Bidding fee auction: Difference between revisions
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==See also== |
==See also== |
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* [[Auctionair]], an auction based web site that charges bidding fees. Has both High and Low Bid auctions. |
* [[Auctionair]], an auction based web site that charges bidding fees. Has both High and Low Bid auctions. |
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* Sweepola.co.uk, a lowest unique bid auction website. |
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* [[Dollar auction]], a [[game theory]] experiment similar to penny auctions |
* [[Dollar auction]], a [[game theory]] experiment similar to penny auctions |
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* [[Swoopo]], a defunct web site which charged bidding fees |
* [[Swoopo]], a defunct web site which charged bidding fees |
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Revision as of 11:08, 2 September 2011
A bidding fee auction, also called a penny auction, is a type of all-pay auction in which participants must pay a non-refundable fee to place a small incremental bid. When time expires, the last participant to have placed a bid wins the item and also pays the final bid price, which is usually significantly lower than the retail price of the item. The auctioneer makes money in two ways: the fees for each bid and the payment for the winning bid.
How it works
Participants pay a non-refundable fee to purchase bids. Bidding on an auction raises the cost of the item by a fixed amount and typically also extends the deadline of the auction. The game is a brinkmanship game: each successive bid lowers the value of the reward, and the last player to decide to place a bid and lower the value of the reward wins that reward.
Once the auction is over, the auctioneer collects the final cost of the item in addition to the monies already collected by selling bids.
Each bid increases the price of the item by a small amount, such as 0.01 USD (1¢) or 0.01 GBP (1p), and extends the time of the auction by a few seconds. Bid prices vary by site and quantity purchased at a time, but generally cost 10–150 times the price of the bidding increment.[1] Due to the possibility of participants spending a lot of money and still losing an auction, or spending more than the retail value of the item they end up winning, some analysts have criticised the model.[1][2][3][4]
See also
- Auctionair, an auction based web site that charges bidding fees. Has both High and Low Bid auctions.
- Dollar auction, a game theory experiment similar to penny auctions
- Swoopo, a defunct web site which charged bidding fees
- Unique bid auction, another auction style in which bidders pay for entry and ending prices are very low
References
- ^ a b http://www.codinghorror.com/blog/archives/001196.html
- ^ Gimein, Mark (2009-07-12). "The Big Money: The Pennies Add Up at Swoopo.com". The Washington Post. Retrieved 2010-04-26.
- ^ http://www.codinghorror.com/blog/archives/001261.html
- ^ http://technologizer.com/2008/09/17/is-swoopo-nothing-more-than-a-well-designed-gimmick/