Richard Thaler, a behavioural economist who also has a New York Times column, looked at 26 occasions on which Swoopo had simply auctioned $1,000 cheques. The average revenue was $2,452. No wonder the pitchforks are out.
The article also notes that Brigham Young professors argue irrational or risk-loving individuals focus on consoles, and that Swoopo gets a 50% increase in price from a comparable amazon good.
All these explanations seem to forgo Occam's Razor: Swoopo is intensely fun to watch (and, without a stretch of the imagination, to play in). It is packaged entertainment and bidding. The clock ticks down, and one grows closer to almost getting a prize. Even losing money on Swoopo makes sense, as the bidding site can be nerve-wrackingly intense. The explanations of "sunk cost fallacy" and "irrational consumers" or "risk-loving individuals" seem to "jump the gun" in the mind of Corrections--it seems pretty straightforward.