The Steem blockchain was upgraded earlier today. You may experience trouble posting and transacting while the new bandwidth system stabilizes. Read more here.

Steemit Post Promotion and the Dollar Auction

in steemit •  2 years ago

With the new Post Promotion option announced yesterday and active now, we are enjoying a section 'curated' by the amount of SBD paid to promote a certain post. The higher the amounts paid, the higher the post is listed on that page.


It's new, it's hype atm and used by many users, even by me, and I believe it opens new gates for Steemit's growth through more user engagement (we can spend SBD directly on Steemit now) and new investor interest (advertisement is always a profitable thing to have). Note that the funds paid for promotion will be used to reduce the debt load on Steem. Also, Steemit Inc is not guaranteeing your post will get hyped up if you pay to promote it, which makes total sense.

When you look at a promoted post, clicking on the dropdown detailing the reward amounts now also lists the Boost Payments which is the total amount paid by one or multiple people to promote the post.
For more details check out the official announcement post by @steemitblog, other articles around and if still in doubt use steemit.chat to ask in the appropriate channels general, help or steemitwebsite.

!WARNING: Do not promote posts that already had their first payout. This is a bug and a github entry has been submitted. Thanks @jesta for pointing it out. You're really witness worthy material man!!


Enough with the introduction.

Looking at the new Promoted queue of posts and curios on the amounts paid by people to get their posts acknowledged by as many as possible I see some interesting numbers.

  • The highest amount I have seen paid for promotion so far is 100SBD by @jesta on the above post
  • There are obviously 3-4 other main humps in terms of promotion amounts: 75SBD, 50SBD, 25SBD and 10SBD

Now, most of the people might try a slick way and promote their posts with 10.001 SBD and get listed before the ones that have 10SBD. Since you can add SBD multiple times, some can game the 'system' and add 0.001SBD to be listed front of a section that used a fixed amount all togheter.
Such a game reminded me of the Dollar Auction idea which is a very interesting concept. Obviously not all the principles apply to the Steemit Post Promotion process but it's a fun way of looking at the game with these posts.
Here's what the Dollar Auction says (ripped off of Wikipedia for everyone's convenience):

Dollar auction

The dollar auction is a non-zero sum sequential game designed by economist Martin Shubik to illustrate a paradox brought about by traditional rational choice theory in which players with perfect information in the game are compelled to make an ultimately irrational decision based completely on a sequence of apparently rational choices made throughout the game.

Play

The setup involves an auctioneer who volunteers to auction off a dollar bill with the following rule: the bill goes to the winner; however, the second-highest bidder also loses the amount that they bid. The winner can get a dollar for a mere five cents, but only if no one else enters into the bidding war. The second-highest bidder is the biggest loser by paying the top amount he or she bid without getting anything back. The game begins with one of the players bidding five cents (the minimum), hoping to make a ninety-five-cent profit. He can be outbid by another player bidding ten cents, as a ninety-cent profit is still desirable. Similarly, another bidder may bid fifteen cents, making an eighty-five-cent profit. Meanwhile, the second bidder may attempt to convert his loss of ten cents into a gain of eighty cents by bidding twenty cents, and so on. Every player has a choice of either paying for nothing or bidding five cents more on the dollar. Any bid beyond the value of a dollar is a loss for all bidders alike. A series of rational bids will reach and ultimately surpass one dollar as the bidders seek to minimize their losses. If the first bidder bids ninety five cents, and the second bidder bids one dollar (for no net gain or loss), the first bidder stands to lose ninety five cents unless he bids $1.05, in which case he rationally bids more than the value of the item for sale (the dollar) in order to reduce his losses to only five cents. Bidding continues with the second highest bidder always losing more than the highest bidder and therefore always trying to become the high bidder. Only the auctioneer gets to profit in the end.

Analysis

The seemingly rational decisions during the game are in fact clearly irrational once one realizes that they are nothing more than a greedy algorithm, which is of course not guaranteed to give a globally optimal solution. In this case there is actually a globally optimal solution, which is to not play the game at all unless one is certain that there are no other players.

And I say to you all: #gameon

Authors get paid when people like you upvote their post.
If you enjoyed what you read here, create your account today and start earning FREE STEEM!
Sort Order:  

Great post! I love the example of the money auction as I had forgotten about that little game theory gem. So far, I'm loving the promoted posts idea. To test it out, I dropped 15 SBD on a post which was set to pay out at $33. 20 minutes later a whale bumped it to $70 with 8 hours of new life. I just found out Bernie found it to bring it over $300 and 11 more hours of life. That's pretty sweet!

After reading your post I want to build some transfer analysis tools on @null's wallet to figure out the optimum payment amount at any given time. It also makes me want to send 0.001 SBD to push my post ahead of any other 15 SBD post. :)

Again, great post. I may not have seen it without you promoting it.

Oh, also, @smooth contributed 50 SBD to promote @jesta's PSA. Two class acts right there.

·

Luke, how does the "new" (or rather extended") life (payout time) work? Can you clarify? I've not heard of this feature before. Is this something just added as part of the post promotion update, or has it always existed. If the former, does it only apply to promoted posts or all posts?

·
·

It's been around for a long time, as far as I know. I haven't looked at the actual code to understand exactly how it works, but my understanding goes something like this: The default is 24 hours. That changes based on the stake of new voters. Example:

If a whale radically changes the value of a post by upvoting it at the last moment, other whales would not otherwise have time to flag it to change the payout. Also, that whale wouldn't have much time to change their vote if they later discover plagiarism, fraud, etc. The way they get around this is extend the time left on the post based on the weight (Steem Power) of the new voters. I've seen some posts stay active for quite a long time as new whales come in and vote it up. If you take a look at my post, it says "2 days ago" but still has 6 hours left on it. It almost paid out at $33, but is now at around $333. That's a big change.

·
·
·

Good to know! I learn something new about Steemit every day.

·

Luke, the man with the numbers :) I love the idea. Interesting stats to look at:

  • Highest promoted amount per post
  • Highest number of promoters per post
  • Highest non-author promoted amount

There may be others who have already though to do 15.001. I too started with 10.001 in mind and got to 13.63 to have a good front-ish seat :) but I think amounts will start being higher and higher as pressure builds to be on the first page.

@berniesanders is the real MVP, have said it before and it's still valid. Nice ROI on your post! Classic bump and reward case. Exactly what Post Promotion has been built for.
I'm more testing the thing now but thank you for the feedback! It's good to see that my marketing campaign is showing results!

Yeah, up one for @smooth and @jesta! #classy

Just gave your post a shoutout in my first analysis of the promoted posts!

·

Wow, thank you so much!!
just a minor detail, my username doesn't have any numers at the end :)))

·
·

Oh shoot! It brought in your rep score when I copy/pasted. I'll fix it right now. Thanks!

·
·
·

Don't worry about it. Thanks for fixing it and especially the mention!