Swoopo the Crack Cocaine of Penny Auctions

Mark Gimein, for  Slate’s “The Big Money.com,” wrote an article yesterday on Swoopo entitled “The Crack Cocaine of Auction Sites.”

Mark writes:

“Swoopo.com is the most efficient, addictive way to separate people from their money.

Some winners do wind up with good deals. A few, on the other hand, wind up paying almost as much in bid fees as the item they’re angling for was worth in the first place. Meanwhile, the losers can shell out hundreds of dollars in bidding fees before throwing in the towel, and end up with nothing. What makes Swoopo so fiendishly addictive is the tendency of people to think of the bids that they have already put in as a “sunk cost” money that they have already put toward buying the item.

This is an illusion. The fact that you have already bid 200 times does not mean that your chance of winning on the 201st bid is any higher than it was at the very beginning. A new bidder can come in at any time and at the cost of a mere 60 cents jump into the auction in which you’ve already spent more than 100 bucks. The money you’ve put in has gotten you no closer to the goal than a losing raffle ticket.”

Read the full article.

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