Purchasing products on E-bay's auction was easy, simple, and well... I always won. I'd just go in last minute to place my bid and sure enough, an Xbox 360 would be shipped to my house the following week.
But Swoopo is a completely different beast to tame. What makes this auction website unique is each bid costs 60 cents to purchase, and bids can be purchased in packs of 40, 75, 150, 400, and 1000. Bids can only be incremented by 1, 2, or 6 cents - even for items such as laptops which may cost well over $1,000.
The winner is the last person to place a bid by the end of the auction time. However, each time someone places a bid, the auction time is increased by 20 seconds, giving everyone a "fair" chance to play.
Some websites have reported wins for a refrigerator at only $9.66, a laptop for $23.27 and a video game which only sold for $5.88. But this doesn't include the money spent on placing bids. (Remember, each bid costs 60 cents!)
It's quite a brilliant business plan, if I dare say so myself. Swoopo is essentially profiting from all the bidders, whether they win or not - and granted there is only one winner, this effectively means there were many others who spent money on bids.
It's a combination of e-bay and the thrill of Las Vegas swirled into one, served with a scoop chocolate ice-cream on the side.
Another fascinating, probably less obvious element of this website, is the psychology behind the decisions of the users. The fact that many of these users have invested time and money into objects, poses many questions. To what lengths are these users willing to go? Is this technically a form of gambling? How does competition play out for an item of high demand? If there are any economics nerds looking for an experiment , I'd suggest looking into the "market decisions" and relating it to behavioral economics. - are people still rational?
I assume the only way to actually win an auction is to be stubborn and extremely persistent, and glue yourself infront of the computer screen until the auction is complete.
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