Guild Wars 2

There are two things to look at when thinking about this: the trading post tax and price of goods.

The Tax, or Fighting Inflation
If you buy 10,000 of an item for 47 copper then you have invested a total of 47 gold. Later that day you sell the items for 75 copper, giving you a total of 75 gold. However 11.25 gold is permanently removed from the economy due to the trading post tax, leaving you with 63.75 gold or a total profit of 16.75 gold. If you do this on a daily basis for a week then 78.75 gold has been removed from the economy in just 1 week, how many repairs or way points would it take to fund that much raw destruction of gold?

Why is the prevention of inflation important? Because while you may have been playing since launch, new players that start will have to fight their way up a mountain of gold if inflation is not kept in check. Long term health of the game suffers in a scenario where gold inflation is rampant.

Keeping Prices Down
Continuing the above example of purchasing 10,000 of a single item, imagine two markets: One market has a trader actively participating, the other has no traders participating, both markets have the same volume.

In Market A the power trader is buying 10,000 Gizmos for 47 copper, the trader then re lists them at 75 copper. The end result is that the ceiling price of Gizmos are 75 copper, and there are 10,000 of these for sale to hold that upper limit, which really means that due to undercutting the price of Gizmos will fluctuate between about 65 copper and 75 copper for quite a while.

In Market B there is no power trader active, so 10,000 Widgets are purchased by 200 players for 47 copper. These widgets are destroyed due to consumption, crafting or whatever. Later that night players start buying form Sell orders, but with no trader active those 10,000 Widgets were destroyed, so that price of 75 copper continuously climbs as widgets are sold, where it stops nobody knows

In game example: Look at Scales. I started trading in the scale market about 2 weeks ago. When I started the price of scales was at 80 copper. I continuously brought the price down until it hit a point of 68 copper. Once I had the price stable at 68 copper another trader jumped in at placed a sell wall of about 20,000 scales at 67 copper. Once that sell wall was posted, the price of scales tanked. The end result? Scales are at 52 copper at the moment I believe. No traders: 75 to 80 copper. Traders: 52 copper

Notes
Market manipulation is something entirely different and I’m not covering that here, as it does harm the economy. I’m merely attempting to point out why trading is actually good for economy, and good for the long term health of the game.

I agree with many of the things you’ve said in your post. I, too, believe trading is good for the economy.

I see SO many complaints about the Trading Post, but I think the reason people are complaining is because they’re looking inward at how different things affect them. They’re not looking outward at how the Trading Post has actually HELPED the Guild Wars community. I wish people would stop being so selfish and only thinking about how things affect THEM.

Look at the bigger picture. Guild Wars 2 was NOT created for YOU. It was created for all of us.

So many thing have been made easier with the implementation of the Trading Post. I know it’s not finished. I look forward to the minor tweaks ArenaNet adds into it later one. I see it becoming an amazingly fluid tool for buying and selling.

Good post, Syntax, but I think the scenario you gave in the second example for Market B is not quite accurate. Assuming we’re talking about materials or some other highly traded commodity, it’s highly unlikely that no other seller posts new gizmos for sale, which means it’s just about impossible to completely buy out stock of an item without posting buy walls (which falls under market manipulation which I agree with you is unhealthy for a market).

The other half of the equation is that while price bubbles do form, they always collapse in the end because there is a point beyond which players simply will not pay the listed price. When this point is reached, no gizmos sell, and eventually somebody will list their stock for less, and then somebody will undercut that person etc. until eventually the price stabilises again, probably at or near the original 47 copper price, or a bit higher depending on available supply.

Of course, don’t forget that ANet could also step in at any time and adjust item drop rates if they deem prices for a particular item to be unreasonable. (They did exactly that with Vanilla Beans. I expect the only reason they have not done so with Charged Lodestones or other rare mats is because they simply don’t want to have too many people running around with Legendaries or super-expensive Exotics.)

Syntax
Good post

But your calculate is not correct
You spent 47g to buy was already caused 7g disappeared from the game
So the whole trading after that is 7g + 11g = 18g was destructed

I’m doing that everyday too

If in market A the thingies are 47 coppers for the trader, I fail to see why in market B you’d get them for less. Unless the consumption is higher due to lower prices, but, with As higher prices the consuption would be lower, so you’re actually depriving people of the gizmos (due to your profit and reselling tax) and ofc the stock remains (ya know, the supply and demand graph – draw it, and then adjust it for the reselling tax and ur profit then think on it why it will fluctuate – or should without outside intervention with intent to change prices).

If market was left alone (which atm pretty much isn’t coz of so many traders/flippers so it’s kitten hard to estimate the real amount of anything just based on the TP when ppl have boatloads of everything stashed away) it would reach equillibrium alone….if prices were high, ppl would farm. If prices were low, ppl wouldn’t farm and prices would rise. Btw, ppl started manipulation of prices in 2nd week after start (that I saw) so whatever prices are now, they’re not freely established for plenty of things, there’s also the cascade from ppl that manipulated, earned a lot, bought idk what 2.000 rares to throw in to forge…or 250 charged lodestones each to make legendaries and what not thus raising prices and making them more unaffordable. Not to mention, standing in LA for hours per day would mean a LOT of materials if doing pretty much anything else thus increasing supply on the market and actually help lowering the prices.

As for the lower money supply and blabla…no, common person has less, trader has more, and some gets eaten by system. All it does is transfer wealth on expense of the final buyer. If it was a state tax it would be a tad different, since that cycles back in to the system albeit inefficiently. Simple check: how does trader make money (assuming 100% just playing TP)…by trading, who then pays for his wealth (assuming successful trader)…yeh, the final buyer…no buts and ifs about it.

Ty for being such a samaritan, but just be honest, you’re doing it for your own gain, don’t disguise it as some act of charity.

Oh and lol at the person, we play as we want hurr. Yeah, manipulation of TP affects everyone that uses it…so it’s not that you play how you want, it’s that it affects other ppl (economic griefing? ). If that was valid excuse there would be no such thing as banning/warning ppl for griefing other ppl…hey, I play as I want, too bad it affects that dude if I call his mom my (insert profanity that offends the dude deeply) or loltroll my team in sPvP, or waste supply/siege cap in WvW or whatnot…

Meh, why do I even bother.

Coldness.9628:

Syntax
Good post

But your calculate is not correct
You spent 47g to buy was already caused 7g disappeared from the game
So the whole trading after that is 7g + 11g = 18g was destructed

I’m doing that everyday too

Good point, I wasn’t considering the tax paid by the seller in the argument, I was only considering from the point of view of the trader.

Novalight.7568:

Ty for being such a samaritan, but just be honest, you’re doing it for your own gain, don’t disguise it as some act of charity.

I never denied that Traders aren’t gaining anything out of it. Traders gain wealth by trading. But the process of that wealth gain is healthy for overall economic stability.

I find the example offered completely unconvincing. Ignoring the issues of supply and demand elasticity which the OP also ignored, I’d counter with the following:

In Market A the power trader is buying 10,000 Gizmos for 47 copper, the trader then re lists them at 75 copper. The end result is that the ceiling price of Gizmos are 75 copper, and there are 10,000 of these for sale to hold that upper limit, which really means that due to undercutting the price of Gizmos will fluctuate between about 65 copper and 75 copper for quite a while.

What happened was that the power trader exhausted the supply of production cost priced gizmos (if he can safely relist them at 75 without immdiately being undercut). Everyone who needs gizmos is now forced to buy at a price higher than the one demanded by the player who actually procured the gizmos. If the supply hadn’t been bought up, the undercutting would start at 47c, not at 75c, so you’d have fluctuations of 37c to 47c. A much lower price to the people who actually use the gizmos.

In Market B there is no power trader active, so 10,000 Widgets are purchased by 200 players for 47 copper. These widgets are destroyed due to consumption, crafting or whatever. Later that night players start buying form Sell orders, but with no trader active those 10,000 Widgets were destroyed, so that price of 75 copper continuously climbs as widgets are sold, where it stops nobody knows

The trader forgets that for everyone except the trader, the whole point of the TP is that the items sold get used up. The whole purpose of the whole economy is for those 200 people who want widgets to use them to actually get them.

The proper comparison of market A and B goes: in market A, people who can produce gizmos at 47c equivalent of effort get a total of 470000c, the people who actually use gizmos can’t buy them at production costs, but are forced to buy at 75c, and the trader, for his grand contribution of… having had the starting funds of 470000c to buy the gizmos with now can look forward to having at least 650000c total after all are sold.

In market A), you have all the suppliers happy enough (they were willing to sell at 45c), and 200 unhappy buyers, who have to spend 900c more than they would have had to without the trader’s interference and the trader richer by 180000c.

In market, you have all the suppliers exactly as happy as before, 200 happy gizmo users who got what they wanted at a favorable price.

In other words, 200 unhappy and 1 VERY happy as opposed to 200 happy.

Want an extra kicker? Market A) is long term less stable. Market B is slowly climbing toward the actual equilibrium price while Market A is facing a sharp market crash as soon as the power trader takes his money away and no longer pays 75c for them.