Market ideas, and how to fix it.

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Originally Posted by Xystic

There is no realistic value. I don't know where you are getting that from.

If there are 5 people in one market and there are only 2 customers who are going to buy 20 pieces/week:

stuff

On the market board and we know that the cutoff price for profit is at say 40 gil.


stuff

Now C doesn't have to worry at all because he doesn't need to relist, hes making money period and now controls the market. Everyone above him is boned because if they had to relist with a 5% fee, they would be losing gil. We've seen this situation 1 too many times.

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A realistic value, is a price at which an items could reasonably be expected to sell at.

Lets look at your example then.

For your example, you state the DEMAND for the item is 2 buyers, at 20 pieces each, per week.

This means demand is 40/week.

You have suggested in this market, there are 5 sellers, with a total SUPPLY of 136 items.

This means that supply is more than triple demand.

As a side note, you said the minimum sales price for a profit in this market is 40g.

Knowing that the market is flooded with items, any price above 40g is unrealistic.

Seller A and B have far over priced their items and deserve to be 'boned'.

Seller C has a large overstock of the item, and can control the market price. He would be better off listing all his items at 40, and try to move his surplus.

Seller D's prices are a little above what the market supports, but should demand spike, his items should sell as well.

Seller E is at a reasonable price point, but lacks the surplus of seller C, so he will likely have to wait him out, or undercut below the profit margin to move his wares.

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Originally Posted by Chauve

1. Taxes - There is not currently a meaningful, immediate charge. There's no point in having a separate listing and selling fee when in actuality it's just put into one. There is a reason for having a listing and a buying fee, and it's sole purpose is to stabilize. Not a difficult concept to understand.

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Currently items are taxed upon the sale. If taxes were changed to being immediate upon listing, i can guarantee you 100% that the total amount of tax overall in the game will increase. By doing so you also increase the dead weight loss of the market, which means the market is operating less efficiently and it will not be able to reflect prices dictated by supply/demand or changes in supply/demand as fast and accurately. Because of this you'll actually create the opposite of what you are attempting to do. What will happen is the market supply/demands can not correct each other as fast or easily to any changes and you'll end up causing price to have larger price gaps between them. A slower market is a bad thing because there are more and larger price discrepancies.

Also it will not be possible to place a tax on when an item was posted, and here's why:
let me just place something that's actually worth 10k gil for only 100 gil, get a 5gil tax and then immediately readjust my price up to 10k.
Now instead of paying a 500gil tax i only paid 5gil in taxes and avoided the other 495gil.

In order to avoid this situation, in addition to a tax on listing, you must also either have one of the following:
-A tax on price adjustments as well
-A cooldown on price adjustments per item
-Not allow you to adjust prices at all, so you must take it down then relist it and pay the listing tax again.

These are all bad for the market and will increase dead weight loss, make it lose effeciency, become slow so it can't properly reflect actual supply and demand as it will be caught in the past, and create larger price gaps.

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Originally Posted by Chauve

2. Undercutting - I'm not here to bitch about all the players that undercut. Undercutting doesn't ruin a market, but price changes on a whim do. You'll find undercutting everywhere. The only thing that means is that your listings take slightly longer to sell. You're still getting more money. Allow undercutting, but don't encourage it by not having a listing fee, as I've mentioned above.

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A listing fee is a terrible idea for the above reason I just gave. If you can't compete with the ever changing market trends then sorry but that's competition for you.
Also, I'll let you on a little hint. If your idea was still imposed, you'll still be undercut by people currently entering the market and their are no barriers to enter the market. People will still undercut you just as often, all the people just listing items for the first time. So guess what happens, you still end up being undercutted, no one will end up being from you because they're buying from the undercutters who just posted their listing, and you can't adequately compete with them cause your stuff is already posted and you'll have to pay extra or wait longer to undercut them in response. So basically you just shot yourself in the foot.

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Originally Posted by Chauve

3. Supply and Demand - As it is now, there is no way to place orders and the only way to test for demand is to find a slightly empty market, take a look at the recent history, throw some things up for a price on the higher end (or sometimes slightly higher than the lowest, depending on supply) and hope it sells in a reasonable time. Ability to place buy orders would help know what the majority is willing to pay.

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You can also check the history, not many people seem to know there's an option to look at the previous history of bought items. If you see a lot of people are buying something at a certain price, or if not many people are buying another thing, that also gives you an idea into what the demand looks like.
Although I'm all for placing buy orders, I think it'd be a nice function to have, and it's more accurate to look at demand that way then checking the history. But just keep in mind you can still get a picture of what it looks like still.

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Originally Posted by Chauve

4. Quantities! - A suggestion would be to create a "pool" with all the items currently listed, separated only by HQ/NQ. Let's say you want to purchase a stack of something, but there are different quantities listed at different prices. Simply show a list of the 8-10 lowest prices. You should be able to still order 99, but when you place an order have a system that calculates the cost incorporating ALL of the prices within the first 99 items listed at the lowest prices.

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I would like it if they placed NQ on one side and HQ on the other side. It'd just make the lists look so much more organize than having to scroll down to find HQ stuff or opening another box to tick a box to show only HQ.

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Originally Posted by Chauve

5. Selling/Buying options - With the above system in place, you should not be able to place orders for an item that is lower than the NPC buyback price. Likewise, you can't sell for lower than that either.

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Essentially what you'll be doing is setting a price floor below (for most items) or at equilibrium (for some items) which would be redundant. So in the end this would make literally no difference, and nothing will change by it. SE can do it if they want, but it's not going to have any real effect on the market.

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Originally Posted by Chauve

This creates an auction system in which you can place buy orders, fill existing orders, and sell your items efficiently. Yes, it's a "playable" market that people can sit there and make money just by flipping items for minutes a day. But it also gives you a better idea of what the actual demand of an item is, and you can farm/craft accordingly. Playable or not, it's a lot more stable than what exists now.

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I like the idea of placing buy orders but that's just about it.
The idea on taxes would actually make the market less stable.

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Originally Posted by Kazamoto

An initial listing fee, which is the standard of many MMO's reduces undercutting two ways.
First, it prevents people from knee-jerk undercut spirals that are caused by person A selling something, person B posting at a lower price, then person adjusting under that new price, then person B adjusting even lower.

Second, it motivates sellers to price items at realistic levels that more accurately reflect the demand for their wares. If demand were sufficient for their goods, people would be bought out before other sellers could notice the downward trend.

This means a 'casual' could check the price history for his/her items, then see the prices of items currently available, then put his goods up for a price they know would be met within a reasonable amount of time.

As you mention the people being 'boned', this happens because everyone can adjust their prices williy nilly without allowing them to settle.

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As I mentioned previously, it's a terrible idea to have a tax on posting. also, what's considered a realistic level price, who decides that? Also, please explain to me how a slowed market with larger price gaps is considered a more accurate market.

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Originally Posted by Orophin

I think an initial listing fee would keep people from listing stuff at or less the prices that an NPC would buy an item for. It might also make people think before what they list an item for.

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Okay, let me just place something that's actually worth 10k gil for only 100 gil, get a 5gil tax and then immediately readjust my price up to 10k.
Now instead of paying a 500gil tax i only paid 5gil in taxes and avoided the other 495gil.
If you're going to place a tax on posting, then the game will have to either force you to pay a tax per price adjustment or not allow you to adjust price or place a cooldown on price adjustments.


The only one here who gets it is Xystic.
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Also for those who don't know, you can bypass the 1000 character limit by copy/pasting what you typed and then posting, then editting your post. the post edit will let you exceed the limit.

@Zigkid3

You seemed to miss my last post.

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A realistic value, is a price at which an items could reasonably be expected to sell at.

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And as highlighted in my breakdown of this example, a reasonable, or realistic price is driven by supply and demand, your two old friends.

And we have had this debate a number of times. And yes, you seem to have a clever work around there. But as was acknowledged in a number of other threads, there would be an additional, smaller, fee for price adjustments, or the same fee to match the new price.

For the sake of a new angle on this argument.

How often do you see people use the price adjustment feature to move their prices up?

Assuming market forces work as they rightfully should, there should be situations where it would make sense for a seller to increase his prices.

I know it would likely never happen, but if a dev were to give us the total number of times a person adjusted their asking price UP, I seriously doubt that would be a very large number.


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Additional side note.

WoW
LoTRO
EQ
Rift
DDO (<- Free to play even)
EvE (<- Best virtual economy in existence at this point)
City of Heros
FFXI

All these games charge the 'tax' or fee when the item is listed, not when it is sold, yet all have fully functional market places. Funny how that works.

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Originally Posted by Kazamoto

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So in your definition your saying that their is a restriction on labor cost. If anything is higher then so much above the cost to make the item, it is considered unrealistic. However, that idea in itself is unrealistic. You are trying to put a set value for labor cost, which cannot be done. The cost of labor is also determined by supply and demand and the seller, therefore you can not have a set number that says this is what is consider realistic. That is a strange idea and concept. Neat but no.

Because your concept can't exist, you can't prevent the casuals from getting locked up by "C" because how do they know what the value for labor is? Versus a non-initial fee, everyone can atleast repost at 40 gil and have a chance to make 1 gil in return. The current system still protects the casuals from being blocked out of the economy while a initial fee system guarantees the death of casuals.

So you're saying people flooding the market with crafted stuff less than what an NPC would buy it for is realistic?

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Originally Posted by Kazamoto

@Zigkid3

You seemed to miss my last post.


And as highlighted in my breakdown of this example, a reasonable, or realistic price is driven by supply and demand, your two old friends.

And we have had this debate a number of times. And yes, you seem to have a clever work around there. But as was acknowledged in a number of other threads, there would be an additional, smaller, fee for price adjustments, or the same fee to match the new price.

For the sake of a new angle on this argument.

How often do you see people use the price adjustment feature to move their prices up?

Assuming market forces work as they rightfully should, there should be situations where it would make sense for a seller to increase his prices.

I know it would likely never happen, but if a dev were to give us the total number of times a person adjusted their asking price UP, I seriously doubt that would be a very large number.

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we must've posted around similar times.

as for adjusting prices up. I've done it a couple times, and I'm sure people do it sometimes as well. Of course most of the time most price adjustments will be to decrease the price. because to adjust price up would mean say you have the cheapest item on the board right now cause you're undercutting, but a buyer buys stuff in the middle of the list rather than the cheapest for some reason (maybe the quantity amount or for HQ stuff). So it does happen, though not as often.

What drives the prices is if say someone bought out most of the cheaper end goods, the higher up the list they go, the higher the price. by buying up all of the cheaper stuff on the bottom they're driving prices back up because they have increased demand for that item.
higher demand = higher price
lower demand = lower price
higher supply = lower price
lower supply = higher price

supply/demand determine the price, not the price adjustments. when people adjust the prices, they are merely reflecting the price determined by supply/demand.

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Originally Posted by Orophin

So you're saying people flooding the market with crafted stuff less than what an NPC would buy it for is realistic?

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And why are you not taking advantage of this? If its less then the value of the NPC vendor price, you can buy it all out and make the profit from it, even if you just vendor it.

So your complaining because you can make some gil or is it that its undercutting your market so badly, your items are worth nothing?

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Originally Posted by Orophin

So you're saying people flooding the market with crafted stuff less than what an NPC would buy it for is realistic?

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if people sell anything at or even less then what the vendor will give for it on the market board, then they must have a real lack of brain cells.

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Originally Posted by Zigkid3

A listing fee is a terrible idea for the above reason I just gave. If you can't compete with the ever changing market trends then sorry but that's competition for you.

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As you quoted in your post, but may have not read or not understood...

I could care less about undercutters. I list around middle anyway. There's no point in listing below the lowest price when those are going to sell almost immediately.

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Originally Posted by Zigkid3

Also it will not be possible to place a tax on when an item was posted, and here's why:
let me just place something that's actually worth 10k gil for only 100 gil, get a 5gil tax and then immediately readjust my price up to 10k.

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I thought I had posted it here, but I guess that was in a different discussion. The idea is to force you to relist an item, as done in many other auctions in MMOs. I'm comparing it the system used in many other games. (tax/relist)

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Originally Posted by Xystic

#3. You contradict yourself. You state there is no way to know what the supply and demand is but then you state the recent transactions history list. That alone is plenty. If used and studied properly it is already too dangerous.

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Gold sink, yes. But it still stabilizes prices and discourages sporadic changes in price. I also don't believe it would hurt people that are complaining about it, or casuals. If you're early on in the game and don't have a lot of gil, you're going to be selling cheap items anyway. As you progress, it evens out if you're managing properly.

Secondly, I don't believe I contradicted myself. I specifically said there was no way to place buy orders to test demand. Buy history does not accurately represent demand, and yes it is dangerous. The buy history shouldn't even be there. That alone is going to cause long term problems. Reread my post--you misread this the first time.