I'm having a hard time to understand your logic.
Site owner profit < Last player bid
The last bidder would be paying more than the prize is worth, since the money used to fund the prize is less than the amount paid by the last bidder.
Unless the guy running the campaign is willing to lose money, it's not viable.
Keeping asking questions, all, for I'm sure I'm able to come up with a unique answer.
For sake of argument, suppose the last person to purchase was planning on buying this Vette anyway. Further suppose that the dealership is offering some undisclosed discount.
Even if the last person to purchase doesn't get the above, the premium paid may be worth it for the right to be known as the guy who received the Vette via this route. The domain and hosting would be paid for five years to guarantee the maximum mileage on this particular campaign, of which would be linked via the subsequent campaigns.
What I'm trying to relay is a completely new form of advertising/marketing. No Ponzi. No pyramid. No scam. Period! To be clear, this is also not an auction, hence refraining from using the word bid.
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It only works if you are willing to sell the final object for half its worth. Or, equivalently, if the purchaser is willing to purchase the object for twice its worth.
Consider the following. In round 0, the current option is 1 BTC. When sold, the house gets 1 BTC profit.
In round 1, the option will be
a BTC, where
a is the ratio that we are using. (For example, if the price increases by %10 each time, then
a = 1.1 .) When sold, the house receives
(a - 1) / 2 profit and the option owner receives
(a - 1) / 2 profit. (In our example, the profit is
(1.1 - 1) / 2 = 0.05. That is, the house gets 5% of the profit of each sale and the option owner gets %5 of the profit of that sale.)
In round 2, the option will be
a^2 BTC and the house (and option owner) profit for this round is
((a - 1) / 2) * a.
Continuing in this fashion, we have in round
n, the option is
a^n and the profit is
((a - 1) / 2) * a^(n - 1).
The total profit for the house is the sum of the house profits for each round:
H = 1 + ((a - 1) / 2) + ((a - 1) / 2) * a + ((a - 1) / 2) * a^2 + ... + ((a - 1) / 2) * a^(n - 1) = 1 + ((a - 1) / 2) * (1 + a + a^2 + ... + a^(n - 1)) = 1 + ((a - 1) / 2) * ((a^n - 1) / (a - 1)) = 1 + (a^n - 1) / 2To summarize, the option will cost
a^n to purchase and, when it is sold the total house profit will be
1 + (a^n - 1) / 2.
If the value of the final object is V, then it does not make sense to purchase that object for more than V. That is, we would expect a person to participate in round
n if
a^n <= V.
At this point though, we have
1 + (a^n - 1) / 2 < a^n <= V. Or, roughly, the house profit is about half what is needed to actually purchase the object at that point.
I guess it is possible that people would play beyond the time when
a^n > V. (Actually, of course they would given the magnificent gem as an example.) However there is little difference between the gem and this example. The last person to hold the gem just gets ripped off and feels like an idiot. The person to get the Vette just spent twice as much as he should of to get it and feels like an idiot. *shrug*