Swoopo has invented a new auction business. Different from Ebay, Swoopo is with the following features:
- Bidding on Swoopo auctions starts at 15c, with no reserve prices.
- The price goes up by 15c with each bid placed.
- If a bid gets placed in the final moments, the auction is extended automatically by up to 20 seconds.
- Each bid placed on an auction costs $0.75.
As some netizens commented , this new way of auction is “manipulating game theory to tap stupidity, the greatest resource on this planet.” Think about a tiny deal–if you buy something worth 20$ with a successful bid of 15$, there have to be 100 bids, which equal to 75$. The bidders including yourself collectively have paid Swoopo $15+75=90$. Any item worth 150$ or more will bring Swoopo 750$ net profit. The auction is very much like a casino machine gamble. Only in Swoopo’s design, human beings form the machine. And because of human stupidity, Swoopo is going to run just like a machine, with the result and profit very predictable.
Swoopo calls it “entertainment auction”–this is disgusting. Swoopo makes bidders reveal their stupidity, watches, and mocks them while money piles up on its account.
Now, how do we beat swoopo?
Since the design of swoopo is based on the assumption that human beings collectively will act in a stupid way, we can beat swoopo if we somehow reshape our collective action in swoopo auction.
Here is how we do it:
Outside of swoopo, bidders have to form their own association–Association of Swoopo Bidders (ASB)–make some decisions based on simple calculations, and enforce the decision.
One item is posted on Swoopo, and its value is 225$. The Association of Swoopo Bidders (ASB) figures that if the item worth 225$, the highest bid should not exceed 37.5$. (Just follow this formula: highest bid=value/6) THe ASB then makes a dicision that no member should bid more than 37.5$.
Then ASB will enforce the rule, meaning for any rule-breaker bid more than 150$, the rule-breaker’s name will be published on the ASB website immediately, and at the same time ASB will appoint its enforcement force (some members with free bids provided by ASB) to bid against the rule-breaker, who therefore will not be able to get the item or pay substantially more than the price the rule-breaker wanted. The enforcement force will continue to punish the rule-breaker in the future auctions ruthlessly until the rule-breaker apologizes and convinces ASB nothing against rule will happen again.
–Note the point is whoever places the first bid above 37.5$ will NEVER get the item. In addition, the rule-breaker bidder will not get anything in the future.
Consequently, rule-breakers will be prevented from unnecessarily bidding high, and all members of ASB will have a fair chance of getting cheap goods.