[Dazarath]

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If someone can show me how RB makes good business sense over not allowing RB, I'll give you $100.

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Take an intro economics class and then you'll understand why rakeback makes sense as a business model (from the affiliates perspective).

Let's say person A is an affiliate. All he does is run a website to draw customers. People will sign up throught the site if they discover it before they discover the actual PP site.

Now, person B comes in. He offers free poker chip sets as an incentive to beat person A. He starts to take away some of the customers of person A.

Person C comes up with the following idea: hey, I get 25%, why not give 5% back?

Now person A responds with 10% rakeback and person B is left in the dust. Basically, the affiliates will keep under-cutting as long as they're making more money than what's "worth it" to them. Like, if person X's offer of 20% rakeback leaves him earning $1000 a month, and he feels that $1000 is a good price for the amount of time he invests into affiliating, but giving 21% would lower his profit to $800, which is not worth it, then he'll offer 20%. Basically, the affiliates wouldn't offer rates that are high enough to make the profit not worth the time. So somewhere between 0 and Y% (Y being the amount of MGR the affiliate receives), there are values that don't cut into the profit too much, but also make the customers happy.

Saying non-rakeback > rakeback just because the profit (in percentage) is higher, is like saying grocery stores should sell apples at $500 a piece, because who wants to sell apples at $0.50 when you could price them at $500?