BookMooch? . . .

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There’s a new website and concept out there called BookMooch.

The idea behind it is:

  • You list the books you own that you don’t want any more, as do others. You also list the books you want, as do others.
  • When someone wants one of your books, you mail the book out (and pay shipping). When you want someone else’s book, they mail it to you.
  • Books are generally valued at one point each, regardless of current value. You give a book, you get a point. You get a point, it costs you a point.
  • You get an extra point if you send a book that was on somebody’s wish list (though it doesn’t cost the recipient any extra points).
  • You also get a fractional point for listing books, and acknowledging receipt of books.

    Why This Is A Pyramid System

    There’s nothing illegal about doing this, but BookMooch has a much bigger problem than that.

    As it stands now, this system not only will not work in the long term; it cannot work, and I’ll explain why.

    BookMooch’s point system is fatally flawed. A system such as this can only sustain itself permanently if it’s a zero-sum game. If I give out X and get back the same, I should end up with no more or no less points than when I started the whole transaction, simply because there are no more goods available after the swap.

    BookMooch’s system generates more points than there are books, a lot more. This is the equivalent of printing more money than there are goods and services in an economy. Eventually, either you get inflation (the points lose value) and/or you end up with valueless “currency” because there is nothing worth buying with it.

    Let me give a couple examples to illustrate:

    Let’s assume I am the most honest person in the world, and I list fifty books. Let’s assume everyone else is honest as the day is long and picks all my fifty books. Assume I pick fifty books, too.

    Such a system has to be a zero-sum game to keep the system stable. After my transactions, I should have zero points left: I gave away fifty books, I got fifty books.

    It doesn’t work that with BookMooch. By listing my fifty books, I get 5 points. For giving away fifty books, I get fifty points. Getting fifty books costs me fifty points, but acknowledging their receipt earns me five points.

    Swapping fifty books ought to leave me with zero points, but under the BookMooch system, I’m left with ten points.

    And that’s the best case scenario, because there’s even a bigger inflator in the system.

    If you provide a book on someone’s wish list, you get two points, but it costs the recipient only one. Let’s assume my honest man with his fifty books again, but this time he provides books that are on other people’s wish lists, and takes all the books he gets are from his wishlist.

    The math is as follows: 5 points for listing them; plus 100 points for sending out wish list books; minus 50 points for getting wish list books plus 5 points for acknowledging receipt.

    If that happens, I don’t have ten extra points after the swap, I have sixty.

    Under the current BookMatch system, my fifty books magically turns into sixty at a minimum, and up to a hundred and ten. Unfortunately, it doesn’t just as magically manufacture additional books for the system. That can only come from others joining the system later on.

    This system automatically generates more points than books, no matter what. Like any other pyramid system, the effects can be hidden so long as more and more people join in with their books and effectively pay off those with extra points. Eventually, though, growth slows, and there are far more points than books in the system, which means either devaluation of the points, or points with no books to buy.

    It would be like going to the bank, and for every fifty dollars you gave them, they gave you back sixty or even a hundred and ten. That would be a very popular bank, indeed, but when everyone starts doing the deal and there’s twice as much money, but no increase in goods, you end up with either money you can’t spend, or books start costing twice as much.

    And this assumes everyone is more honest than God!

    What happens when they aren’t?

    We Don’t Need No Stinkin’ Books!

    Let’s assume Joe Citarella and I want to get ourselves some free books from the other saps participants. It’s the easiest thing in the world.

    Joe lists fifty books, and puts fifty books on his wish list. I do the same. Amazingly, our lists completely coincide. We “send” fifty books to each other, acknowledge their receipt, the both of us now have sixty points each, and we start cashing in.

    Truth be told, neither of us sent books to each other, probably because neither of us ever owned any of them. That certainly will cut down on the postage fees! But how is BookMooch going to know that? So long as Joe and I swear we got the books, and we don’t get too greedy or obvious about it, how is BookMooch supposed to pick that up without at least quite a bit of effort?

    For that matter, what do I need Joe for? If I’m creating books out of thin air, I can create recipients, too, and just pass around phantom books to a phantom circle of people until I can open up a used book store. Again, unless I’m greedy, obvious and/or stupid, it’s unlikely I’ll get caught.

    If a system cannot work with completely honest people, how is it going to work when some aren’t?

    Feeling Ripped (Off)

    I know, this is like pushing someone off a skyscraper roof, then shooting him on the way down, but there are other problems with this system.

    The other major problem is that there is no differentiation on value for the book. People who recently paid top dollar for a new book will rationally not be too happy if they ship out relatively expensive books, and not find equivalent books available in return.

    Even worse, a lot more people are a lot more likely to become irrationally unhappy about book swaps. For instance, you may have paid $34.99 for the The AnandTech Guide to PC Gaming Hardware four years ago, but computing books often depreciate even faster than computer hardware. Even non-computing bestsellers can be worth practically nothing a year or two after publication.

    Whether rationally, or irrationally, people will likely load their “take me” lists with the books they value least, while loading up their “give me” lists with what they value most, and while beauty is in the eye of the beholder, this is likely to be a cyber yardsale.

    It’s simple economics, Gresham’s Law. When you don’t value the good any more than the bad, the good stuff vanishes, and all you get is the bad stuff.

    This will happen here, too.

    Conclusion?

    I don’t think this is a flat-out scam, but it sure hasn’t been thought through at all.

    Stay far away, at least until they fix that fatally flawed point system, anyway.

    Ed


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