Thread: Things to address in 2.0: Open Descending Price Auction will not work

I don't have much to say about your post except this part...

Originally Posted by lucas_b

Alternatively, increase the prices for selling items to NPC's so crafters have a way out.

...to which I respond with a big fat no, no, no, no, no, no, no, no, nooooooooooo. This creates money out of thin-air. The more money in circulation, the less money is worth--textbook inflation.

It is my opinion that the core problem is that the supply of raw materials far outstrips the need and no manner of market finagling will fix the issue, but I can't think of any solutions for them to correct that problem.

What you describe is exactly how markets work in plenty of games with functional auction houses or other selling mechanisms. The reality is that if there are more suppliers then people that want to buy items prices should drop until some of the sellers leave the market because it is not worth their time. Making it so that the markets hides the value just means it'll take longer to get to the point you are already talking about. As long as there are more items then people that need them some will not sell and the price will get dropped. It might just take a few extra weeks. Ideas like materia as well as good consumable items are ways for items to leave the marketplace.

If they make adjustments in 2.0 so that items are generated and used in more similar rates this will help with the problem and undercutting will be a viable tactic for selling your items faster but not necessarily to get the maximum value out of them long term.

How about you make a FFXIV Crafters Union Linkshell ...? when a new small guy comes and trys destroying ur target prices with 5-6 stacks u destroy him for the next 2 days by all droping the item price down 70% less than its material Price " all agreeing afcourse " togather united .. when hes gone or vendored using npcs get the price back up ...
remember crafting is a smart peoples game ... dont craft somthing u might loss ... take ur time ... craft smart .. craft smart ... craft somthing sellble uncontrolble ... i wouldnt go into the Utsumi:ichi Raw materials bussnis ur gona get ur self killed i remmber thos guys they dont care if price drops they put 20-30 stacks using mules as well..

Isn't this illegal in most countries?

Not to mention mean?

Underlying problem needs to be address: Excessive and easy to obtain raw materials that have no value when crafted.

Most obvious and illogical example:
Oak Wood = 2,000 gil
Oak Lumber = 800gil

The only thing oak wood can become is oak lumber. So the minute you use your wood, you've lost money. As a Botanist/Carpenter, I chop up oak wood, sell it, then buy oak lumber. Saves me time and money, but is illogical ^.^;

Thank you for pointing that out. I had not noticed it was also used directly in a cane.

Originally Posted by lucas_b

Some might say hey this is just a natural way for the market to find its equilibrium, but as a crafter I think this system favors the buyers too much.

I am one of these people, and I think I can help you understand why. Your distinction between buyers and sellers is something that simply does not exist. Everyone is a buyer, or what economists usually call consumers. Everyone produces and becomes a seller in order to consume more. Acquiring gil or money is not an end, it is only a means to an end - consumption. The real value of your currency is determined by the amount of things you can consume with it. If you want prices to be higher so you can acquire more gil, then, undoubtedly, you will not be able to buy much more with the extra gil you are acquiring through production. By working to increase profits of the producers, you invariably reduce the worth of the gil you earn and your real wealth.

Originally Posted by lucas_b

1) Say you have 7-8 crafters providing a single item where there are more sellers than buyers. Some of them are bound to be impatient sellers, they will keep undercutting and kill everyone's profit. With open descending prices, the price will fluctuate so much overnight.

These 7-8 crafters role in the economy is to fulfill a need or want of the consumers. Excess supply means that consumers, willing and able to buy the items at that price, no longer need or want that item. Simply producing more at the same price and expecting profit is absurd. The only way to sell those items is to create more demand or reach more people that need or want it, but are unable to purchase at that price. The only thing the producer of the item can do is lower the price to reach a broader market. Only the developers can create more demand for the items by altering systems in the game itself, such as implementing the materia system.

Another key concept is competition. Because you are not the only producer in the market, you must operate simultaneously with others. When supply exceeds demand, each individual producer makes a decision of the value of their labor and will decide accordingly to either lower their prices, shift production, or drop out of the market.

Typically the more effecient producers retain their profits at lower prices; and, because they are more effecient, they are rewarded with the business of consumers. In doing so, the economy is capable of having the most effecient production and providing the most goods and services at the lowest price.

Originally Posted by lucas_b

This whole stagnation is caused by open descending offering prices. The ward system benefits the most recent supplier solely, it makes the economy really volatile, unfair and it shouldn't be that way.

Where you see stagnation, I see satisfaction. Try to imagine the FFXIV market as if it were real life. Everyone's needs or wants are essentially satisfied for the large part, so the only work to be done is in satisfying the needs of a very small sector of the market. If this were real life, we would all be happy and free to do whatever we wanted every day.

That said, your attribution of the 'stagnation' being caused by the pricing system is not entirely accurate either. Causes in economics are typically VERY basic and always being limited to just a few things. When you step away from these very basic causes, you lose sight of the whole thing.

What's causing the current state of the economy is LACK OF DEMAND. There are no consumers who want the goods and services that are available. And there are many different reasons and solutions for this, but addressing the price system is not one of them.