Cognitive Design

On Swoopo you can bid using a new model called “entertainment shopping” to buy all sorts of items ranging from consumer electronics to household items. Here is how it works:

1. You give them money, at least $20.  You buy the right to bid in an auction. It costs $1 to place a bid, win or lose.

2. Find an item you want and place a bid. This increases the price by 15 cents and automatically extends the bid clock by 20 seconds.

There are no reserves.  By paying for the right to bid this creates the possibility you can get a super good deal (lottery like effect)  and also means you will tend to bid not wanting to loose the investment you made (sunk cost bias).  

Entertainment occurs in the last 20 seconds of the auction as you score a “kill” in the bargain hunting game or pump more and more dollars into it trying to win a lottery.