Guild Wars 2

The price of Vanilla Beans is going up steadily every single day, yet the supply for the commodity is always plentiful (1000+). For the people who are knowledgeable of the current market dynamics, can you shed some idea as to what’s going on?

Are vanilla beans’ drop rate too low? Is this an exception to the supply and demand rule? What’s fueling the steady rise of the price even when it looks like the market is saturated with them?

The price of a good could be continuously increasing, even with adequate supply, without violating the Laws of Supply and Demand. People could be demanding more Vanilla beans every day and the people producing them (by farming?) are simply responding to their demand by producing more of them.

You could be observing inflation, as the total amount of currency in a economy increases the prices of all goods increase.

If Vanilla Beans are a Giffen good (as the price of a good increases people buy more of it), this would violate the simple Law of Supply and Demand, but is not theoretically impossible. Giffen goods are very uncommon (even non-existent in the real world), usually for such things as staple food and for people with very low income. IE if the price of bread rises so much that you can no longer afford meat, you will likely buy more bread to maintain you caloric intake.

If the drop rate was increased, supply would increase, moving the price down. All else held equal.

To answer your final question. Increasing demand or inflation.

That help?

Obie:

Here’s a rather simple “analysis” you can perform. Go look at 8 slot jute bags or 10 slot wool bags. They should still have an ~20c gap between the highest buy order and the lowest sell order. They have consistently since the TP opened.

Since this has happened consistently for weeks, I am making a [potentially flawed but probable] assumption that if the lowest sell order went up [more people are buying than the current price], then the highest buy order will go up to stay at approximately 20c lower.

Why? For whatever reason the supply and demand curves for those two particular items are in a flux that isn’t being whipsawed by other things going on in the market. They follow each other in a tightly controlled pattern, quite possibly because there is high demand and supply.

It could also be inflation as Siyeh has noted.

If you want to have a more concise approach to what is in “saturation”, look at the sell orders.

You will notice that the supply skyrockets exponentially like this:

20c 14,000,000
21c 7,000,000
22c 4,000,000
23c 2,000,000
24c 1,900,000

ETC

In other words, as the price drops the supply actually INCREASES. This happened with Soft Wood Logs. There were OVER 2 MILLION of them at 2c. John Smith and his buddies saw that and decided to get rid of the excess supply, among other things, by using them in mystic forge recipes.

It took less than 3 hours to clear through that supply of Soft Wood Logs once the firestorm broke – I know because I watched it happen. Rather fascinating, actually. The price spiked to 11c and last time I checked was at 8 or 9c.

If the price keeps gonig down and each iteration down in price the supply keeps increasing there is a excess of supply. People will just keep posting and undercutting but hopefully the ANet team will see that before it happens and quietly [or loudly, whatever] adjust drop rates to reduce the supply.

You two beat me to it.

I’m reading this several times over, it’s a lot for a novice like me to understand right off the bat but I definitely appreciate both of your efforts to explain this to me.

Thank you two very much for the insight!