Guild Wars 2

What items would you incorporate into an index for the TP and how would you weight them?

I thought of using the “commerce infographic” (http://media.giantbomb.com/uploads/0/4689/2299985-commerce_infographic_en.png) to construct an index weighted by percentage of trade volume (that’s what I assume the pie chart at the bottom of the graphic to be about) and then play around with item level ranges to check whether there are some differences between item tiers.

Does indexing the TP make even sense, since we have shorter timespans to work with than a real market?

If I were to build an index, I would focus almost entirely on crafting materials and weigh them in proportion to an approximate trade volume.

Compared to a real market, you’re at a marked disadvantage, since we lack information on both real supply volumes and real trade volumes. You have to guess at each, which means any model is only a crude approximation at best.

On the flip side, you have a substantial advantage because there are essentially no capital goods, and manufacturing labor costs are valued very close to zero. Pricing goods in the real world is an enormous pain because the capital and labor costs of manufacturing and transportation through a very long supply chain represent the bulk of the cost of most real goods. In game, the cost of finished goods are essentially the same as the cost of the individual components (plus at most the 15% TP fee and some minor risk premium). So a first order approximation of just looking at raw materials should track the entire market fairly well.

So you’re going to want to look at, for starters:

- All basic crafting materials
- All fine crafting materials
- An aggregate of rare runes
- An aggregate of rare sigils
- Cores and Lodestones
- Globs of Ectoplasm
- Mystic Coins
- Unidentified Dyes

That might not cover everything, but will certainly be enough to cover the equivalent of ‘core’ prices. Assume that fine details in, say, the price of specific dyes or crafted goods are being sorted out by arbitrage traders and the aggregate prices reflect those fine details.

As for weights, we don’t know real supplies; we also don’t know real trade volume. So we have to approximate. A really crude, back of the napkin measure looks something like this:

- Real volume is proportional to the number of buy and sell orders.
- Goods are either supply constrained or demand constrained.
- Items with low bid/ask spreads sell quickly.
- Items with high bid/ask spreads tend to sit on the trading post.

Which gives a really crude, back of the napkin model of:

Volume ~~ Minimum([Number of Sale Orders],[Number of Buy Orders]) / ( ([Lowest Sell Order Price] – [Highest Buy Order Price]) / [Highest Buy Order Price] ) – 1

I’d use daily averages to estimate volumes to smooth out bumps.

…and that would be my starting point. Sanity check the volume numbers, throw it all in a blender, and see what pops out. Tune from there as needed.