Swoopo: This Could Become A Problem.

Perusing Andrew Sullivan this morning I saw a blog post entitled, "ebay Meets Online Gambling," which is a siren's call to me as potent as a barker's call of "free pizza with free porn." He was referencing an article from Slate called "The Crack Cocaine of Auction Sites"---again, this only served to hype my interest. The article pertains to the "auction" web site Swoopo.com, something I was blissfully unaware of until about an hour ago. I now fear a new phase of my life has begun, and it's probably not going to be a pleasant one.

The concept behind Swoopo is really quite genius. It's so genius I can't believe it's legal. The Slate article cites an example of a MacBook Pro Computer, brand new, which retails between $1300 and $1800 depending on how good of an online shopper you are. One of these sold on Swoopo yesterday for $35.86. How is that possible?

For each "bid" the price of the computer goes up by a penny and Swoopo collects 60 cents. To get up to $35.86, it takes, yes, an incredible 3,585 bids, for each of which Swoopo gets its fee. That means that before selling this computer, Swoopo took in $2,151 in bidding fees. Yikes. In essence, what your 60-cent bidding fee gets you at Swoopo is a ticket to a lottery, with a chance to get a high-end item at a ridiculously low price. With each bid the auction gets extended for a few seconds to keep it going as long as someone in the world is willing to take just one more shot. This can go on for a very, very long time. The winner of the MacBook Pro auction bid more than 750 times, accumulating $469.80 in fees.

"The very, very long time," is somewhat of an understatement. I've been watching some of these auctions go on for an eternity this morning. It's mesmerizing. Utterly hypnotic. I'm not sure what the longterm future of such a business model would be, but I suspect that, after a time, people would get sufficiently beaten down by having spent so much money in the pursuit of an elusive dream. Then again, much like playing the slots at a casino, one good spin of the wheel will keep you playing (and losing) and coming back for more long after you've concluded how stupid it is to be playing (and losing) something in which the odds are so heavily stacked against you. Jonah Lehrer summarizes Swoopo's devious appeal best: "It's one near-miss after another, as we bid and then bid again. The experience feels awful - we know we're wasting money - and yet we can't look away." If you've ever played slots at a casino, you know this feeling well. You've spun 100 times and lost, but you don't want to walk away and have the next person spin once and win the jackpot. This feeling, the "sunk cost" theory of gaming, is what makes Swoopo work so well.

What a brilliant scam. I can't wait to be its next victim.