[1] Empirical evidence suggests that revenues from these auctions exceeds theoretical predictions for rational agents.
A 2010 TechCrunch article about penny auction site MadBid called this business model "a license to print money.
"[3] Eighteen months later, a reporter for The Guardian wrote, "legions of penny auction sites have folded, including Swoopo, Rapid Bargain and Bid Boogie."
"[4] Due to the possibility of participants spending significant amounts of money and still losing an auction, or ultimately spending more than the retail value of the item they end up winning, some analysts have criticized the model or compared it to gambling, even when operating without fraud.
[5][6][7][8][9] The Better Business Bureau warns consumers, "although not all penny auction sites are scams, some are being investigated as online gambling.