Steemit Post Promotion and the Dollar Auction

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!!

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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