Pathik Shah

Swoopo – the Penny Auction, Pay-Per-Bid Site – Files for Bankruptcy

Swoopo, one of the most brilliant money-making ideas that I had seen in execution – a pay-per-bid auction site, has apparently filed for bankruptcy.

It had a very innovative business model, in which the bidders in an auction paid for every bid, rather than the winner paying the final price of the item. On the surface, it seemed like you could get items for much less than their actual price (not accounting for the price of the bids), if you won. But those who lost the auction still had to pay for the bids. Once you started bidding, you were invested in it, and HAD to recover the price of the bids placed by bidding more, losing even more money in the process.

Every time someone bid, the purchase price and the timer were bumped up. The one who bid last won the item, which was quite easy as long as there weren’t many users. But Swoopo soon became very popular and attracted a lot of users, driving up prices of every item on auction, effectively printing money for the owners of Swoopo.

People even tried to game Swoopo by using custom bidding programs, but were no match against BidButler, the automated bidding program by Swoopo. If such a tool were available to just one bidder, he would definitely win, but since everyone could use it, the only winner was Swoopo. At its peak, it had millions in revenue and spawned many clones, most of which are already dead.

But it seems that finally its users realized that “The only winning move is not to play”.

R. I. P. Swoopo.

Using Game Theory to Attract the Hottest Girls on Online Dating Sites

As anything I add to this will probably decrease the awesomeness quotient of it, here it is. Unedited.

“A few months ago two friends and I decided to do something interesting. We live in a relatively small town. Not tiny, but small. On OkCupid we saw about 30 women from here, but they would not respond often. So we decided to create 50 fake accounts, all of them beautiful women that would divert attention. We meticulously constructed the profiles to look authentic. Then came the day to set everything in motion. My two friends operated the 50 accounts while I found the prettiest (real) woman I could and after a while decided to hit on her.

It worked. With everyone, particularly the hunks, occupied with fake women I secured a date with a woman who was most certainly out of my league. Two dates. Sex. Still seeing her, but wouldn’t want her or anyone else to know about how I got her.

I’m planning on automating this with some coding in the future so it will scale for when I’m in a small city or something.”

Genius, I say, if real. John Nash would be proud.

via Reddit

Just found this little anecdote which explains How a Bubble is formed and how/when it bursts. A simple explanation of the subprime crisis.

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Once there was a little island country. The land of this country was the tiny island itself. The total money in circulation was 2 dollars as there were only two pieces of 1 dollar coins circulating around.

1) There were 3 citizens living on this island country. A owned the land. B and C each owned 1 dollar.

2) B decided to purchase the land from A for 1 dollar. So, now A and C own 1 dollar each while B owned a piece of land that is worth 1 dollar.

- The net asset of the country now = 3 dollars.

3) Now C thought that since there is only one piece of land in the country, and land is non producible asset, its value must definitely go up. So, he borrowed 1 dollar from A, and together with his own 1 dollar, he bought the land from B for 2 dollars.

- A has a loan to C of 1 dollar, so his net asset is 1 dollar.
- B sold his land and got 2 dollars, so his net asset is 2 dollars.
- C owned the piece of land worth 2 dollars but with his 1 dollar debt to A, his net residual asset is 1 dollar.
- Thus, the net asset of the country = 4 dollars.

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This isn’t a review detailing why Delhi 6 sucked (IMO) or where it went wrong, it’s just about how a scene in the movie illustrates an excellent example of Game Theory.

There is a scene in the movie where Jai Gopal (the Black Friday dude) asks Gobar (Atul Kulkarni), the village idiot to choose between two 1 rupee coins and a ten rupee note. Gobar always chooses the two 1 rupee coins and the Jai Gopal proceeds to ridicule him and walks away after handing him the two rupees.

Near the climax of the movie, the Jai Gopal again asks him to choose between two 1 rupee coins and a ten rupee note and Gobar chooses the two 1 rupee coins again. At this point, someone asks him why he takes the two 1 rupee coins instead of the ten rupee note. He replies: “The day I take the ten rupee note, the game would be over.”

BTW, it was pretty dumb of him to reveal his strategy to others in front of Jai Gopal, as it ended the game anyway.

Most of us probably know about it already, but now it has reached such levels – about 200 million percent, that using Zimbabve Dollar notes is now more cost effective than using toilet paper to clean one’s ermm.. behind.

Using the official currency as toilet paper has become so common in Zimbabve, that a hotel in Zimbabve had to put up this notice.

LOL!

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