Escalation games markets in everything

Dick Thaler writes:

Swoopo has even sold cash using this format – specifically, checks for $1,000. My colleague Emir Kamenica and I looked at 26 such auctions we found in a data set posted on the Swoopo Web site. For each of these, the average revenue to Swoopo was $2,452. Winning bidders also did well: Of the winners, all but two made money even after accounting for the cost of their bids, with an average profit of $658. Still, the important point to remember is that, collectively, bidders are losing money. Only the lucky last bidder is a winner.

At the end of the column Thaler adds:

In my previous column, I tried to nudge Steve Jobs to have an app written for the Apple iPhone that would allow users to sign up easily to become organ donors.

Mr. Jobs can relax. Raymond Cheung from Serenity Integration read the column and made it happen. IPhone users can download the free Donate Lives app and sign up directly on their phones.


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