Solve Auction Submission Bias with Financial Incentives — How to

Solving Submission Bias with Financial Incentives

Long time users of Craigslist bemoan that there’s so much spam on the site. Google for “craigslist submitter” and you’ll see ads for software that will automatically submit ads to Craigslist every few minutes. But there’s a simple solution to this problem: if Craigslist charged 25 cents per ad submission, the volume of spam would drop overnight but the volume of legitimate submissions would hardly change.

When I hear domain auction houses complain regarding the volume and quality of domains submitted for their auctions, I think they ought to look at a similar solution.

For example, they could charge $1 per domain submitted. But then they’ll get complaints if they don’t accept any of your domains.

Or, they could charge $10 for each domain that is accepted. People will stop submitting bad domains if they pay $10 for each and they don’t end up selling.

Bido is controlling the problem by requiring all auctions to start at $1 with no reserve, thus scaring away people who know their domains aren’t worth much. Of course this can also scare away people that are unsure of the quality of auction bidders.

I think the best solution is to charge a fee and limit submissions. For $20 you can submit up to 20 domain names. If none of them are accepted you will get your money back.

This ought to eliminate 90% of the bad submissions and a relatively modest amount of the good ones. Auctioneers would have fewer and higher quality domains to sift through and ultimately have better domains in their auctions.

People would complain, but the only ones complaining are people you don’t want to submit domains anyway.