Guild Wars 2

i won’t take long but why would you a tax in a game plus a listing fee with total of 15% of the item’s price .. i believe it’s really too much as i tried to sell my Zab for a price of 340G .. i had to pay a fee of 17G and with the calculating of tax i get profit of 300G so it’s like 57G i lost for nothing .. atleast give us the ability to do a direct trading with other players cuz i don’t like paying 57G .. just cuz u wanted it to be like this.

Economics.

15kittens

Well i study economics .. accounting specialization

but this isn’t real life .. they get no profit from the listing fee or the selling tax
it just disappear

I think it is so you don’t use it as an extended bank. I.E can’t say my iron ore is 500G and just keep it their and remove it when I need to use it.

It’s called a gold sink.

In a game economy you need to have things that cause you to lose funds in one way or another. Without that there is no good economy in game and inflation etc will go crazy. If your complaint was towards the size of tax that’s different, but there’s a team devoted to the economy and making sure it is as stable as they can keep it. Taxes are a needed evil, as much as I hate them I understand why they are important. Not to say I don’t miss my military time when I could buy $300 worth of stuff from the PX and it would cost… $300 ^^; They even added bottled water deposits where I live.. So much for buying 34 packs of water, cause I never make it to the store to get the deposit back lol..

In before John Smith points out something obvious.

Edit:Doh.. gosh hes fast.

Geotherma.2395:

In a game economy you need to have things that cause you to lose funds in one way or another. Without that there is no good economy in game and inflation etc will go crazy. If your complaint was towards the size of tax that’s different, but there’s a team devoted to the economy and making sure it is as stable as they can keep it. Taxes are a needed evil, as much as I hate them I understand why they are important. Not to say I don’t miss my military time when I could buy $300 worth of stuff from the PX and it would cost… $300 ^^; They even added bottled water deposits where I live.. So much for buying 34 packs of water, cause I never make it to the store to get the deposit back lol..

In before John Smith points out something obvious.

Edit:Doh.. gosh hes fast.

Come to Oregon. Unless your Californian, we got enough of those :p There are a few states without sales tax.

And most places have the deposit for an incentive. It’s only a tax if you let it.

But to be on topic – cash sinks like this are needed because “money” in an MMO is really a limitless resource as far as creation goes.

City of heroes, when it first added in what they had for legendary gear, had it sell for millions. Five million influence for the recipe was huge… at the start.

Before it was shut down, people were selling the more popular ones for 2billion, which was the bid cap, if not more via off-tp transaction. And this was with each peace of gear (at the start, later some didn’t expire) having a 7-level maximum useful life.

CoH had uncontrolled inflation.

You see to craft something rare you had to get it’s recipe or required components, at least one that is classified as rare. So you had to farm critters, a lot of critters, because the chance any one of them would drop what you wanted was, well, rare (and they meant rare in that game). Side effect is even if you haven’t found everything you were looking for, you now have a huge pile of game currency since every critter will give you some. And the thing is, you are looking for a lot of rare recipes, each with at least one rare crafting component required.

So farming for drops you will end up stinking rich even if you didn’t get everything you were looking for. That’s OK, there’s a consignment house where you can by from other players, a lot who want the same item and they are also stinking rich so whoever has the most game currency gets one when one is put up for sale. Sooo, players started to farm also for game currency, selling drops they didn’t want (we had a very limited inventory system, you really couldn’t hoard without losing drops).

The only real currency sink was the sales tax and it simply wasn’t enough. Lots of players capped out their bank at 2 billion and came up with unique ways to save more. The real valuable loot were routinely traded outside of the consignment house because the going rate was over 2 billion.

It was pretty ridiculous toward the end. I crafted 20 of a popular item every day before logging off, I placed orders for the raw materials for next night and put the items up for sale at 10x my crafting cost. They always sold out in under 24 hours. And I was a green horn novice compared to the market savvy players.

In game inflation is a very, very bad thing if it’s not kept in control by some means. Buying from merchants, repairing armor and the TP tax are the only way to “destroy” gold directly in this game. I guess destroying items in a chance to upgrade them in the Mystic Slot Machine also destroys wealth, at least indirectly. Salvaging might as well given a big enough sample size.

i don’t know anything about economics.. but i imagine if there was no or a smaller tax, playing the tp or simply trading a lot would become almost mandatory. simply because of how much more efficient it would be compared to any other method of making money.

Playing the TP already is very efficient, it’s mostly limited by supply, i.e. the maximum possible throughput of your transactions. It’s easy to generate 30-50% net gain with a bit of gold, the tricky part is doing that with hundreds or thousands of gold. Fortunately, most people don’t understand how the TP works or just don’t care because they don’t want to wait a week for a transaction to complete. And fortunately the economy is very stable – just watch out and end all transactions before a patch hits live if you’re not sure what’s gonna happen.

Well to be fairly honest, the existence of the tax is more of a regulation procedure than a penance to the player’s trading profit.
If this profit tax didn’t exist, the prices would meet up to the point that the player would receive the same amount of profit from the same items – Expected minimum return!
Also, inflation would surely rise up as the availability of the gold would be higher, thus the will to spend more for the same items.
In the End it may seem unfair, but you just have to do the math counting on it:
Profit = 0.85 * Selling Price – Cost

/Cheers

I’m not an accountant nor an economist, I’m a chemical engineer.
Day one of my University course back in 80’s the first thing we were given was an equation:
What goes In = What comes Out + Accumulation

This equation applies to pretty much all aspects of engineering and for that matter life.

In this respect, every time you kill something, gather some resources or complete a quest coins are being put into the game.
If coins accumulate in the game this will lead to inflation, not always a bad thing but does need to be managed.
In order to prevent the Inflation being uncontrolled and spiralling there must be mechanisms for coins to be removed from the game. There are actually very few in GW2 … gem purchase and tp tax are just about the only ones I can think of.
[edit: oh and wp travel]

well the fee of 5% is enough with the WP travel, the repairing costs and the Gem purchasing.
if the idea is keeping the cash low and the prices controled, i know a game that is running since 1999 and still going and there are things that were for 100k price of that game’s coins .. and now it’s for a billion and still that game is running very well with millions players all over the world

i agree there must be a way to take off cash but in GW2 there are more than enough ways.

Behellagh.1468:

CoH had uncontrolled inflation.

Just to be a bit off topic, but it got even crazier when people/me would just afk pvp io farm in their sleep :P A couple pvp ios went for more than the inf cap, so you’d just do private trades. You could have a personal sg base stock full of ios worth more than you’d ever need in the game’s life time (sad face). But yeah, gold/inf meant nothing in that game in it’s last few years.

Edit: Just saw you mentioned the ones that went for over 2bil, but still :P
2nd Edit: This wasn’t really meant for you, but it felt good reminiscing.

Smuggler.6739:

well the fee of 5% is enough with the WP travel, the repairing costs and the Gem purchasing.

I tend to believe John, who’s actually an economist and has all the internal numbers in front of him, when he says it works out this way instead of <random internet guy>, sorry.

I’m sure the 5% up front is so that people don’t use it as storage, but I really wish there was an alternative to paying up front AND I wish that it would tell you up front what the total charge is.

What if there was a choice of 5% listing, 10% selling OR 20% selling charge. That way people who don’t have enough money for the selling tax could list for less profit overall.

If some mechanism isn’t put into place for poor people who “luck out” and get an item that sells for a lot of money to be able to list that item, then the game will encourage outside of the tp deals which don’t act as a money sink and are susceptible to fraud.

It’s all well and good to say, you should have used the trading post but if someone doesn’t have the listing fee, how can they?

Also, to prohibit people from taking advantage of that and listing things for way above a selling price (to use as storage), if they unlist the item without selling it, then they automatically have to pay the 5% listing fee.

Katz.5143:

I’m sure the 5% up front is so that people don’t use it as storage, but I really wish there was an alternative to paying up front (…)

There is an alternative – fill a buy order.

You still pay all fees for filling a buy order.

Pandemoniac.4739:

Katz.5143:

I’m sure the 5% up front is so that people don’t use it as storage, but I really wish there was an alternative to paying up front (…)

There is an alternative – fill a buy order.

Can you fill a buy order with it deducting all the fees from the buyers payment?
That is, if you don’t have the money to pay the 5% selling fee, does it subtract that from the buy order profit?

Or do you have the money taken from you prior to the money being taken from them?

If it is the first, then I suppose if there were no buy orders you could advertise in LA still and tell people if the want to buy it they need to place a buy order.

Thraxas.6354:

What goes In = What comes Out + Accumulation

As a Chemical Engineer, this post made me nerdgasm.

Solo.9027:

Remembering some of the glaring loopholes in CoH helps me understand some of Anet’s decisions and gives me hope for the long term stability of this game.

If they didn’t kill off pvp on 90% of their servers, it wouldn’t have been needed :P I had plenty of purps in my solo sg though.

Anyways, I was defending the sales tax/bonding with another CoH reject.

Leablo.2651:

You still pay all fees for filling a buy order.

Uh, yeah, but you don’t have to have 5% up front, it’s deducted from the sale. As I mentioned before somewhere else, it also insulates you from dropping prices. You take a price hit for selling something instantly (well, usually), but there are situations where it’s the smart thing to do.

In real life, politicians rob you. So, to make GW2 feels more realistic, you are getting robbed aswell, but by a virtual machine. Isn’t it beautiful?

John Smith.4610:

If you study economics you should have no trouble sitting down and thinking about the problem and coming up with an answer.

Just because the economy is virtual, doesn’t mean it isn’t subject to market failures or other economic constraints. In the case of the answer to this question, virtual economies are much MORE subject to this pressure than regular economies.

So where the tax went? What for? Where is our Lord?! The First of his Name, King of the Tyrians and the First Men, Lord of the Seven Kingdoms and Protector of the Realm? We demand our right! Our justice!!

Solo.9027:

(not really, CoH died from a failed attempt of a game trying to adapt to a changing MMO market among other factors like a tiny user base and zero advertising)

Arguable. Some of the stuff they were finally getting to do would argue otherwise.

There’s a tax on the trading post for exactly the same reason there are federal taxes.

Pandemoniac.4739:

Uh, yeah, but you don’t have to have 5% up front, it’s deducted from the sale.

Wrong. Please test things like this before you post crap.

Ursan.7846:

Thraxas.6354:

What goes In = What comes Out + Accumulation

As a Chemical Engineer, this post made me nerdgasm.

Then as a CE you strongly believe 2+2=5 for very large values of two.

A CE study group I knew back in college (early 1980s) had t-shirts made with that phrase.

Inflation is of concern to economists, of course, but Mr. Smith is probably thinking of taming inflation using the selling tax as a gold sink only as a helpful secondary effect.

By far the most important reason for having a selling tax is that it helps with two major headaches in any large market – market manipulation and high volume margin trading. In other words, there are two methods of making money while playing the market – selling average quantities of goods at high prices and buying them at low prices, or, if you are rich enough, buying and selling insanely high quantities of goods over relatively minor price spans.

To illustrate – if I buy 100 units of item X for 100 gold, and then sell them for 200 gold, in the absence of a selling tax, then i have made a profit of 100 gold at prices of 1 gold per unit for buying and 2 gold per unit for selling. This is our “normal” concept of trading.

In high volume trading, I could make the same profit (100 gold) in the absence of taxes by buying 1000000 units of item X at a price of 1000000 gold and then sell them at a price of 1.0001 gold per unit (i.e. 1 gold 0 silver 1 copper) and make a profit of 1 million units x 0.0001 = 100 gold.

A selling tax makes high volume trading much more difficult and requires a much larger margin (in other words, for a million units, you would need a much larger price change than just 1 copper to make the same profit)

The result of increasing the margin is reduced arbitrage opportunities (the ability for market players to make money simply through their actions in the market without any production/playing the game on their part). It also reduces inequalities in wealth distribution, keeping prices reasonable for more players by ensuring that the incomes of a few players do not skyrocket quickly – taking all prices with them. It also has many other effects, but I just realized how long this post is getting, so I will stop here.

I am sorry you “lost” 57 gold on your transaction, OP, but if you believe that you should be earning more on your transaction, you could always try putting a higher price. If you think that is unreasonable, then you should just think that the profit you received is the “real price” of the item. That is, you are selling it for 287 gold, not 340 gold. You cannot receive 340 because that is just a pre-tax price, not the real price. You say you want direct player-to-player selling, but that leads to gold selling and other bad practices becoming easier. This being said, I agree with you that it is a pity that the tax funds then become a dead-weight loss to both consumer and seller, and I would be interested to see if there are some possible alternative uses for the tax funds by the “government” (Arenanet). On the other hand, in a virtual economy, as many others have stated, gold sinks are needed since expansion of the money supply is unlimited.

Ok, done rambling.

TL;DR John Smith is running things well. As usual. Because, you know, he’s the man and stuff.

fang.9526:

In high volume trading, I could make the same profit (100 gold) in the absence of taxes by buying 1000000 units of item X at a price of 1000000 gold and then sell them at a price of 1.0001 gold per unit (i.e. 1 gold 0 silver 1 copper) and make a profit of 1 million units x 0.0001 = 100 gold.

A selling tax makes high volume trading much more difficult and requires a much larger margin (in other words, for a million units, you would need a much larger price change than just 1 copper to make the same profit)

Exactly what I’m currently doing, with a 20-40% benefit, depening on how long I want to wait. I don’t put much effort in it except for a little bit of clicking though, somebody spending more time on this could probably do way better.

John Smith.4610:

If you study economics you should have no trouble sitting down and thinking about the problem and coming up with an answer.

Just because the economy is virtual, doesn’t mean it isn’t subject to market failures or other economic constraints. In the case of the answer to this question, virtual economies are much MORE subject to this pressure than regular economies.

I strongly disagree. In the real economy taxes are needed, in a virtual they are not. Taxation exists mainly for two reasons: First, to finance public goods such as the basic education system that cannot provided by the market. Second, to internalize externalities such as in the case of tax on fuel to reduce its consumption. None of these market failures are existent in the GuildWars2 economy.
The selling tax is terrible, because coupled with uncertainty it makes market clearance very difficult. Just look at all those items that are listed, but will never get sold. One might even say that inefficiency is a goal or at least a wanted side effect of the selling tax. Lowering the player’s progress to achieve his goals by intentionally preventing market clearance.
Market failures of virtual economies aren’t the best justifications for the tax. In reality efficiency is of great importance, in GuildWars2 ANet wants us to keep playing by artificially limiting efficiency of markets.

FirstBlood.7359:

John Smith.4610:

If you study economics you should have no trouble sitting down and thinking about the problem and coming up with an answer.

Just because the economy is virtual, doesn’t mean it isn’t subject to market failures or other economic constraints. In the case of the answer to this question, virtual economies are much MORE subject to this pressure than regular economies.

I strongly disagree. In the real economy taxes are needed, in a virtual they are not.

Just because they are needed for different reasons, doesn’t mean they aren’t necessary.

FirstBlood.7359:

John Smith.4610:

If you study economics you should have no trouble sitting down and thinking about the problem and coming up with an answer.

Just because the economy is virtual, doesn’t mean it isn’t subject to market failures or other economic constraints. In the case of the answer to this question, virtual economies are much MORE subject to this pressure than regular economies.

I strongly disagree. In the real economy taxes are needed, in a virtual they are not. Taxation exists mainly for two reasons: First, to finance public goods such as the basic education system that cannot provided by the market. Second, to internalize externalities such as in the case of tax on fuel to reduce its consumption. None of these market failures are existent in the GuildWars2 economy.
The selling tax is terrible, because coupled with uncertainty it makes market clearance very difficult. Just look at all those items that are listed, but will never get sold. One might even say that inefficiency is a goal or at least a wanted side effect of the selling tax. Lowering the player’s progress to achieve his goals by intentionally preventing market clearance.
Market failures of virtual economies aren’t the best justifications for the tax. In reality efficiency is of great importance, in GuildWars2 ANet wants us to keep playing by artificially limiting efficiency of markets.

Listing Fees and Selling Fees exist for one reason and one reason only….they’re gold sinks. They’re not taxes…they’re fees. Fees established for doing business using the BLTC.

These fees and gold sinks are in place to help combat inflation in the game…..along with repair fees, WP usage fees, etc.

Without these fees, inflation would have to be combatted in another way. The reason inflation exists is because as people play, the game drops loot for them. Most of this loot has a value in gold (some doesn’t, but that’s beside the point). If loot were to drop at its current rate without gold sinks in place, prices would continue to rise indefinitely until they all reach the same maximum. Not an equilibrium point….a maximum point…..the greatest amount someone can sell something for, which I believe is currently 9999g99s99c.

So, without the gold sinks, the only way to combat inflation is to remove loot from the game by reducing its drop rate. How do you think that would go over?

The listing and selling fees on the Trading Post are necessary evils. I may be wrong, but I believe these are the largest gold sinks in the game based on the sheer volume of trades that happen on a daily basis. I believe they FAR outweigh all of the other gold sinks combined.

I also believe in ArenaNet. I think they’ve done a good job of balancing the amount of loot and the number of gold sinks to keep inflation from running rampant. Prices WILL rise over time….but that’s only because people will begin to gain more wealth just by playing the game. If they didn’t, and their current wealth stayed stagnant, many players would quit playing the game.

Yes….some people get rich by playing the TP….other don’t…..but everyone should be able to increase their personal wealth slowly over time…..as long as they’re not spending their money frivolously.

There are many other ways to control inflation. It’s just a cheap and lazy way to do it via the trading post tax. The purpose of a market is the efficient allocation of goods and the GW2 trading post fails at it, because the tax prevents market clearing.

FirstBlood.7359:

There are many other ways to control inflation. It’s just a cheap and lazy way to do it via the trading post tax. The purpose of a market is the efficient allocation of goods and the GW2 trading post fails at it, because the tax prevents market clearing.

Why is it cheap and lazy? I think it’s quite elegant especially because it scales with inflation, as opposed to flat gold sinks.

FirstBlood.7359:

There are many other ways to control inflation. It’s just a cheap and lazy way to do it via the trading post tax. The purpose of a market is the efficient allocation of goods and the GW2 trading post fails at it, because the tax prevents market clearing.

Since you are opposed to the fees on the Trading Post, please answer the following question.

What system would you suggest that ArenaNet uses that would remove an equal amount of gold from the economy?

I see a lot of complaints about the fees, but never any solutions that would work as well as the current system.

Just pass the costs on to the consumer.

Leablo.2651:

Pandemoniac.4739:

Uh, yeah, but you don’t have to have 5% up front, it’s deducted from the sale.

Wrong. Please test things like this before you post crap.

Well I’m embarrassed. I’m helping a friend with a project they’re working on and I must have got my wires crossed. I’ve been pounded with exchange driven changes this past week and it’s made me quite the scatterbrain (I’m looking at you NASDAQ).

I wonder if that is an intentional part of the design, or a by-product of the UI. It seems unfortunate for the folks who find something really valuable and are too broke to pay the listing fee. The gold is getting removed from the system regardless, why would it matter if it’s on the front end or back end of the deal?

Pandemoniac.4739:

Well I’m embarrassed. I’m helping a friend with a project they’re working on and I must have got my wires crossed. I’ve been pounded with exchange driven changes this past week and it’s made me quite the scatterbrain (I’m looking at you NASDAQ).

I wonder if that is an intentional part of the design, or a by-product of the UI. It seems unfortunate for the folks who find something really valuable and are too broke to pay the listing fee. The gold is getting removed from the system regardless, why would it matter if it’s on the front end or back end of the deal?

Because if you list an item and remove the listing, you still lose the listing fee. I imagine it’s to encourage people to really think carefully about their prices when listing sell orders.

Ursan.7846:

Pandemoniac.4739:

Well I’m embarrassed. I’m helping a friend with a project they’re working on and I must have got my wires crossed. I’ve been pounded with exchange driven changes this past week and it’s made me quite the scatterbrain (I’m looking at you NASDAQ).

I wonder if that is an intentional part of the design, or a by-product of the UI. It seems unfortunate for the folks who find something really valuable and are too broke to pay the listing fee. The gold is getting removed from the system regardless, why would it matter if it’s on the front end or back end of the deal?

Because if you list an item and remove the listing, you still lose the listing fee. I imagine it’s to encourage people to really think carefully about their prices when listing sell orders.

I get that part – the listing fee puts downward pressure on the sale prices, but if you’re filling a buy order, why would you need the listing fee up front instead of just deducting it from the sale?

Pandemoniac.4739:

I get that part – the listing fee puts downward pressure on the sale prices, but if you’re filling a buy order, why would you need the listing fee up front instead of just deducting it from the sale?

When you’re filling a buy order, there is no differentiation between “up front” and “after the fact” since the transaction happens immediately.

Ursan.7846:

Pandemoniac.4739:

I get that part – the listing fee puts downward pressure on the sale prices, but if you’re filling a buy order, why would you need the listing fee up front instead of just deducting it from the sale?

When you’re filling a buy order, there is differentiation between “up front” and “after the fact” since the transaction happens immediately.

I don’t know if that differentiation needs to be in place when filling a buy order though.

If you find something valuable, but don’t have the 5% to list it for sale, you should be able to elect to have 15% taken out of the total sale price by filling the buy order.

It ends up being the same percentage, except it’s 15% applied to the back end when filling a buy order instead of 5% up front and 10% on the back end when placing a sell listing.

Woops. Typo, added in the “no.” Sorry for the misunderstanding.

EDIT: Actually, is there? Like if you have 0 gold, are you unable to fill any buy orders? I can’t test right now, but I’d like to know the answer to this question if anyone will humor me.

Charismatic Harm.9683:

Ursan.7846:

Pandemoniac.4739:

I get that part – the listing fee puts downward pressure on the sale prices, but if you’re filling a buy order, why would you need the listing fee up front instead of just deducting it from the sale?

When you’re filling a buy order, there is differentiation between “up front” and “after the fact” since the transaction happens immediately.

I don’t know if that differentiation needs to be in place when filling a buy order though.

If you find something valuable, but don’t have the 5% to list it for sale, you should be able to elect to have 15% taken out of the total sale price by filling the buy order.

It ends up being the same percentage, except it’s 15% applied to the back end when filling a buy order instead of 5% up front and 10% on the back end when placing a sell listing.

Then what prevents you from listing, pulling, listing again if you could elect to postpone the 5% posting fee until the sale.

This goes back to the arguments about rebating the posting fee if you pull your item (which I oppose).

Hmm, I think the way I asked the question is causing confusion. I did in fact go into game and verify that if you have 0 gold in your inventory, you can not fill a buy order. The listing fee appears in red and the button is disabled.

I’m confused, because if you’re selling an item instantly, I don’t see the need to have to have some cash on hand. The fees are a percentage of the sale price, so you can’t fill a buy order that doesn’t cover the cost of the transaction. Although, I suppose you could fill a buy order for 1C and get nothing in return.

I’m inclined to think it’s a limitation of the UI/code logic and not an intentional part of the design, but I might be missing something.

If what you mean by filling buy orders is placing buy orders, then no. You have to have the required gold on you to place buy orders.

Atroras.9481:

If what you mean by filling buy orders is placing buy orders, then no. You have to have the required gold on you to place buy orders.

When I say filling buy orders, I mean providing the goods to satisfy the buy orders that other players have placed. I hope everyone is on the same page.

Because a picture is worth a thousand words…

Here is a screenshot of me trying to fill a buy order for a major sigil of luck with no money in my inventory. The sell button is disabled because I don’t have 18c for the listing fee.

well if not planning to reduce it maybe it’s better to make it splitted btween both sides in the tradement

i mean as a seller i’ll pay 7.5% and so is the one who’s ging to buy it
that’s going to feel more better when i list the heavy stuff