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According to the Greater Fool Theory, the price of an asset is not determined by its intrinsic value, which in the case of stocks or real estate would be their ability to generate cash flow, but the expectation of its speculative value rising. In other words, that an even greater fool would show up and buy the asset at a higher price in order to sell it to an even greater fool.

What does this have to do with the curation reward system on Steem? Well, look at it from the point of view of a purely selfish maximizer. It pays to upvote a post among the first ones because that way one's share of the curation rewards will be larger at the expense of the later upvoters. But why would any purely selfish maximizer upvote anything later than among the first ones since that would be an unnecessarily wasteful way to use one's voting power? The Greater Fool theory provides an answer. If you are a purely selfish maximizer and you find an attractive new post that hasn't got too many votes on it yet, give a big upvote and resteem it. That way, you'll put more eyes on the post and chances are that it will be seen by other greedy maximizers who want to sell it to even greedier maximizers as an opportunity to be the earlier upvoter of a success story of a post.

Every post of our own or a post made by someone else that we resteem is an opportunity to benefit from by curating it that we are trying to sell to (other) curators. That is the theoretical foundation of why decentralized stake-based curation can work. You don't like the Greater Fool Theory? Games of the Greater Fool are very common in the economy. Every single bubble that has ever existed is a game of the Greater Fool.  Crypto detractors say the entire space is nothing but a game of Greater Fool. (It is that to a large degree but that's not the whole truth about it, not even by a long shot, but that's a topic for another post.) Stake-based decentralized content discovery and rewarding work not only because it's a game of the Greater Fool but because curators are altruistic to varying degrees. We upvote what we like because we want to reward the author. However, the altruism of curators cannot be relied upon to make the system work. #oldsteem proved that to us. But it can make a system better geared towards selfish maximizers work more efficiently.