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.
I don't see why it's despicable. The format of the auction seems to be clearly available to all participants. It's all consenting adults, who have all of the information needed to make their own informed decision as to whether or not to participate.
If people want to gamble, why not let them? How is this any different than operating a casino? It's not wrong to provide a service that many people deem enjoyable just because a small portion of them can't exert the self-control to use it responsibly.
I'm not sure it's despicable, but the difference to gambling is that gambling is sold as purely entertainment. The fun _is_ the product. Swoopo mentions entertainment as well, but they also make people believe that they are buying a product for a good price, which is clearly not the case.
So as a (potential) customer I'm taking note that this company is using deceptive tactics, claiming one thing and structuring their system to do something else. Yes they do it openly, so it's up to everyone to not buy from them and to remember not to buy from this company and the people behind it ever again.
Yes, but if you try to buy several products in this way you're not always winning, so the average price each individual pays per successfully purchased product will be awful, or the business model wouldn't work.
Right. Which is fine because that's the entertainment aspect of it. You're playing a game where the goal is to get a product for the best price, and you know it. And if you don't succeed, you lose some money, and you know that too.
Seems like a fun game to me, I'm already thinking about how I might be able to take advantage of it.
"How is this any different than operating a casino?"
Operating a casino requires a license for a start afaik, and there are checks to ensure things are fair.
How do we know the winning bidders actually exist?
I agree people should be able to make their own minds up in the main, but they should be doing that safe in the knowledge that they are being treated fairly.
Isn't that endemic to any auction site? eBay knows your max bid and could easily have bots forcing up the incremental bids to earn themselves more fees. Perhaps all auction sites should be audited, but I don't see how this one is any worse than the rest.
And sadly the licensing requirements for online casinos are a joke. Read up on the Kahnawakee Gaming Commission some time, you'll get a kick out of it. Until we legalize and regulate them, they'll never improve.
This is actually a really good point. Why does anyone entrust eBay with knowledge of their maximum bid? A hypothetical shill-bot 9000 could easily bid up auctions without ever having to worry about accidentally having to own the item. It seems like it would be far better to have your own bidbot handle things for you...
People have speculated about this on eBay from day 1. Personally I tend to believe its untrue only because they're a large company and certainly someone would have blown a whistle by now. The bot would have to be in-house to know people's maximum bids, and no individual employee would have incentive to create such a thing, so it would have to be a top-down directive.
So does the government and many charities, the entire city of Las Vegas and churches on Saturday nights across the country, every major sports league (not often directly), etc etc etc.
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.
No. Capitalism is a system of decentralised decision making on resource allocation, ultimately leading to increased productivity and innovation.
I have no idea how a ponzi scheme that makes "simple" people overpay fits this description as it leads to incredibly bad resource allocation.
You could argue that such failures are part of capitalism and I would agree. But they are still failures. Capitalism depends on such failures being fewer than those cases where funds go where value is being created.
An annoying attitude. I spend 2 dollars on a box of crackers. Here's the rough process:
1. Farmer takes out a loan at Wells Fargo.
2. Loan clears, Farmer buys seed, etc.
3. Farmer grows 2000 acres of wheat.
4. Summer passes, farmer harvests wheat, and it travels 1000 miles to be processed.
5. Nabisco (Altria) buys wheat for a pre-agreed price (determined months ago by the Chicago futures exchange--a bunch of speculators who took risk on themselves so Nabisco and Joe Farmer could get to business.)
6. Nabisco puts the wheat (plus 10 other commodities) into its industrial mixers, ovens, packaging machines, fleet, etc, until it winds up at Walmart.
7. Walmart (which did 1001 separate things in order to make the deal go down) puts a $2.00 electronic price on the crackers.
8. I show up, put some plastic through a device, some digital numbers go through 2 thousand miles of wire to 5 different financial institutions, and then I get a box of crackers. Game over.
I've participated in 500 billion dollars worth of business without even realizing it, getting a day's worth of calories for a tiny percentage of my daily income. That's "evil" somehow?
Where exactly did I say anything about evil? The goal of business is to fleece its customers of their money. Some do it in nicer ways than others but they all do it, poor money management skills on the customers part is always good for business. Our entire consumer economy is based on that fact; we spend all of our excess money rather than saving it like we should.
I didn't directly say you should save all of your money, I said you shouldn't spend all of your excess money. You should be saving for an emergency fund, retirement, kids college, things you want to buy in cash rather than putting everything on credit. American are horrible at this, they live right at the edge of, or above their means rather than below it as they should.
The farmer is farms land stolen from Native Americans.
If we go by the odds it isn't some farmer taking out a small loan at Wells Fargo, most wheat is grown by big agribusiness.
The yield on the wheat is so high largely because of government funded fundamental research into agriculture and biology, including genetic modification, which has revolutionized things. Much of this publicly funded research is done by universities under grants from the NSF and such, and they are allowed turn around and sell the resulting patents to the agribusiness conglomerates. Not exactly a free-market miracle.
Wal-mart often demands public subsidies from small towns in order to put their store there, leveraging their massive outside scope and bargaining power with suppliers to be able to make their case to the municipalities.
