. The more you bid for the money, the less you receive. It's a clever business model really.

[ThreeOhFour]

I worked in a bank for three years, and from my experience the people who get the most burnt when it comes to playing with money are those who are the greediest.

Sure, you might click on some buttons and walk away with $1000 that only cost you $130 odd.

You also might stroll into Vegas with nothing but a twenty and walk out with a cool million in pocket. How many people try this and actually succeed?

Call me paranoid or unwilling to take a risk, but this is one offer I can refuse.

MrFlibble beat me and I agree with him but am posting anyway

[HillBilly]

I don't think it's a scam just a site that runs on losers. Like Vegas.

[Darth Mandarb]

I am weeping ...

Just weeping.

[Andail]

What do you mean by "it's too good to be true"? That someone won an auction? Someone has to win. This has nothing to do with the "free meal" argument; in such a model, everybody wins.
Remember that for every person who wins an auction like this, there's a number of people who don't win, but who've helped increasing the auction price.

To reach $101 there need to be over 670 bids, which means other people spent some 500 dollars (granted that the winner only stood for 43 bids) for nothing.

Imagine that you participate, and you want to win a new plasma TV, worth $1000. When will you decide that you have spent enough? What if plenty of other people keep bidding? It's a psychological phenomenon that people keep placing far too many bids in auctions than they first planned. I for one would never go near such a site.

[Akatosh]

I'm mainly envious. It's a great way to exploit suckers.

I also remember reading about an interesting psychological experiment in this vein. Basically, a professor held an "auction" during a lecture. The offer was a dollar; bids started at five cent. The catch? The person with the second highest bid also had to pay, but without receiving the dollar. Everything went as expected until about 60 cent; most people wisened up and stopped bidding. Two people kept bidding, though. It got interesting when Person A reached a bid of one dollar. At that point, Person B realised he'd lose 95 cent if he quit now, but if he went along - purchasing 1$ for 1.05$ - he'd only have a loss of 5 cent, and so he went on. Person A continued in the same way - losing 0.10$ is still better than 1.00$, right? - as did B, then A again, and so on.

The net result? The professor aborted the auction at an offer of thirty dollar each, and two students were the laughing stock of the university. The lesson? Greedy people are idiots when it comes to money. I wish I could recall the name of this experiment, though.

[zabnat]

We have couple of these type of auctions under investigation if they broke the lottery law. Also there have been numerous reportings about the counter going to zero and then after some time it would reset... On these auctions bids have been 1 cent and bids would cost 1,5 to 0,80 euro. The investigation is based on if the winning truly is based on the actions of the bidder or is it based on chance.

[Paper Carnival]

I clicked on this advert I saw.

I think that's the problem right there. In my experience, whenever you have to click on an advert to find out about something, it's most likely not worth clicking.

[monkey0506]

I figured this would spawn some interesting discussion.

I'm not planning on signing up anytime soon. Just wondered what others thought about a site like this.

Myself, I'm more into convincing Swedes to mail me checks for $5000....

[Gilbert]

Well, I never trust online auctions, no to mention those which claimed you can win incredible amount of money.

I think the lotteries for American greencards are more authentic. Maybe I'll try them out one day.

[ThreeOhFour]

I'm mainly envious. It's a great way to exploit suckers.

I also remember reading about an interesting psychological experiment in this vein. Basically, a professor held an "auction" during a lecture. The offer was a dollar; bids started at five cent. The catch? The person with the second highest bid also had to pay, but without receiving the dollar. Everything went as expected until about 60 cent; most people wisened up and stopped bidding. Two people kept bidding, though. It got interesting when Person A reached a bid of one dollar. At that point, Person B realised he'd lose 95 cent if he quit now, but if he went along - purchasing 1$ for 1.05$ - he'd only have a loss of 5 cent, and so he went on. Person A continued in the same way - losing 0.10$ is still better than 1.00$, right? - as did B, then A again, and so on.

The net result? The professor aborted the auction at an offer of thirty dollar each, and two students were the laughing stock of the university. The lesson? Greedy people are idiots when it comes to money. I wish I could recall the name of this experiment, though.

I can't figure out whether this makes me sad or happy. 

[Gilbert]

Depends on whether you are a runner of such auctions/sites.

[ThreeOhFour]

Sadly/happily I am not.