Guild Wars 2

CdrRogdan.8907:

For that matter you claim that goods are based on supply and demand. Really? Are onions really worth 9 copper based on supply and demand, or are they worth 9 copper because 200,000 people have bids up for them and sell them for 12 and 13, turning capital into incredibly easy money. Chances are there will not be any market adjustments up or down in this regard because people are inherently greedy. Why fix something to some arbritrary ‘supply and demand’ value when you’ve already got a trade that earns you buttloads of money.

Undercutting by 1 copper is an issue because it creates an excessive risk for factors that have nothing to do with your pricing. Though I already proposed a range system that automatically adjusts to account for people undercutting you, that will illiminate this problem.

I don’t even know how to respond. You have lots of vocabulary but it is used very badly. Please explain your compound interest statement.

If somebody is undercutting your price, perhaps you priced it badly in the first place?

And yes the price of onions is at 9 because of supply and demand. If there is a gap between buy and sell orders it is because people value their time, or because they value money now, more than in the future.

If you’re trying to talk about “large” players in the market (those who affect the price when they buy/sell large quantities), that is a legitimate concern. However price ceilings and floors will not solve the problem. They will create new ones. May I direct you to the US Agricultural programs.

As for the gem store, to call something a price ceiling or floor when it is based on mutually agreed exchanges is simply wrong.

@Siyeh.2407
I personally don’t think equilibrium will ever be reached given that the supply and demand is not static. I see it more as a theoretical nirvana, a center of gravity if you would where price would converge and fluctuate around.

If taste and preference change, the economy will just behave in a different way…much like the change in fashion and taste. Now, getting a little into technicalities here…if preferences change in that it can no longer be described by a convex curve, then the foundation of economic breaks down.

I think CdrRogdan.8907 is getting a lot of stuff mixed up and and confused about the relationship of what affects what….a common problem when trying to analyses an economy. Also, I think you have some serious misinterpretation on some economic terms or misunderstood the way it works…like price ceiling/floor.

When I look at it, I take a neutral stance. I don’t see right and wrong…only what affects what.

Looking at the buy order…that’s an indication of how much demand is on a certain goods at a certain price. It doesn’t matter what’s the motivation of the buyer. Sell order indicates the supply of a goods at a certain price. Those who doesn’t want to wait for whatever reason will choose to fulfill these orders, while those who don’t mind waiting will post an order. Thus by having both buy/sell order, we have the flexibility of either trading now or later for more or less profit/cost. There will be more transactions (more trades) in the market, which equates to more in-game resources getting to the hands of those who needs it, raising the general utility (best wiki utility, I don’t see how I can leave out this technical term) of the players.

This, off course, could be exploited…by 1 super wealthy player. But, it is offset by the transaction cost of TP, and also by the global market. So the question is will the player’s utility be higher by removing buy orders to kill the exploiters? Also, we need to ask is there any evidence that a super wealthy player is able to actually manipulate AND profit from the market? Keep in mind that being able to manipulate the market does not automatically means he can profit from it (dynamic price). Off course none of us will be able to provide this evidence…but the dev will have sufficient data to pin point these people and take action accordingly, probably outside the game world if they are gold seller (dev are gods).

Many of the suggestions made in this forum assumes price remain static after their proposed changes…same here with big players moving and profiting from the market. The biggest determinant to that is the 2 million participants in the market.

Wazabi.1439:

@Siyeh.2407
I personally don’t think equilibrium will ever be reached given that the supply and demand is not static. I see it more as a theoretical nirvana, a center of gravity if you would where price would converge and fluctuate around.

Very true, but we will get closer to that nirvana as the game gets older. Assuming nothing else changes, ie no new crafting recipes, no new legendary and drop rates don’t change. Now is probably the worst time to mess with the system, before we have a good idea of where it will settle.

CdrRogdan.8907:

The economic model of a video game is nothing like the economy of the real world. There are unlimited resources, no consequences for failure (starvation, lack of housing, etc), and everything is equal in terms of time to acquire, quality and service.

There are not unlimited resources. All resources are limited by time.

cdrrogdan doesn’t seem to know anything about anything. Reading through his post, I feel like he really just doesn’t understand his own points. He doesn’t not follow through with his examples. I don’t feel like going through all of them but here is something.

Simple example of the onion price, if a lot people are selling and buying at 9c and 13c, anyone else who need an onion will pay 10c for it and anyone who doesn’t can sell it for between 9c and 13c. If people don’t buy for those prices, the items don’t move and the traders don’t make money. The buy and sell price for trading eventually collapse to non profit if there is enough people legitimately buying and selling at prices in between. Now, how does this seem bad? I have no idea. The equilibrium set by this will be because of supply/demand simply because nobody can buy items and keep them and not sell them or sell items they don’t have. If there is too much demand, people will all pay 10c for onion and the traders can’t buy anything, if there is too much supply, onions will be sold by non traders for 12c and a trader can’t sell their items. Its this simple. The only thing such a system does is provide a buffer for instant price shifts since there is always a zone where you can buy and sell instantly to satisfy a small influx of supply or demand.

Resources in real life can be viewed as unlimited to any individual just as they can be in the game, I don’t see how this have to do with anything. The consequence of failure in a game is not looking good and not being able to do all the things people do. Its is comparable to real life because most money spent in real life is no needed to keep people alive, people spend most of their money on luxuries in real life. To keep a person alive in real life doesn’t require money either, all the fabrication of money and items in life are cause by people needing to improve their lives. People want to work for money and spend it in game as they do in real life. Simple wants to be better than other, to do more than they did before or just to have More. Just as people in real life moved on from living in caves, people in games don’t want to stay a noob forever, they spend time and money to make things better, in real life or in game. The economy is there to be used or not in both cases. The united collection of resources for supply and an endless source of demand makes the trading post, use it if you want, don’t use it if you don’t.

If you belief game economy doesn’t matter, just stay out of the trading post and don’t bother selling your items to anyone other than the NPCs because why would you possibly care otherwise? Now I don’t even know why I’m on this rant but sometimes people just seem so kitten that it makes you think they need a kitten. I am way to lazy to proof read so w/e.

Time is not a true limiting factor on resources, as you will never actually run out. And as new players can enter the market they provide a greater quantity of those same resources, something that wouldn’t be possible if those resources were limited.

So to explain how the market is being manipulated rather than the actual value based on supply and demand, lets look at our onion example. We have a metric ton of orders out at a given rate of 9 copper and another metric ton of sell orders at 13. A single person (unless they have an excessive ammount of wealth) would not change anything by selling at 12, but the minute that someone sells at less than that, those same people with buy orders, purchase and resell at 13, both turning a profit and preserving the current market value. The only way these values change is if this group of people manipulating the market decides to make such a change and while this is plausible the actual value has little to do with supply and demand.

It’s interesting that you are against a ceiling or floor, when there is one already in place set by the players. Perhaps using the term floor and ceiling is misleading though. I’m merely indicating that a range of value should be put in place. This does not mean that this range would be immutable, it could be soft and adjust slower after reaching a certain value. It is functional without a ceiling or floor, the notion was to prevent items from selling below vendor or acquire costs, and to prevent long vacant lists from becoming astronomical in value.

As another point, the agricultural program problems are related to subsidies that are provided to farmers to cover expenses for unforseen occurances, some of which would have a lesser effect on not as profitable items, that encourage these expenses because they are not incurred by the farmer. It shouldn’t need to be explained that random occurances don’t exist in a pre-structured game world. Nor will there ever be any variable costs that are different between players.

Ahem, the gem store does not allow players to set prices. The exchange rates are simply based on how many people are selling, and how many people are buying gems. I don’t know where you got that people agreed to anything.

As far as compound interest is concerned, the custom bid form of earning cash is based on your current wealth. Every time you increase your total wealth the ammount you can earn increases up to the point the market can handle the vast quantities of goods you are moving. The wealth disparity causes massive inflation on end game items and allows gold sellers to drastically undervalue the gem exchange rate.

Finally custom bidding does =not= place goods into the hands of those that need them. It takes goods from those who don’t. Those same people would still be capable of supplying the market by placing them for sale, and the value of goods would be much more accurate than it is now, as there wouldn’t be an artifical floor set by the players. And if the system was pregenerated and adjusted automatically for supply and demand, sales would already be instantaneous and this would be a non-issue.

Your misguided economic theory knows no bounds. You try to argue economics without even putting effort into researching how it really works…and dismissing real knowledge on the grounds that it does not apply here until John Smith hops in. The points which you have pointed out, and which I have replied, which you choose to deny/question (since I have no credentials here), which John Smith (an economist) validated…which you refuse to accept. I see no way to talk sense into you as you’re encapsulated in your own world despite the input from many of the posters here.

Many of what you say is true individually….but you failed to connect them together and understand how they interact with each other. You can’t even get the definition of price ceiling/floor right despite it being pointed out (I’m actually quite amazed that you think ceiling/floor is good, and claim that both is in place when only 1 is.). This isn’t how someone with a clear analytical mind would approach things.

I follow economy both on EvE, GW2 and RL (I am a RL securities trader).

GW2 markets are very good, in some details they are healthier than EvE’s (expecially the liquidity, the velocity and the granularity for the top traded items).

GW2 markets have no breaking issue, if anything is too much supplied the recipe is to nerf the relevant item faucet or add more of that item sinks (see those temporary recipes they recently implemented).
Demand and supply equilibrium is something tied but separate from how this game trading system works, and it works very well.

The only changes I’d implement:

- More transparent feedback about what’s going to be the seller’s revenue net of “taxes”.

- Ways to export the market data. I’d LOVE to be able and create GW2 market charts like the ones I create for EvE Online.

An example of what I have created for EvE by a simple CSV game data export is shown in the attachment.

Try this on for size.

If the lowest sale price is vendor price +1… have the TP auctioneer enable an option to just vendor it on the spot for vendor price. This will enable oversupply glut to get eaten, prevent newbies from getting taken advantage of, stop the complaints of the folks who are upset of all the vendor +1 listing etc. etc. Just have the Trade Post also “actually” buy stuff at vendor price. Makes everything streamlined and easy.

Ravnodaus.5130

If the lowest sale price is vendor price +1… have the TP auctioneer enable an option to just vendor it on the spot for vendor price.

I think that’s a really interesting idea. You take the folks that are just selling junk to clear out their inventory when there’s no convenient vendor out of the market. I’m assuming you would keep the TP 15% cut as a convenience tax? I wonder how many would still just list it at the lowest rate they saw it on the market and we’d end up with a glut at 2c over vendor.

@Vaerah – there is an open source project to interface with the TP web services to chart market data.

A price ceiling is a ‘government’ enforced value on a good that is different than the equalibrium price. This can be above OR below the equalibrium value. I fail to see how anything I have written would imply I don’t understand this concept.

Perhaps where you are being confused is the belief that a governing body is required to impose this restriction, or perhaps you thiink that a price ceiling needs to be below the market equilibrium.

As a final point here, you do not know my profession, my education or what I have researched. I contend that the similarities of this game world economy with those of the real world are slim, because they are. I, like you, am getting richer every day from the rediculous custom bidding oversight, but unlike you, I care that soon no other player will be able to afford end game items.

Pandemoniac.4739:

Ravnodaus.5130

If the lowest sale price is vendor price +1… have the TP auctioneer enable an option to just vendor it on the spot for vendor price.

I think that’s a really interesting idea. You take the folks that are just selling junk to clear out their inventory when there’s no convenient vendor out of the market. I’m assuming you would keep the TP 15% cut as a convenience tax? I wonder how many would still just list it at the lowest rate they saw it on the market and we’d end up with a glut at 2c over vendor.

@Vaerah – there is an open source project to interface with the TP web services to chart market data.

Yeah, no reason for it to work any differently, the only thing they’d have to do is basically have an infinity sized custom bid from ANET at vendor price. That way, you could always junk your junk, and it’d get removed from the economy just like vendoring… because if it’s selling that low, there’s either too much of it, or it’s useless garbage anyway.

CdrRogdan.8907:

Time is not a true limiting factor on resources, as you will never actually run out. And as new players can enter the market they provide a greater quantity of those same resources, something that wouldn’t be possible if those resources were limited.

I’m happy that you will never die. Perhaps you can share your secret with the rest of us?

Also I quit. I just hope you don’t vote in whatever country you live in. Obviously you took an econ 101 class and missed most of the important content, and now think you understand how all markets work. Or you’re a political scientist.

Also I am not getting richer from the custom bidding system. Sometimes I sell yellows on the TP (and guess what I undercut by 5ish silver because I want money NOW!) and I’ve never bought anything. That could change once I hit 80. I have 2 gold to my name in game and it doesn’t really bother me much. I’m not very good at combat and I get much more pleasure by improving my fighting skills than getting richer.

Edit: Having ANET put in a infinite buy order at vendor price +15% would be great, and would keep those who don’t know from loosing money.

The TP using a Last in First out system is broken, and should be fixed. As far as I know ANET is working on that.

I’ve read the whole thread over twice, and I’ll throw in my two cents. I’m not going to claim to be an economist, but I can claim that I got an A in Economics 101, which just might put this into perspective:

CdrRogan, you are wrong. Unlike Wazabi, I think you do understand what a ceiling and floor ARE, but I think you don’t understand what they DO. Although he did say English isn’t his first language, so that may be a nuance he isn’t getting across very well.

What you are proposing, CdrRogdan, amounts to the government take over of the market – what the layman might confuse for communism. And just like Soviet Russia, it can only end badly – just ask them. >.>

Now, if I am understanding you correctly, you perceive the problem to be that people have the ability to put in a buy order for less than the vendor value of an item, yes? I mean ultimately, since there is more too it (these get bought, then resold in some fashion, with a bunch of variables et al), but the whole thing you take issue with disappears if people stop jettisoning goods onto the trading post so cheaply, yes?

Here’s why this is a fallacy: if people were unable to list the items, at that price, they’d put them up there anyway. The simple fact of the matter is, every single person I know in game with a single exception (and I’m in a decent sized guild) uses the TP to drop items, so they don’t have to walk back to a vendor. The loss they are paying is worth it, to them, to not have to take that Time resource you’ve dismissed as a factor, in order to increase the value of their goods by pitiful amounts.

Time is in fact, the most important factor here. We’re talking about a true post-scarcity market, after all: anything can be had by anyone who is willing to put in the time. People are, as a rule, interested in saving themselves time, time being the one thing no mortal life form ever feels they have enough of (speaking generally of course). And people are willing to “spend” in order to save time. We have whole lines of products, entire categories of invention, dedicated to reducing the time it takes to perform our chosen activities.

And that includes video games.

So when somebody throws something out there for sale at an obscenely low price, the lost value is what they’re “paying” as the convenience charge to save themselves some time. The other players who buy these good are, therefore, providing a service, and they make their wage based on the profit margins of their individual purchases.

Now, on to the ceiling. What this actually does, is accelerate the devaluation of money, and in this case, creates irritation as a result of the interface – something no sane game developer should ever deliberately introduce into their product.

The short explanation for the devaluation effect is this: because we are talking about a true post scarcity market, people do not have a consistent money sink such as their rent or property taxes, survival oriented purchases, et cetera. Therefore, yes, the value of commodities, goods people will want for whatever reason (especially the saving of time mentioned above) suffers inflation. But if you cap the value of goods artificially, you are setting the value of money in stone, but people will continue to gather ever increasing amounts of money. They can’t help it, so long as they continue to play the game at all.

Eventually, people have more money than they have things they want to spend it on. Money loses value compared to which items you already have, and the velocity of money takes a nose dive: which in laymans terms, means that people are trading less. And of course they are, consider the market they have to work with in this scenario. You get, Item X of Awesomeness, and have no use for it personally, so you go to list it on the Trading Post. It joins Y amount of Item X’s that have accumulated there, sitting at the max price. It has nothing to separate it from all of the others just like it, so they all just sit there until somebody wants one, and then that somebody has no reason to buy yours over any other one.

This is the point of irritation: In order to move my goods, I have to list them for less then the artificially determined price – just like I would in a free market, except that the price ceiling is determined by what people are willing to pay, and automatically as a result, increases to accommodate the growing amount of money available in the game. But let’s go back to our fictional, “communist market” for a moment and examine this further.

What do you think happens as time goes on? I already know: As people start to hit that moment when they have nothing else to buy, since everything is easy to acquire, they start putting forth less effort to sell in order to have money, because it has no value. It no longer saves them time, much less anything else. Money has no function any more. So, people slowly stop selling. Some people do continue, of course, providing goods for newer players, but eventually the majority of these fall by the wayside as well, for a simple reason.

They already have too much money. They can’t gain anything from continuing to participate in the market, and they aren’t losing money faster than they gain it. There is no longer a challenge or competition in the marketplace, so there is really no gameplay – no fun to be had.

Either my goods end up sitting just under the artificial cap, or they end up just over the vendor value, or more likely, I just start vendoring everything and a few people continue listing things way up at the artificial ceiling. We no longer have a market, at this point. We have an item shop, with mostly fixed values, from which everybody will buy the things they need in order to not be behind the gear ceiling, and then largely not participate in further.

So I ask you, CdrRogdan, how is this item shop an improvement over the market we currently have?

It certainly doesn’t look like fun, and I don’t know about you, but I prefer to do things in games based upon how fun they are. >.>;

Shannae you discussion of the value of time is spot on.

Shannae.6192:

we are talking about a true post scarcity market,

I disagree with this. Without scarcity the study of economics is pointless. All we have to do is come up with new things to be scarce. Reputation, or relative wealth are some of the easier “goods” to think about. I would suggest you can build your reputation by purchasing siege engines in WvW and showing off how wealthy you are to the rest of your server. There will also always be someone who is the richest, many people find value in being at the top of the stack, no matter how high it gets. In that sense somethings will always be “scarce”

I also think your discussion of a price ceiling is a little off. Consider a binding price ceiling (one where the price is arbitrarily set below what the equilibrium price would be). Most econ 101 classes say that there will be shortage, as quantity supplied is less than quantity demanded at the price ceiling. I propose that no one would use the trading post in this case. We would see trading move away from the TP and into forums or general chat. Those who want Item X of Awesomeness wouldn’t be able to find it on the TP and would be forced to go searching for it somewhere else. Those who wanted to sell Item X of Awesomeness would have to spam or spend their time in a forum to sell the item at the equilibrium price. If someone did sell Item X on the TP then an enterprising individual would come along and purchase it and re-sell through spam or a forum for a profit. Again we would have to consider how much players value money now vs money in the future, the taxes on the TP and how much time/effort it takes to sell an item in chat or a forum. So rather than an “item shop” we would have an empty TP. Doesn’t sound great to me.

Considering your discussion of price ceiling and inflation. I’m a little unsure about how accurate you are. You may be totally correct in a “Post Scarcity Market”. Although in the real world price ceilings are often put in place as an (futile) attempt to stop inflation.

Anyway if gold suffered inflation then I suggest we would see players moving to a barter economy, or defining a new currency. This has happened in many other games, from personal experience Diablo II used Stones of Jordan and then rare runes as a form of currency, and it sounds like extos became currency in GW1. All this does is increase transaction costs and encourage a “black market” (one not explicitly controlled by ArenaNet) to develop. Also it would encourage duping of whatever the currency becomes, although this isn’t much different than the problem of gold farming.

Also from reading Wazabi’s posts is sounds like he has an economics education to me at least…

Good discussion Shannae, thanks for taking the time to think intelligently about economics!

Placing custom bids has nothing to do with why the economy is bad or good (which is just a matter of opinion anyways).

The only thing it does is allow the bidder to take a risk in order to make a profit. And in the process, he provides liquidity to the market.

A trade is always a win-win situation for both parties, because the trade that occurs was MUTUALLY DESIRED. The seller and buyer would not sell or buy at the trader’s price unless it was the best possible price available.

CdrRogdan.8907:

Time is not a true limiting factor on resources, as you will never actually run out. And as new players can enter the market they provide a greater quantity of those same resources, something that wouldn’t be possible if those resources were limited.

This is an absolutely absurd claim to make. Time is exactly the limiting factor that determines whether I will buy something on the TP versus going out and looking for it myself. The amount of time it would take me to find another 30 vials of whatever blood is precisely what leads me to either pay or not pay the current going rate on the TP.

Time is also the main thing that really does make this a real-world market in meatspace terms. Because there is a real-world opportunity cost to spending time just to grind certain materials for crafting or to go through an area hoping for a good weapon or piece of armor to drop. The considerations that occasionally lead me to spend more money to have food delivered so I can save the time of going to pick it up or cooking it myself are the very same considerations that lead me to spend in-game money on materials and items instead of going out and finding them myself.

Regarding complaints about custom bidding, this really isn’t an opportunity for infinite exponential growth, because the “infinitely” available items rarely have any margin to speak of, when you factor in the 15% cut of any successful trade that the BLTC takes. The items that do have real margins tend to be the ones that aren’t traded in very high volume, and so you actually have no reason to assume that anyone will accept your custom bid during the time you’re willing to keep that money locked up in the bid where it can’t be used to buy other things.

@Shannae.6192:
I like the way you argue the limiting resources being time. High Distinction for you. I would love to discuss the rest of your post…but my brain just woke up…maybe later.

I can see the point that Shannae made on the relationship of price ceiling and inflation. If the ceiling is lower than the price that player is willing to pay, that means they are paying less for an item which is more valuable, thus they have a surplus of money to be spend elsewhere (increase in purchasing power), and when that happen, price of other item that has yet to hit the ceiling will increase.

If the price of an item is on ceiling, and the real value is greater, that decreases the incentive of a player to farm for those mat…which increases the scarcity of the item and should had pushed the price further up…but is capped by the ceiling. We’ll have a situation where there is no supply of an item (extreme case). In all, it screws up the balance of the market. Not a good thing. Item who’s value is below the floor won’t clear, so the only thing left to buy in the TP are items in between the floor and ceiling. The extra purchasing power of money will put pressure on them…pushing them to ceiling….you know what happens next.

@Siyeh
Gold is a fiat currency here. When there’s an unstable inflation/deflation, the “trust” in the value of fiat currency decreases as its expected value have a huge variation. In that scenario, people will move to using item as a currency as its value is preserves through it’s intrinsic usefulness. Then you’ll have your barter economy.

Quoting seems to be not working…

“I can see the point that Shannae made on the relationship of price ceiling and inflation. If the ceiling is lower than the price that player is willing to pay, that means they are paying less for an item which is more valuable, thus they have a surplus of money to be spend elsewhere (increase in purchasing power), and when that happen, price of other item that has yet to hit the ceiling will increase.”

But why would we expect there to be any for sale at that price? I suppose a few players might get lucky and happen to be searching at the same moment someone posts one. But wouldn’t enterprising players purchase the item from the TP the moment it went up and re sell it through another venue?

I still think we would see a mostly empty TP. The difference between equilibrium price and the ceiling price would be accounted for in another dimension. Usually through waiting time, in this case through increased search costs.

I’m unsure if the expected value of a fiat currency has to have large variance. Thinking of D2 as an example (apologies if you didn’t play), gold never had much value, so the expected value of gold was basically nill since the beginning of the game (although I did only start playing at LoD, someone please correct me if gold ever was valuable). There was no variation in the value of gold, it was always zero. But players still defined new currencies, and as you say these items had intrinsic value.

One thing to consider is that people merching and remerching items continously actually has the effect of keeping prices lower in the long term.

Since every time something is sold, 15% of the money just disappears from the economy, it increases the value of money due to less money being available. Having someone buy an item means 15% of the money they spent on the purchase disappears.

When they then resell it at some presumable markup for profit, when someone buys it from them 15% of the money that new buyer spent is also removed from the economy.

It’s pretty significant.

Good sir, you must be trolling. This little “problem” is actually one of the many ways to keep people from screwing over our economy in this game. It helps people from exploiting our trades and inflating prices, and keeps people from gold farming.

@Siyeh.2407
Yup…I would agree that it will result in an empty TP in the long run.

I didn’t play D2….so I suppose what you say could be right…

Shannae, I read over your post, I really appreciate the logic you used, and I agree with the majority of your conclusions, however there is a point of contention: I did not recommend a floor or ceiling in a player run economy. I recommended a price floor and ceiling in an automated economy.

There actually wouldn’t be any need for vendors in the automated economy and so the floor was supposed to represent the vendor price, while the ceiling was suppose to act as a failsafe to items skyrocking beyond new player purchasing means, due to later players not having any reason to produce or sell.

Time is not a limiting factor in the sense that the product becomes unavailabe and the price hits a temporary high while people run around seeking a new source. Because this cannot occur, it is easy to automate the value.

The above was recommendation 1

Recommendations 2 and 3 are meant to address the same issue, that people can custom bid 1 copper below your sale price (a difference that is potentially meaningless) and have their goods sold first.

For products that sell in high quantities, this is basically a non-issue (though it can be annoying), but for products like exotic gear that takes a great deal of material to produce and has a long wait time, it is a death sentence to equipment sales. My propositions were 2: Require a 10% drop in sale price to undercut, or 3: Give sellers the ability to list a range they are willing to sell that will automatically adjust when someone undercuts them.

As far as the removal of custom bidding is concerned, it is creating an artifical floor to product value, based on what people want to earn as a profit from this type of transaction and only loosely based on the supply and demand of the product. The second (and much more important) issue is that people are using it to increase their wealth by an exponential ammount. And gold sellers are no doubt having a hay day with this while other players don’t even realize it is such easy money.

I don’t agree with the original problem statement. When there’s a large gap between the lowest WTS and the highest WTB, speculators will enter the market, attempting to make money off that difference. The bigger the gap, the more people that will try to use this as an easy way of buying low and selling high.

That ultimately drives the WTS prices lower (each speculator undercutting the others to sell quickly) and drives the WTB higher (each speculator trying to obtain enough product to sell). This will drive that product to a new equilibrium more quickly than any sort of proposed “government regulation.”

Since I don’t agree that there’s a problem, I can’t support any of the proposed changes.

It makes me a little bit sad that John Smith pretty much confirmed crafting is not intended to be profittable.

CdrRogdan: any chance that you’re Chinese?

Illconceived Was Na.9781:

I don’t agree with the original problem statement. When there’s a large gap between the lowest WTS and the highest WTB, speculators will enter the market, attempting to make money off that difference. The bigger the gap, the more people that will try to use this as an easy way of buying low and selling high.

That ultimately drives the WTS prices lower (each speculator undercutting the others to sell quickly) and drives the WTB higher (each speculator trying to obtain enough product to sell). This will drive that product to a new equilibrium more quickly than any sort of proposed “government regulation.”

Plus, as I mentioned before (that was in this thread, right?) the items that do have huge margins tend to be really valuable and rare items that are not likely being bought or sold at either of those prices. Sure, you can put in a custom buy order at 1c above the highest existing one, or a custom sell order at 1c below the lowest existing one, and your offer is roughly as unlikely to be taken up as the ones already there.

If you actually want yours to be the first offer accepted, you’ll have to overcut or undercut by something substantial, possibly even greater than the OP’s proposed 10%, because no one is seriously going to jump on your sale for 10g49s99c when they were completely ignoring the previous listing at 10g50s. And if I’m unwilling to sell that same item for 3g, I’m equally unlikely to sell it for one copper more. Those items tend to stay on there for awhile and not really have a widely agreed-upon price yet.

The stuff you can reliably trade quickly tends to be raw crafting materials and consumables, the margins on which tend to be nonexistent.

Yes, there are opportunities for arbitrage, just like in the real economy. But also just like in the real economy, they don’t tend to last for a very long time because wildly incorrect pricing is a problem that gets corrected by the very people trying to take advantage of it.

Hippocampus.8470:

Yes, there are opportunities for arbitrage, just like in the real economy. But also just like in the real economy, they don’t tend to last for a very long time because wildly incorrect pricing is a problem that gets corrected by the very people trying to take advantage of it.

Exactly what I was trying to say (only phrased more succinctly).

After 4 years in the Eve Online trenches I can say that OP is ‘misguided’. It’s clear based on the “Solution” that the problem is ‘competition’ and ‘free market’. The root problem is there isn’t enough demand to short a supply enough to drive prices back up.

Simple: Increase Demand.

How: Take a look at Eve Online. Large scale operations and ships require large scale supplies. Make items that take 400 Healing Long Bows from crafters.

Not only can you have the WvW front of the war but you can easily add what many call “Off Page” conflicts. Think of all those Koei sim games like Romance of the Three Kingdoms. Give guilds, players, and servers a reason to actually consume some of the product out there.

The free market works fine when there is enough demand to fuel supply. Need 30000 copper ore for that Copper Tower upgrade? That will drive up prices just like when you see 500 units at 33 cp and another 1000 at 34 cp (and so on).

The ‘problem’ is over-supply, not a free market.

Siyeh.2407:

Anyway if gold suffered inflation then I suggest we would see players moving to a barter economy, or defining a new currency. This has happened in many other games, from personal experience Diablo II used Stones of Jordan and then rare runes as a form of currency, and it sounds like extos became currency in GW1. All this does is increase transaction costs and encourage a “black market” (one not explicitly controlled by ArenaNet) to develop. Also it would encourage duping of whatever the currency becomes, although this isn’t much different than the problem of gold farming.

I’ve heard people repeat this over and over again and it’s complete nonsense. Diablo II did not move to an alternative currency because of inflation. It moved to an alternative currency because of price ceilings! The game limited the amount of money you could carry at one time, thus whenever anyone wanted to trade for something that was worth more than the money cap, they used stones of Jordan. It had absolutely nothing to do with inflation at all.

Idgarad.6105:

After 4 years in the Eve Online trenches I can say that OP is ‘misguided’. It’s clear based on the “Solution” that the problem is ‘competition’ and ‘free market’. The root problem is there isn’t enough demand to short a supply enough to drive prices back up.

Simple: Increase Demand.

How: Take a look at Eve Online. Large scale operations and ships require large scale supplies. Make items that take 400 Healing Long Bows from crafters.

Not only can you have the WvW front of the war but you can easily add what many call “Off Page” conflicts. Think of all those Koei sim games like Romance of the Three Kingdoms. Give guilds, players, and servers a reason to actually consume some of the product out there.

The free market works fine when there is enough demand to fuel supply. Need 30000 copper ore for that Copper Tower upgrade? That will drive up prices just like when you see 500 units at 33 cp and another 1000 at 34 cp (and so on).

The ‘problem’ is over-supply, not a free market.

They already have items that cost 400 Healing Long Bows. They’re called level 80 exotic weapons obtained through the mystic forge. The primary reason you don’t see people buy the healing long bows and turn them into exotics is because of the price floor – the vendor sell price makes converting most items too expensive.

Idgarad.6105:

How: Take a look at Eve Online. Large scale operations and ships require large scale supplies. Make items that take 400 Healing Long Bows from crafters.

And now I’m giggling at the idea of a starship made entirely of strung-together long bows.

EVE is a great game.(I have a current sub and have for years and years).

EVE has never had more than around 400K subscribers. It never will.

This game is fun because its NOT like EVE.
My casual gamer friends hate EVE. They love this game.

Strill.2591:

I’ve heard people repeat this over and over again and it’s complete nonsense. Diablo II did not move to an alternative currency because of inflation. It moved to an alternative currency because of price ceilings! The game limited the amount of money you could carry at one time, thus whenever anyone wanted to trade for something that was worth more than the money cap, they used stones of Jordan. It had absolutely nothing to do with inflation at all.

I did play the game only after LOD. I never traded anything for gold, nor ever saw a price quoted in gold. I don’t think you could have bought a chipped gem for gold… Was the situation different in hardcore?

@Idgarad.6105
Yup, I believe the problem that leads to most of the complaints about TP are competition and free market…both a foreign concept (despite the fact that many “think” they know) to many traditional mmo gamers.

Tweaking the demand/supply for item won’t stop the complaints though. Increase demand, we’ll have them complaining price of certain item is too high and that it is impossible to get their “sword of thousand truth”, which turns this into a grind, which is not GW2 promised. Increasing supply, we’ll have them complaining they can’t make money in the TP and price is being depressed, blaming it on gold farmer manipulating the market or a general currency devaluation.

@Strill

After thinking for a few. You are correct. I wonder what would have happened if the price ceiling wasn’t in place. I suspect that D2 still wouldn’t have used gold as a currency. Or maybe Blizzard would have had to pull a North Korea and drop a few zeros off everyone’s bank account…

The only problem I really have with the economy is that 95% of blue gear is vendor fodder, as is 70% of green gear, and any crafted gear that’s not a Rare or higher.

But this problem is a drop rate issue. If the drop rates of blue and green gear were cut in half (and tweaked to be slightly higher in dungeons), we’d see the prices on those types of items rise to compensate, and crafting would be a desired alternate source of gear while leveling, rather than a nice distraction between dynamic events. It would also raise the price of raw materials, making farming a lucrative way to cover the current armor repair and waypoint costs.

But I’m sure if Anet wanted to take that approach, they would have done so long before now.

…are we really complaining about wide bid/ask spreads? For anything sufficiently liquid those have been driven close to zero very quickly, as they should be. For illiquid goods, the spreads are high due to risk premiums and an implied rate of interest that is extremely high.

Many of the ‘problems’ in the economy aren’t problems as much as complications from many different types of value interacting with the monetary base…I.E., the extreme amounts of experience available from crafting (as well as character development) have most sub-400 crafted goods being sold at a monetary loss – but a real value gain, where the player is on the whole paying for character development and XP.

In any case, people who understand bid/ask spreads taking money from people who do not understand bid/ask spreads is pretty classic investing and I don’t see a problem with it here – the market is competitive enough that those spreads have quickly been bid down to people time value of money.

@john
I think CdrRogdan is trying to get a few point across:
- Proposal of using a price range rather than a discrete price for trading.

Intuitively, I fail so see how it could result in a better market since it is more complicated than the existing bid/ask system. Any mechanism that is complicated runs the risk of people not understanding it…thus limiting it’s efficiency. Heck, a simple bid/ask system had us cracking our heads and debating… On a more technical side, I’ve never had much interest in Auction Game Theory, which is what the price range thingy resembles. Given that the aim of any system is to me as Pareto Efficient as possible (I apologize for technicalities), I’m sure there is a way to determine if the price range system is more efficient than the bid/ask system. Looking at it on the surface, I don’t think so because if its complexity.

CdrRogdan seemed to have a distaste for buy orders, thinking that is is harmful to the economy. I believe me and a few others had addressed most of his other arguments, all I can say is that he has a very different idea on how economy work than what most people would think.

Ghoest.3945:

EVE is a great game.(I have a current sub and have for years and years).

EVE has never had more than around 400K subscribers. It never will.

This game is fun because its NOT like EVE.
My casual gamer friends hate EVE. They love this game.

Either oversupply and price falling in themepark or high demand and sandbox pvp everywhere.
Themepark=diminishing supply on armor/weapons(and everything else). Because you need only 1(of specific level) per character, and you won’t lose it.

In my opinion the only thing TP misses is timestamp, cause in current state you can store you items on it forever and pay just few copper for it. Moreover without a time-limited auctions prices will be only dropping, I’m not an expert and I don’t even have a half of your knowledge but isn’t it a bad thing that prices on items drops to the point where I have to sell almost everything that dropped for me to a vendor because it’s more profitable?

My 2 cents.

I originally noticed this topic to maybe learn a little something about the TP. I have. There are some smart people here.

All in all, the way i see it, things boil down to this: The OP comes across to me as someone who is trying to play the market and is not 100% successful at it as he was hoping to be. He’s justkitten off that he got some sell prices wrong and is being undercut. 1c or 1s, it makes no difference. It seems you want the game to change to your tastes so you can have an easier time to make money rather than accept the extremely simple economics that exist in GW2. I do not accept your altruistic attitude that “I’m just concerned about the game and love it and you better do something I say or it will break.” BS. There have been numerous, well thought, well explained posts that showed how your suggestions would be bad. You decided not to listen or learn from them. You just want to keep kittening. “Waaahhh. I can’t sell my thing because it got undercut by 1c, then that got undercut by 1c. Waaaah.” Figure it out! I suggest you can’t, because I read this thread and learned. You’re just being defensive and using a bunch of big words and terms (or a plethora of paramount nomenclature) to make yourself sound smarter than you think you are and using your attitude and misguided vocabulary as the foundation to why your argument is right. It’s fine to have an idea, post it, and argue it for a bit, but let it go already. This thread has moved on.

On a side note, more of my change (as in cents):

Re: seperate TPs for each server.

I’m just a lyamen, so I don’t really know, but wouldn’t limiting the amount of supply of people, and therefore stuff, just drive prices so high, no one would be able to afford them because gold drop rates would be the same (i feel like i’m missing some higher end economic concept here though)?

Also, one might argue that the ratio of stuff to people is the same whether it’s on one server or all servers, because it’s the same game with the same drop rates, but it isn’t. Not all servers are created the same. There are different populations. Also, does a server by itself offer enough diversity? It’s the diversity of players who farm for themselves, farm for selling, buy and sell for utility, etc. that creates the market. Also, one needs to look beyond the economic argument and try to figure out how that would effect the game. I could forsee people creating characters on different servers, then seeing what is selling high on one server (like a low pop serverver), buying it low on another, then transferring that character to another server. So, you’d be almost back to where you were to begin with with a worldwide TP.

My personal stance is having the in game economy be free market. It’s a wonderful thing. The thing that I really don’t want is anything that would screw things up to the point where we get a barter system or a black market. I do not want to see my chat window scrolling a milllion miles an hour filled with WTB and WTS and website ads.

Very interesting thread. Probably spent 2 hours reading it and replying. Sun came up a while ago and it’s time to go to bed. Love the game.

I will jump in here with a intuition that I had earlier. Why I understand a lot of Economics I am not an Economist ( Just reading The Economist ) so here goes:

What about a change allowing people to relist an item without paying additional fees provided the relisted price is lower than the original price?

Now this may enforce downward spiraling of prices for many commodities and of course it’s open to many modifiers such as a constraint on the amount of free relists (1-unlimited) or the relisted pricing (X % below previous listing price or must match new lowest listing price) BUT as I enjoy intelligent discussions I would ask for feedback of all the knowledgeable debtants in this thread.

@John Smith
It’s lovely to talk about markets. We who also play EvE Online have a forum (Market Discussion) devoted to that. I post in there as Vaerah Vahrokha. Both in my posts and my blog I often talk about the many parallels between the (properly implemented) game markets and the real life markets.
I have the highest admiration for GW2 markets, they are really shaping up nicely!

Devildoc

It makes me a little bit sad that John Smith pretty much confirmed crafting is not intended to be profittable.

Sure it’s profitable, you just have to craft stuff that is worth in the eyes of the buyers.
I make a decent profit by crafting items, I just study markets demand instead of complaining on a forum.

Illconceived Was Na

Hippocampus

Yes, there are opportunities for arbitrage, just like in the real economy. But also just like in the real economy, they don’t tend to last for a very long time because wildly incorrect pricing is a problem that gets corrected by the very people trying to take advantage of it.

Exactly what I was trying to say (only phrased more succinctly).

It’s the self optimizing nature of the markets.

Markets per se exist to provide the best possible price at a given moment, so it’s really working as intended.
Only when a new market equilibrium has to be found, markets “trend” and move and spreads rise, but that’s temporary.

Hippocampus

And now I’m giggling at the idea of a starship made entirely of strung-together long bows

Liberally add rust and duct tape and then it’s probably the Minmatar Tempest battleship.

Spurnshadow

Re: seperate TPs for each server.

I’m just a lyamen, so I don’t really know, but wouldn’t limiting the amount of supply of people, and therefore stuff, just drive prices so high, no one would be able to afford them because gold drop rates would be the same (i feel like i’m missing some higher end economic concept here though)?

Separate TPs would be terrible.

- Extremely lower market liquidity means spreads would rise and thus the market would not be as optimizing any more. Less efficient markets is bad since markets’ job is to provide the best price at a given point in time.
- Harder to find those rarer items at all. As of now there is plenty of items there’s only 1-2 sell orders for and this is with all the servers participating.
- Lower liquidity would easily cause far less velocity. I.e. you setup your order and wait for many days to get it filled. Say goodbye levelling a profession by putting up an order and going to take the stuff in 30 minutes tops. It’d take days and then you’d have already had to self grind it or you’d have vastly outlevelled that content.

Only real improvement I can see for this TP is to introduce fixed listing fees for commodities (i.e. ingots, planks) plus free relisting of the same. It’d be akin to a regular futures commodities market.
But then, GW2 is not a “my little banker” game, it’s hard to make people understand the current TP as is, adding another fee structure on top of the existing auction model would just make it too difficult.

I’ll chime in as to what I believe is wrong with the TP. This is much more a discussion piece, listing ideas that should be discussed when trying to understand whats wrong with the TP.

As John Smith mentioned in the first page, or at least alluded to, people do not act the same way in this game as they do in real life.

I don’t think the TP has any inherent design flaw. Instead, the problem lies in any players ability to do anything with no limits. In addition, psychologically, there are no ‘necessary items’ that aren’t being reproduced by hundreds of thousands of players. In real life, this is not the case. Players need to rely on others for services, and are willing to provide a premium(or profit) to save time/pay for a service which they can not do themselves.

GW2’s core design philosophy doesn’t give players any reason to ‘need’ anything but some exotic gear(to which millions of people are making). There is nothing to upgrade, there is no place anyone else can go that I myself can’t. And there is a lack of (none?) rare recipe ingredients to be used in tandem with rare recipes.

I’ll reiterate: The TP will never offer anyone any profit due to the design of the rest of the game.

Profits in games like this come solely from ‘having something other people can’t get.’ And that simply doesn’t exist.

The current set up can be equated to time = money. 1 hour = 1 gold. This is flat across the board…where as some may be overly lucky and get a dusk of rage, where as someone else might get zero greens for 2 days straight.

The solution, imo, is to create a slew of rare recipes that are randomly found, at a low drop rate.

frOst.2198:

I’ll reiterate: The TP will never offer anyone any profit due to the design of the rest of the game.

And yet many people make a lot of profit by using the Trading Post. I think you are really trying to say that crafting won’t make a profit?

But, that too is incorrect. There are -some- items that are profitable to craft. The majority though are not.

Profits in games like this come solely from ‘having something other people can’t get.’ And that simply doesn’t exist.

No. Profits in economies are from providing goods that people need and / or want. There are many items in GW 2 that are wanted from crafting items to interesting looking models to good stat items.

The solution, imo, is to create a slew of rare recipes that are randomly found, at a low drop rate.

This is why I think you are really writing about crafting and not the trading post as such.

I don’t think the TP has any inherent design flaw. Instead, the problem lies in any players ability to do anything with no limits. In addition, psychologically, there are no ‘necessary items’ that aren’t being reproduced by hundreds of thousands of players. In real life, this is not the case. Players need to rely on others for services, and are willing to provide a premium(or profit) to save time/pay for a service which they can not do themselves.

GW2’s core design philosophy doesn’t give players any reason to ‘need’ anything but some exotic gear(to which millions of people are making). There is nothing to upgrade, there is no place anyone else can go that I myself can’t. And there is a lack of (none?) rare recipe ingredients to be used in tandem with rare recipes.
I’ll reiterate: The TP will never offer anyone any profit due to the design of the rest of the game.

That’s not close to truth in any way. Like spherical horse in vacuum.