

Penny Auction Scam Exposed by USCD Math students - cellis
http://www.pennyauctionwatch.com/2012/02/arrowoutlet-scam-exposed-penny-auctions/

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ChuckMcM
It is interesting but its not clear that the robots are actually
ArrowOutlet's. There are a number of ebay 'sniper-bots' which take your actual
maximum bid price and will enter that price precisely 1.0 seconds before the
auction ends if the price is currently lower than your max.

If you sell stuff there it can be fascinating to what 30 - 100 bids arrive
with 1 second to go. But those snipe-bots are being 'driven' by humans who are
trying to minimize the price they pay for something.

The statistics work was very nicely done though in the paper.

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therobot24
there are a few arguments that are presented as to why the robots most likely
belong to ArrowOutlet:

<http://arrowoutletinfo.com/robots.php>

When reading the article, you have to click "[Who are these robots?]" within
the table in the center of the page.

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twiceaday
Am I missing something? What rule are those sites breaking? They are clearly a
scam. If you sign up and play by their rules and give them your money than
it's your fault.

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Lazare
Yes and no. The stated rules of these sites are profoundly unfair (even evil)
but they are not, in and of themselves, scams. After all, someone has to win,
and it's at least theoretically _possible_ that the winner will have actually
spent less than the items retail cost to get it. To quote Wikipedia's example:

    
    
      For example, if an item worth $1,000 sells at a final price
      of $60, and a bid costing $1 raises the price of the item
      by $0.01, the auctioneer receives $6,000 for the 6,000 bids
      and $60 as the final price, a total of $6,060. This
      represents a profit of $5,060 for the auction site.
      Assuming the winning bidder used 150 bids in the process,
      they would have paid $150 for the bids and $60 for the
      final price, a total of $210 and a savings of $790.
    

Of course, in a real auction, the winner may well end up paying more than
$1,000 for the item...but still, it COULD work. But if bots run by the
auctioneer always bid on items, then no actual person ever wins. In fact, the
merchandise wouldn't even exist. (Why have a warehouse full of PS3s if nobody
but the company ever "wins" an auction for one?) It's like a slot machine that
never pays out.

And that would be fraud. (Also, an example of shocking greed, considering that
the normal penny auction format is effectively a license to print money.)

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neemaux
UCSD!

