Expensive orders being undercut by 1 copper (less than 1% of the order value) makes the 5% listing fee act as a punishment for being first to list. It does not encourage cheaper prices or a healthier market.
For those saying that this is how true competition works: Your ignorance is astounding and you need to exit yourself from this conversation.
The simple fix for this is to allow sellers to lower their prices for free. This will prevent micro-cutters from exploiting the 5% listing fee as protection and it will allow other sellers to retaliate by adjusting their orders down. In fact the market will become healthier, as prices on over-valued items will be driven down quickly.
Also, there should be a minimum price difference between orders. Something little as 1% would prevent people from exploiting micro-cutting.
Transaction fee punishes those that doesn’t set their selling price properly. If this is not how competition works, please enlighten me…it sounds like you are the ignorant one.
A simple fix for 1c micro-cutting that would greatly improve the high-end market! Discussions within!
Posted by: Wazabi.1439
Because he can’t compete. Maybe a participation medal?
I undercut you, you use your free adjustment to undercut me, then I use mine to undercut you…still second place. Expiration? Don’t even get me started…
(edited by Wazabi.1439)
eve players are OP on economic PVP…needs nerfing…lol
@poke, convenience. When you’re on the field and loots are dropping so fast, you can either destroy it, or sell it at market. I’ve been in events that dropped items that I have to clear my inventory 3 times just to make space all while fighting
Stock is only 1 factor of supply…the source of supply is loot drops. If stock is cleared, price might move up a little. If the item is useless/near trash, price will drop back down to vendor price. As my post above, goods cluttering can be of 1 reason, the rate of it being generated (supply rate) is much higher than consumption rate (demand), hence it clutters. Even if you remove the stockpile, it doesn’t change the fundamentals of it. If you can’t sell it fast enough at vendor price, you won’t sell it fast enough at a higher price…thus it will drop back down.
I haven’t look at the price of gold for third pt and anet…but it seems that if the difference is small, that should discourage third pt seller because of security and legality issue.
As for price floor, if an item’s equilibrium is below vendor, it’ll just be vendor. The impact is that these item will just stay there and not sell if there are no demand at even vendor price. If the floor is removed, it should drop lower to a price where someone is willing to buy…and if not…to the price that it’s salvaged mats is worth. If it is above vendor, then no issue.
(edited by Wazabi.1439)
If an item posted at vendor +1c is not selling, that’s a pretty strong indication on the actual value of the item. If actual value is higher, people would had bought it.
I think lazrial is just trying to state it in a simple way. Yes, relative wealth is all that matters for comparison. If you’re more efficient, you can spend less time to increase your relative wealth
You guys haven’t even seen the rate in which tier 6 mat node spawns… Increase mat and fine mats drop, crafting will be sooooo easy that more will reach 400 faster. Then you’ll complain about how hard it is to get mat to craft exotic and ask for increase in drop…then you’ll complain rafting legendary is too hard and ask to increase drop. Then you’ll complain legendary has no value because everyone has one.
There are always some aspect of the game that some will find very difficult, and some will just bite through it as a challenge. As someone in this post says, it makes it all the sweeter when you achieves it. The difficulty is to reward players who puts in effort and or ingenuity.
I have no problem with people who don’t like competition…But when they demand change because they can’t handle competition, and did not think of the negative impact that such changes will create…nor did they think about the good things that they enjoy from competition (buying a full level 80 rare set for less than 1g), that I have a problem with. We can try to educate them on the logic of it…but I think it’ll just fall on deaf ears.
Not impossible to make profit crafting…just takes more tact to either sell it at a higher price, or lowering your cost. Buying mats at lower cost is not the only way to reduce cost… Also, I profit from speculating the craft market only because some people is impatient to wait for their crafted goods to sell.
That’s what I’ve been trying to say…many seems to be getting the wrong idea on the impact of floor price in that raising it will magically allow their item to sell for more. You can post it for more, but no one will buy it if the intrinsic value isn’t there.
Is the drop rate bad…or is it just because so many people are crafting right now? I do agree about the butter thing though…but complaining just because you can’t get what you want? They increase the drop rate, price of mats goes down, and even further when most are done with crafting. How are you gonna handle that?
Anything in life rewards creativity, this game is no different. Crafting is already so easy as it is in this game to max. The most efficient way to grind for mats are usually not immediately obvious…most just take the obvious route without spending much time to think about optimizing their action. Of course it’s always easier to just complaint and hope dev will spoon feed you.
I say harder, not impossible. The higher transaction cost and market participants than other games makes it harder to corner the market and move prices. Crafting is broken to those who thinks they can make big money from it…in which that wasn’t what the dev wants, and at least clearly stated in the strategy guide. Even if you don’t know that, it is pretty obvious that you won’t be making money crafting since it is so easy to max hence many people can do it.
It is actually harder to speculate in this game due to the larger market and 15%…
free market ftw!!! I think these mechanism is put in to make stupidity less obvious.
I don’t think the item actually sells even at +1c. I’ve put up a few just to see how it goes…low level item, high level item…but all are trash loot…none sold, and the number of seller increased. If no one wants to buy it at +1c, no one will want it at 15% +1c.
I see nothing wrong about it…if they want to do that for whatever reason, all the better. Just buy and list it up again. The more people doesn’t knows how to trade, the better for those that knows how to trade.
Could be how they are trying to prevent speculation.
As such a lot of the space is now cleaned out, this means less supply of said item up on the TP, which means supply will shift left on the graph and therefore raising the price.
Correct. This here is the key. We both agree on this point. What we differ is that, you believe it will stay there, where I say it will not. Clearing the clutter of existing stock is a shock to the supply, that’s why the supply curve shifts left. Now, 2 thing here I like to point out:
1. Demand curve for trash item is very flat…and supply curve for trash item is steep. Draw it out, and shift supply left. Price doesn’t goes up very much did it?
2. Introducing the dynamics of economics. We’ve only cleared the stock, but not the source of the supply, which is drop. Granted, supply is reduced, people start selling to vendor to clear the clutter. Now, price raise. People will react to this price raise as well. A rational being will sell it through TP now because it is more than vendor…and since the supply rate (how easy the game spawns trash loot) is still the same, and because demand curve is very flat (hence insensitive to price change, low elasticity), price will get push down again, towards the equilibrium price (mat cost price or vendor, whichever higher).
Thus, in the Short Run, you are correct…but when you look at it on the Long Run, it doesn’t change.
@Ziggy
I did not want the price to become anything. I’m merely stating how the price will evolve base on economic theory and fundamentals. You argued that clearing the clutter will make the price higher, I’m clarifying that it will not. If you think I’m wrong, justify it by providing an alternative explanation to what I’ve said on the previous post. Argue on my point…not my intentions….back it with economics theory, and show it with an example.
You earn lower profit selling +1c, you don’t lose money. From that transaction, 15% of the money gets sinked. I can sell all my trash on TP at +1c and assuming it all sells, my wealth will still increase…just not as much as those that sells it to vendor. If it doesn’t sell, they lose the 5% listing fee…but the item can still be taken down to be vendored. How would this affect the future? Weather the clutter clears or not does not determine the supply and demand in the long run…only the actual drop rate and usefulness of the item does.
doyoulol.3524
Hence you need to think about how much you want to price the item you want to sell. Higher profit, higher risk of not selling. It makes perfect sense.
GSSBlunaspike.4153
TP is for people who wants to sell something, and for someone who wants to buy. If you’re trying to sell something that no one wants, problem is not with TP, but with the item. Also, a-net never intended crafting to be profitable…You can also guess by how easy it is to level it to max.
2 millions bought the game, a lot of them improving their crafting skills. Of cause prices for crafted products are ridiculously low while materials are high. That is VERY basic economical knowledge. TP charge is fine as it is, we do not need to “wake up”. With lower charges, daytrading will start. While that is not a bad thing per se, for me it does not feel right in the GW environment.
Looking at all the TP related post, I have 2 conclusion: People lacks fundamental economic knowledge (some with half baked thinks they do due to Dunning Kruger effect), and can’t handle competition.
A person can TP his item, or sell it directly to vendor. Take the example that you guys are arguing about…someone selling a 50c item at 30c. If the item doesn’t get sold to the vendor for whatever reason, no money is generated to the game world. If he vendors it, 50c get added into the economy. If he sells in TP for 30c, 15% of that gets taken out from the economy, but if the person buy it sells to vendor, a total of 50c-(15% of 30c) <50c is created. I think this is what illgot.1056 is trying to illustrate.
Under this scenario, less money is created in the economy…so viewing only on the economy, less money is created than someone selling directly to vendor. Viewing on a wealth distribution point of view however, we have 1 player pocketing a portion of the wealth that was to be the other person if he didn’t TP it and sold directly to vendor instead. So, it’s the smart player profiting form the stupidity of another player…I personally see nothing wrong in that. I believe in darwin’s theory. But since A-net wants to foster a casual environment and a sense of fairness to all players, then so be it…
I’m all in for free market like Eve online. No spoon feeding or hand holding on the market. Players won’t learn until they make some costly mistakes. Game company trying to save players from their own ignorance and stupidity had foster a new generation of gamers that relies on the game design to feed everything to them.
Lets try to bring our arguments back to the point without deviating too much.
You’re assuming that if the clog is cleared via timed posting, people that can’t sell will not repost to TP (coz of listing fee), and would be more profitable to sell to vendor, hence they will sell to vendor, thus reducing supply? Yes you are correct. The reduced supply will increase the price of the item (magnitude of increase is debatable depending on how far apart are the deviation on supply and demand, and elasticity)? You are correct. This is what will happen. What about after that?
Will these people (after the clutter is cleared) still sell at vendor when they realize they can sell for a higher profit at TP now that the price has increased? If that’s a yes, then what will happen to the price? As long as the drop rate/easyness of getting these items in the game remains the same, nothing changes. The clutter could be cleared, but the rate at which the item is generated is still greater than the rate the demand is increasing (if at all). That doesn’t change anything. You’ve cleared the stock, but not the rate at which the item is being supplied to the world, which is the root of the problem.
Look at the recent butter market…Price increase due to a sudden demand surge from the new recipe. The only way for a price of an item to increase (not factoring inflation) is for supply source to decrease, or demand to increase. Tweaking of mechanism is only going to create temporary shocks/adjustments in the short-run.
A game who’s economy have 10000 players and one who has 2 million player is very very different. GW2 is simpler than the real world, but probably more complex than you think.
I think it has been said by the dev that you should not expect to make money out of crafting…they even said it in the strategy guide. You formed the wrong expectation…without sufficient research.
Do you think the 10% sales tax is just to screw with your gold? It’s an inflation control mechanism and deters speculation in the market. Without it, it will be much worse, and won’t change the fact that no one wants to buy your crafted item. What will change that though, is adjustment in drop rate, and also make crafting much harder to level. Who isn’t in their 400? Crafting is so easy to level that everyone is flooding the market with crafted goods (not to mention trash drops).
There is a way to make money form crafted goods. Most people cannot think of creative way to profit from the market or doing business and blame something else for their failure. Seeing that you’re not a very good businessman, I’m gonna give you some pointers here. It’s called outsourcing.
Often, you’ll see that a component of a finished good is cheaper than the cost of the mats it needs to make it. Also, the price of a finished goods is often the cost of mats needed to make it. Do the math. I’m not sure if it still holds, cause I’m pretty sure I’m not the only one who can figure it out…so…go check it out before everyone does.
@Baron,
You proposed system is naive and unrefined. Before you even propose a system, think of not just the good that it will bring, but also the bads. The whole point of TP is for trading, and now you want a system that you can’t trade a certain thing? Normal people won’t be affected….but anyone who wants to trade is. If you can’t think of the repercussion of this proposal, I really don’t have much to say.
As anzenketh.3759 and Dishconnected.8360 has pointed out, the phenomenon you are seeing are not due to speculation. The premise that you’ve build your whole argument is invalid. From your statements, it is obvious that you do not understand how the market works, and these good people are filling in the information for your benefit. Heck, you can’t even tell if the price increase now is due to scalping or demand.
I would think scalping is possible at a great risk. They can move the market, but due to the volume of trade from 2 million other people, they have only a very small window to make their profit before the market corrects itself. This is very hard to do and requires a huge amount of capital.
What Dishconnected.8360 propose, now that’s a proposal. Still, the people that benefits the most are traders that understands how the market works with or without that information.
I think I know what event you’re talking about. Does it involves centaur?
Money supply won’t inflate cost of items IF AND ONLY IF player population increases proportionately.
Tell that to the Germans.
If money supply doubles, that money’s worth becomes halved. If a loaf of bread cost $1, then after the money supply doubled, it would now cost $2 because it would take twice as much to pay for it since the money value has been halved. Essentially you are still paying the same amount of money though, so it’s not making much of a difference. Another example would be how much goods cost back in the 50’s as compared to now.
The prices of goods need to match the rate of inflation. Otherwise, if the prices stays pegged to the vendor price, then in the future as money supply increases people will have tons and tons of gold, but everything will be the cheap cost of the vendor price. This is why the market price equilibrium should be determined by what a products value is currently worth in the market. If you can place things up in the TP forever, as it clutters those products prices will forever be stuck in the past, then if you want to post up an item you’ll have to compete with the prices of the past which are stuck in the future and thus you will put up that item for sale at the price that it is stuck at.
i say this because the player population will not increase proportionally. it will be a fast increase when a game releases, and will then flatten out from there.
Zig, you need to think deeper. Things you read from news paper or some other sources overly simplifies a lot of things, that might be why you’re getting incomplete idea. Many of the things you say is not unfounded or wrong…just incomplete. You often look at how 1 variable (Y) changes by changing another variable (X1) assuming the other variables (X2) affecting it stays constant. In that sense, you’re correct…but often changes in X1 affects X2 as well, and you didn’t take that into consideration.
Inflation is a complex mechanism, people spend years just to learn and understand all the factors. If money increase by 10%, but population increase by 10%, production increases as well. Assuming production increases proportionately by 10% in a simple economy, then there won’t be an inflation.
The cost of an item is not pegged to anything. If an item is pegged at +1c, and cluttering, it means the item is not selling fast enough…that means not enough people demands it even at +1c. If there isn’t any vendor price (vendor don’t buy it), it would go even lower. Using whatever mechanism to remove them from the market or even encourage them to sell it at vendor (to remove the clutter) won’t change things much. If anyone is willing to buy the item above vendor price, then they are going to realize it and start selling in the TP again to push the price down.
I’m gonna have to ask you to trust me on this, this is what I do. If you’re still in college and have access to an economics professor, run it through with him, I believe he can provide with a better explanation in person.
They don’t seems to realize they paid zero coins for the loot in the first place…so how is selling cheaper losing money? If I value convenience for the loss in profit, then so be it.
I personally don’t agree on dev messing with the market, but either way, doesn’t affect me. Market changes, and you’ll just have to adapt to it like life. Sometimes its to your advantage, sometimes not, so I’ll just deal with it. I think the real problem is jealousy.
How do you know the price increase is due to people cornering the market and not demand raising? You do know the market have 2 million participants right? They can move the market for a while, but not for too long, and not without taking a great risk. Do you know dev just released a recipe to drain butter out of the market because the are too many of them? The information is available to all at the same time… You fail to extract value out from the info or too late…that’s your problem. Your own failure to play the market is your own problem. People spend time to devise trading strategy to make money off the market and taking risk. Maybe you can learn something from warren buffet instead of demanding changes to suit you.
hence many…not all.
When there’s more demand than supply, it’ll be open to speculation. It is harder to speculate in GW2 due to the 15% cost to sell and huge market. Speculators take on a risk for hording. Try timing your buy, or farming for mats and sell when it’s expansive. It’s normal.
You seem antagonistic against those guys… does that bother or affect you in any way?
I tried WvW for the first time….don’t think it’s too hard to not die….
It is hard if you’re completely braindead. WvW is mostly filled with braindead people so I can see why there are complains for that aspect of WvW.
Much like many that whines about things being broken when it is they who failed to master it.
Well…sometimes when people don’t understand things…especially when they are too stubborn to admit they are wrong…or they lack the foundation and overly simplify complex stuffs…they tend to think others that don’t share their point of view are stupid.
I find that a lot of things in GW2 market may seem stupid at first…but there is actually a very good reason why its the way it is.
I just sold about 40 different items in the last hour and made around 6 gold… in the last hour.
The TP works, but like most MMOs the majority of loot is trash. The issue is not with the TP or how it functions, it is an issue that most crafted and generated items are useless.
BINGO. I personally never find the need to buy items from anyone…leveling happens to fast…it’s just not efficient to keep replacing your gear…only crafted staffs since I’m an artificer.
People is willing to pay more than 10c an item they can’t make or get themselves, correct. For the trouble or what-so-ever. Lets start with trash loot. You didn’t pay anything to make it. Any amount you can sell it for is pure profit for your time. Someone might want that item, and might be willing to pay more than 10c for that. But at the rate things are dropping, and all the alternatives available, that item’s value diminishes. Why would I want to pay you 15c for the item when an alternate item cost less but fulfills a similar function, or when I know that many other sellers are willing to sell it for less? This will happen with or without any control mechanism. Only factor that will increase the price is a reduced drop rate, or a reduced amount of crafters that can craft similar items. In GW2 anyone can loot a corpse, this generate a huge amount of loots. Take that away, you’ll have a market that you’re familiar with.
Now move on to crafted goods. They are competing with trash loots. Same reason why their prices are low unless it’s something very rare (not the rare definition of the game).
Money supply inflates the cost of all item. If you earn 100 now, and you are willing to spend 10% on an item. When you earn 1000, you’ll be willing to spend more, not necessarily 10%, but lets say it is for ease of comparison. You’ll be willing to pay more than 10 for the item now if there are competition. Money supply won’t inflate cost of items IF AND ONLY IF player population increases proportionately.
On the supply backlog…if there’s a backlog on trash loot cluttering the market even at +1c, isn’t that enough evidence that no one wants it? If there’s really a demand for it, it would had cleared the market and there won’t be a backlog at the first place.
In real world, the cost of making an item say, food, is more complicated. In game, you only need to spend time to get an item (drop), and there’s a vendor with unlimited supply of money to buy your item at a fix price. That’s risk free…you’re guarenteed to be able to sell at that price. In real world, it takes time, learning how to cook, overhead on cookware and utilities, risk of not able to sell (that means zero revenue), advertisement and such. You could end up with a negative profit, since there’s a risk, it commands a premium above cost else no one would do it. That’s not the case in game.
That means spending resources to develop a system that is used 1% of the time?
Putting on TP doesn’t guarantee a sell, that’s why there’s also a buy order. It doesn’t guarantee a buy either. Difference is, if people wants to buy/sell something, they can still go to the TP and put up a price that they think they will pay/be paid for. Thanks to undercutting, I can buy cheap stuffs.
Say an item sells for 1g in TP. You won’t be able to sell yours via P2P by more than that (unless you con him). If you’re willing to sell at a cheaper price, might as well undercut it in TP. The only thing difference of P2P is the hassle of advertising your sale, and saving the 15% selling cost. It P2P is costless, then a gold sink mechanism form TP is avoided provided you think the 15% savings is worth your trouble to sell it manualy. If it is implemented, it’s not worth the trouble going P2P.
@nuprin
my apologies. Didn’t know about the John Smith thing until you said so. I believe a market should not be tampered with, and they should just let it correct itself…not artificially and benefiting only a segment of the population.
Also there’s NO WAY direct trading option would have any impact on the global economy.
Yes there is actually. TP is a form of gold sink to control inflation. Adding P2P without cost diminishes the inflation control mechanism. Adding a cost to P2P makes it no difference than TP.
If someone wants to sell a very rare or buy a very rare item, they can post it on TP with no risk of scam, and get done with it. Everyone can see it, and anyone can fill that order even when you’re offline. The alternative in P2P is you’ll have to advertise your intention with WTB/WTS in chat actively. TP seems more efficient and easy.
Not exactly…what I’m saying is that equilibrium is at the lowest possible price, which is cost. But since we have an artificial floor price which is for now higher than cost, thus it is the equilibrium.
The intrinsic cost of an item is just the materials it is made of in the game. If you can salvage a trash item for 10c worth of mats, then the cost of the it is 10c (slightly different for crafted items). Off course, it the finished goods are in higher demand than the supply, the clearing price will be higher. But if the supply is greater or that there’s simply no demand, it will converge to 10c. No one will sell it below 10c because they are better off salvaging and sell the mats. No one will pay more than 10c for it because there is little to no demand for the trash loot, and plenty of supply and substitution.
When the currency inflates, mat price will inflate. on a 10% inflation, say mat price inflates by that much, then so will the equilibrium price of the trash loot….to 11c.
In our case where there’s a price floor, the only reason the price of the trash will increase above the vendor price is when the cost of mats it is salvageable is more than vendor price. Remember, this is not a price ceiling, it’s a price floor. Another way for trash loot to increase above vendor price is that if there are people in the market willing to pay more than that, and there’s an insufficient supply. Excess supply will result in undercutting because it is more beneficial to sell at above vendor price, which will then depress the price to equilibrium.
I’m on Master’s of economics. Nice to see a fellow economist.
That’s exactly the beauty of perfect competition in a large market like TP…for things where there’s an excess amount of supply, there’s no room for speculative profits. This market is designed so that it is hard for even a group of people to corner the market/move the market. They can move it, but the duration will be very short until the market corrects itself to the natural value at that point of time (that value is in a flux). I’m all in for speculating…that’s what I do in every MMO….I can tell you this one, you’ll need to do your homework. Do it on items where demand > supply. It’s easier to make speculative profits on those.
BACON!!!!
/15char……..
If you’re transferring items between friends, mail will suffice. It you’re trying to make a transaction, TP is more efficient.
I believe putting in P2P is a waste of developer’s time as it will only be utilized by a subset of players who think they can make more money outside of TP, then realize nothing has changed, then revert back to TP.
some explanations here in respond to your post:
https://forum-en.gw2archive.eu/forum/game/bltc/GW2-economics-for-dummies/first#post110902
But I’m gonna go more technical on this since you ask.
The supply demand curve you’re describing is a very simplified version to help students understand the relationship. Different goods have a different function, resulting in a different curve. When price elasticity is taken into account, the steepness of the curve’s slope will be different. What I’m saying is that the demand curve is a lot flatter horizontally. It is so flat due to the huge number of drops, and perfect substitution (alternatives) to that item.
To put it in an example, suppose a market demands 10unit of item A. The supply is 1000 unit, so price gets pressed down. Your argument is that by reducing the supply to 100, price would increase, that’s correct. However, market still demands only 10. If selling item A in TP generates more value than to vendor, then players will still sell in TP, pushing the price down to the vendor level, in which they are indifferent into selling in TP or vendor. Note that item B serves a similar purpose…so you’re not only competing to sell item A against other item A seller, but also item B. Add to the fact that gears marginally improves your performance, and leveling time is not exponential, that again reduces the reliance on low level gear that drops like flies. That’s why you have a flat demand curve for trash loots.
If you want to make money in TP, play the crafting materials, lv80 exotics, or anything that people are having trouble finding, and just drop your trash to vendor.
the supply is determined by how many trash the game spawns from loot. It can stay in a person’s bank, pack, or cluttering the TP. If a person is not using it or destroying it, then it is available to be sold, hence available as a supply. Removing the clutter shifts this item back to a person’s pack/bank, and remove it’s visibility from the market, but it doesn’t removes it from the supply pool.
I can see where you’re coming from. More people will sell trash to vendor so less supply in the market right? So price should go up? But what if the demand for such item is so low that even if the supply is being taken out of the market supply there is still excess supply? Trash loot are so easily obtained that’s why there’s little to no demand to it. This is an artificial equilibrium because of vendor price…if there aren’t any vendor for you to sell to and no price floor, then these item will sell at the value of mats you can salvage from.
In sum, you’re arguing that the equilibrium price for trash gear is above vendor +1c, while I’m saying that equilibrium is at lowest possible price depending on mechanism. You sounded like you have some knowledge in economics, so you should have a textbook around somewhere. Flip open the chapter on perfect competition, that should provide a more comprehensive explanation on my arguments.
You need to consider both the supply side and the demand side to determine the price. Our economy for trash loot is pretty much at a natural state now.
I would like to know as I’m recording the prices myself everyday.