Wednesday, July 15, 2009

Step right up! You can't win if you don't play!

Suppose I'm raffling off a $1500 laptop and there are 3500 entrants in the raffle. How much should you pay for a ticket? My calculator says about $0.43.

Now suppose I'm auctioning off a $1500 laptop. Bidding starts at $0.01. You can bid the price up in $0.01 increments for the low, low price of $0.60 per bid. The winning bid is $35.

Personally I like those odds, but then I'm the one hypothetically running the auction. At $0.60 per raffle ticket -- I mean bid -- I'm getting an extra $0.17 or so per ticket, plus the $35 winning bid, for a profit of $635 on a $1500 item. And some lucky winner gets a laptop for $35. Such a deal!

There are apparently several auction sites out there doing just this sort of thing. The particular one I heard about was Swoopo, but as is so often the case the names will come and go while the game remains the same.

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