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Given a reasonable estimation of what the spot pricing algorithm should be, then the fact that the price spiked to above on-demand pricing has to mean that someone actually bid above the on-demand price - enough people to justify the price rise. This would mean people are either ignorant, confused or misled. Alternatively, Amazon could be just playing around to see what happens.
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Your strategy is definitely valid, as far as I see. As for many such scenarios the strategy only works well when executed by a small minority. To illustrate: if EVERYONE adopted your idea and bid at the on-demand price, that would invariably drive the spot pricing up to equal the on-demand... and then what have we gained? Obviously it doesn't have to be everyone either, just enough to satisfy the supply. Of course, that doesn't mean I'm not going to do that, starting right... NOW. :-)
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Dec 19, 2009