A few weeks ago Facebook carried an advertising campaign for a business called BidPax, a so-called penny auction site. Briefly, you pay BidPax for bids to be placed on their auctions. Each bid costs about $.70. When an auction starts, bidders use their pre-purchased bids. Each bid placed increases the price of the item being sold by one cent and adds 10 seconds to the duration of the auction.

Obviously, anyone who wins such an auction appears to get the item at a huge discount — provided they are prepared to forget that each one cent bid cost $.72. However, even allowing for this, the history of auctions on BidPax suggests that the winning bidder is indeed saving huge sums when compared with the recommended retail price of the items won.