Most buyers don't have the time and skills needed to get the bargains seemingly offered on penny auction websites.
First you buy bids.
A single bid can cost over fifty cents.
One bid counts for one cent on the price the penny auction website price. That's possibly why they are called penny auctions and not because you can really buy stuff for pennies. The revenue going to the seller is a big multiple of the penny price and probably over 50 times.
So you have to do some math and what seems cheap may be 50 times or more as expensive. But you are not the only one placing bids and really odd things can happen so have your psychology text next to you. Bystander effects occur when others stand by waiting for you to exhaust your 'little' pile of bids. Some people will have major piles.
After your bid you wait while others get a chance to bid, even at the closing se one's when all the fun begins. You try to minimize your number of bids, but what if the bidding ends as the number of bidders visible increases exponentially. Some lucky guy wins by surprise to everyone who thought the game was unending!
It's a perverse bystander psychology that operates to run the numbers higher and higher until the inevitable point when people give up, not because they are far from winning, but because they are extremely close. This is the tipping point to the end of the contest!
The sites show you the math and they give you an out which is to just pay their asking price for your item and credit your bids at the sum of the cost price of the bids.
If you want to bid for something pricey like a camera or iPad, you will find it is very hard work to get it.
You may make a small number if bids, but you will probably have acquired skills with tedious effort akin to playing a complex computer game!
All the warnings needed are posted, but it's not for those that are not used to doing probability math!
Try a hypergeometric statistical theorem and add in bystander psychology along with the difficult mathematics of avalanches and you might win consistently.
Twitter: @wuhlax
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