Neurovid: How to sell a dollar for more than a dollar
An all-pay auction in action. Basically, everyone who bids pays the amount of their highest bid — so, because of the sunk cost of your bid, you have an incentive to keep bidding, even as the price of your bid goes over the original price of the item.
Freakonomics explains the allure of these auctions here and discusses a new business that takes advantage of the concept, Swoopo.com.
HT: MR
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