I missed this when Gevlon first proposed it, but he proposed a variant on the standard Gold DKP loot system.
For those people unaware of GDKP, it's a loot system where raid members bid gold for items. Items are auctioned off in a standard multiple-round, public bidding process. The gold all goes into a pot and the pot is split equally among all the raid members at the end of the run. It's good system for pickup groups because it provides an easy way to compensate people who don't win items. If you don't get any items, you at least get several hundred or several thousand gold. This encourages geared and experienced players to join the PuG, giving it higher chance of success.
Gevlon proposes a rule giving 1/3rd of the winning bid to the second place bidder, in order to encourage higher bid prices and discourage "fake" bids.
I'm not really sure that this rule actually accomplishes anything useful.
Look at it from the point of view of the optimal bidding strategy. In a normal English auction, the optimal bidding strategy is to bid (up to) what you think the item is worth. In a normal GDKP auction, the optimal strategy is to bid you think the item is worth plus a little premium, because you get back a portion of your bid when the pot is divided up at the end of the raid.
Under the Goblin variant, the optimal bid is to bid 150% of the items worth (plus a little bit for the pot-split). To see this, let us ignore the pot-split for now, and imagine that there are two items that a player values at 1000g. The player bids 1500 for both and wins one and loses one (for 1500.01).
For the winning bid, the player nets 1000g (item) - 1500g (bid) = -500g.
For the losing bid, the player nets 500g for being the second place bid.
So when the two bids are taken together, it's a wash. The extra money you get from being second is cancelled out by the extra money you have to pay to win items.
Also, note that the size of the pot doesn't increase. There were two bids of 1500g, whereas under the regular rules there would be two bids of 1000g. But the pot is 2000g in both cases.
So as far as I can see, the only person who benefits from this rule is someone who is very skilled at bidding just enough to get second place. For example, consider a spoiler who only joins in bidding when there are two other people bidding. With three people bidding, the price gets pushed up and up. When one of the original two bidders drops out, the spoiler immediately drops out right after, guaranteeing that she has second place. It is very unlikely that two legitimate bidders will drop out at the exact same price point. There will be a small difference between their maximum amount which they are willing to pay, which the canny spoiler bidder can exploit.
Far from discouraging strategic bidding, I think this system actually creates a legitimate opening for someone who is bidding to push prices up. People who win items do not benefit. Higher end players carrying the group to earn some extra gold and maybe hoping a rare trinket drops do not benefit.
This rule just adds extra complexity for no good reason. It encourages people to bid using a non-optimal manner, just because they want the extra gold from being in second place.
Regular GDKP is a good system. It is close enough to English auctions that everyone understands it, and close enough that the strategy of bidding what you think the item is worth is very close to optimal. It's been my experience that when bidding systems stray from this optimum, they are more fragile, because people don't really understand how to bid well.
Gevlon's rule of "1/3rd to the second bidder" is not an improvement on GDKP, and should be avoided, in my opinion. It will still work, but it is more complicated, has a less intuitive optimal bidding strategy, encourages strategic bidding and does not actually add any positive effects that I can see.