At that point you're starting to wonder why no one has tried to build a corporation around this, and unsurprisingly, the online auction site Swoopo appears to be exactly that. More surprisingly, they seem to have gone bankrupt last year, suggesting that maybe H.L. Mencken was wrong and someone has gone broke underestimating people's intelligence.

As soon as I started reading this example, I was reminded of MadBid.Com, the evilness of which I spent some time convincing several friends and relations of. They have not, as far as I can tell, gone out of buisness; but surely game theory does not mean you should actually participate in these auctions? After all, if you don't have any better odds of winning then anyone else ... I'm genuinely unsure what game theory suggests, but I don't think it's "pay $200 and lose anyway."