Fixing the Markets. As much our problem as SE's .

This is just how an economy is. You sell at equilibrium price where demand meets supply. With products that don't have much uniqueness between them, you have to sell at the price which the market dictates.

The economy in FFXIV is a free-market economy, meaning that it is solely dependent on us. Too many sellers for one thing lowers price. It's as simple as that. But as more people make losses, sellers will eventually remove themselves from the market. Supply of these items will fall. In turn, the items' prices will rise, promising profit to the few people that are left.

As such, it would be good to diversify what you sell to cover losses. Are you only selling boar hides? Well, sell some materia too while you're at it.

There will always be items that sell for less than what they're worth. Supply and demand will correct it naturally. People will both suffer and gain. That's just how it is. FFXIV's economy simulates real life.

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Originally Posted by Haibel

What is Wrong with the Markets

Every time you list an item lower then the lowest priced full stack, it is you that is a part of the problem...

All this is well and fine but if the market price is higher then this you wouldn't be listing that low but it gives you an idea of how low the price could be undercut before the seller is losing gil.

What can SE do to help the problem? First thing would be no default price. lazy people ruin markets quicker then anything else.

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First of all, it is basic economics... you should have learned this in high school. If someone dumps stuff on the market for a perceived loss, nothing is to stop you from picking it up and re-listing it. If someone is willing to let something go for free, then that is their deal.

Second... seriously, learn then vs. than. It is really hard to take someone seriously when they show such a disregard for proper grammar.

imo economy is working as intended. You can make a lot of money if you make the right business decisions, but you can also lose a lot of you do otherwise.

I get that not everyone in the whole world can do business. I study economics and I still feel stupid when I'm trying to sell stuff in FFXIV lol.

I'm pretty sure this is why a lot of people are complaining about FFXIV's economy, because they can't get money through simpler means like farming monsters (the equivalent to working an office job under a salary). Square Enix could raise the amount of money that FATEs and leves give, but this is arguably dangerous as it could cause a rapid inflation.

For those people, your best option would be to learn what materials are worth collecting (off monsters or through gathering). Sell them on the market board, and this shouldn't be too different from earning money from killing monsters.

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Originally Posted by Haibel

Snip for Length

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You know I have to admit, when 2.0 came a swinging her doors open to us, the last thing i expected was not being able to choose the quantity you want to buy off the AH.

In a sense while the game has moved forward drastically, the inability to select how much of an item you wish to buy off the AH, has actually digressed the market.

Seems while most things took a step forward the market took a step back.

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Originally Posted by Nedhitis

Well... It clearly failed to do so, then. It cannot be called a "controlled flow of resources" when resources are not flowing at all due to overpricing/big stack selling. I still laugh from seeing Diremite Webs, Dew Threads, Undyed Velveteens and, worst of all, food items getting slowly cramped on the market due to these logistics. Even funnier: people seem to think that the items will flow if they sell them on even bigger stacks at even bigger prices. Videogame logic.

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Did you wiki the word "logistics" and type the first sentence that came up?

Example of how logistics affects economics:
Buying a 6-pack five times costs more than buying a 32-pack.

The reason why 5x 6-packs costs more than a 32 pack is due to 2 reasons:
1.) inventory space
2.) most people only want what they need

You sell more for less to make room for more inventory.
You sell less for more because people don't need the surplus.

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Originally Posted by Ruminate

Because the change simulates something that occurs in real world economics: logistics

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I don't think that word means what you think it means. At the very least you have an over thought view of it. At least in the two posts
you have made so far you seem to think that SE wants us to sell even at a loss in some sort of inventory management game. This is further
from the truth. There wouldn't be a Tax on the markets if this was the case. it's in the best interest of the economy to not crash so more gil
gets siphoned out through taxes. Your notion leads to the point that Vendoring is the better option and that injects more gil into the economy.
this intern deflates currency and inflates prices. IE 500k titan runs that SE has no control over.

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Originally Posted by Ruminate

Did you wiki the word "logistics" and type the first sentence that came up?

Example of how logistics affects economics:
Buying a 6-pack five times costs more than buying a 32-pack.

The reason why 5x 6-packs costs more than a 32 pack is due to 2 reasons:
1.) inventory space
2.) most people only want what they need

You sell more for less to make room for more inventory.
You sell less for more because people don't need the surplus.

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Thanks for providing that, your talking about Pricing strategies. Logistics plays a part in that
but isn't the sole driver. Your really just talking about marketing.

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Originally Posted by RahlZul

Most Businesses Fail in their first year

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But not because they're choosing to sell their wares for half of what it cost them to make them. That's a different issue entirely (I.E. 'Murica), so I don't even know why you'd bring it up. It's not even related to the topic at hand.

Undercutting is obviously going to happen, but people take it to the extreme. You only need to undercut by 1 gil to get your item to sell faster than the next guy, not 1k, not 5k, not 10k, etc. If something sells steady for 10k, and costs 9k to make, you don't come in and put 20 up for 2k, but that's what people do. You'd think the items would sell fast and the prices would go back up, but sometimes they don't. Sometimes, everyone else undercuts the already unprofitable undercut price, and it just stays there.

Some people might say "well I farmed the mats, so it was free to make!" in which case they could have just sold the materials for double/triple the profits, and likely for faster.

It's more like unwanted things are cheap and desired things are too expensive.

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Originally Posted by Haibel

I don't think that word means what you think it means. At the very least you have an over thought view of it. At least in the two posts
you have made so far you seem to think that SE wants us to sell even at a loss in some sort of inventory management game. This is further
from the truth. There wouldn't be a Tax on the markets if this was the case. it's in the best interest of the economy to not crash so more gil
gets siphoned out through taxes. Your notion leads to the point that Vendoring is the better option and that injects more gil into the economy.
this intern deflates currency and inflates prices. IE 500k titan runs that SE has no control over.

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Person A buys a car for $20k
Person A sells the car later on for $1k

Based on your logic, you believe Person A is "lazy".

What you fail to understand is that Person A didn't buy the car to sell it. Person A bought the car to drive it and sold it after they were done with it. Otherwise its just taking up space.

Lets take that above example and apply it in game:

Crafter A creates something with a 100 gil value.
Crafter A sells it for 50 gil.

What you fail to understand is that Crafter A didn't create the item with the intention of selling it. Crafter A created the item to gain XP and sold it after they were done with it. Otherwise its just taking up space.

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Originally Posted by Reiterpallasch

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It's a little too complicated for me to explain, but I will say that this is meant to happen. Some people are just willing to sell at that price to make quick money. If it makes everyone else lower their prices continuously to fight for buyers, then this is probably a sign that there are too many sellers. Just be patient and eventually you can still sell your items once prices rise again. I know I sell for cheap sometimes so I can quickly buy some materia to meld. It's not unreasonable.

Also, lowering prices by 1 gil doesn't really work. Depending on where your retainers are selling at, there is still tax for transportation. A Gridanian retainer selling something for 5000 gil could still be cheaper than a Limsa Lominsian retainer selling at 4800 gil if the buyer was in Gridania.

Auction house is meant to be a competition. Be smart on what, when, and where to sell and you can beat the others.

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Originally Posted by rswfire

So true. This is why I try to level my crafting classes making stackable items, but you do, in fact, end up with a lot of random items taking up too much space.

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I do agree with this,as the same happened when I took CRP to 50.However instead of taking the items I made for leve's and putting them on the AH, I either gave them to FC mates wanting to lvl CRP or I sold them to an NPC. The Mats I no longer needed, but could get anytime, I put on the AH and sold.

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Originally Posted by zenmetsu

First of all, it is basic economics... you should have learned this in high school. If someone dumps stuff on the market for a perceived loss, nothing is to stop you from picking it up and re-listing it. If someone is willing to let something go for free, then that is their deal.

Second... seriously, learn then vs. than. It is really hard to take someone seriously when they show such a disregard for proper grammar.

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First off; you missed the entire point.

Secondly;

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Originally Posted by Haibel

Nope wrong. I produce nothing, I make my money off everybody just giving me money. I have reset markets many times over.
if people actually did what I said above I would be out of my money maker.

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Thirdly; I know far more about economic than you think I do. If you didn't miss the entire point to the post you would see this.
Getting overly critical about three mistakes in that whole texts says more about you Than me. Resorting to ad hominem attacks,
come on you do better than that.

Blah blah blah...comparing a fantasy economy with a real world economy is an exercise in futility. Sure, there are some similarities but the differences are big and clear enough that comparing the two is like comparing apples and tuna fish.

We all know this games community is filled with some great players as well as the derpiest you will find in any mmo...to expect them not to impact the economy is a bit naive. Good players will find a way to take advantage of the idiocy laid about in the marketboard by the bad players.

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Originally Posted by Espi

Blah blah blah...comparing a fantasy economy with a real world economy is an exercise in futility. Sure, there are some similarities but the differences are big and clear enough that comparing the two is like comparing apples and tuna fish.

We all know this games community is filled with some great players as well as the derpiest you will find in any mmo...to expect them not to impact the economy is a bit naive. Good players will find a way to take advantage of the idiocy laid about in the marketboard by the bad players.

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This was geared to the derp, so I stop taking advantage of the derp, so they can be a little less derp. I like that word. Derpiest

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Originally Posted by Espi

Blah blah blah...comparing a fantasy economy with a real world economy is an exercise in futility. Sure, there are some similarities but the differences are big and clear enough that comparing the two is like comparing apples and tuna fish.

We all know this games community is filled with some great players as well as the derpiest you will find in any mmo...to expect them not to impact the economy is a bit naive. Good players will find a way to take advantage of the idiocy laid about in the marketboard by the bad players.

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Theory of economics does not involve just the real world. It covers plenty of situations that are impossible in the real world. Perfect competition is one basic example of this. In fact, this game's economy is much closer to that theory than the real world ever was.

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Originally Posted by Seraphita

Reallly? I guess people always do this is the real world economy. People love going out of business.
Idiot...

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You must have been living under a rock for the past 8 years. This is one of the biggest reasons people DO go out of business. It's also the reason we're not all rolling in money. People mismanage their assets in XIV just like they do in the real world.
Idiot...

Our Market board is based on one time sales and crafter to crafter sales.

Both will cease to exist given enough time. The way the class system in ARR works there will, much sooner than you think, be no need to buy anything on Market boards.

It's doomed.

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Originally Posted by soshifood

Theory of economics does not involve just the real world. It covers plenty of situations that are impossible in the real world. Perfect competition is one basic example of this. In fact, this game's economy is much closer to that theory than the real world ever was.

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We can debate everybody's understanding economics till the end of time. There was a Question in the OP, of which there has been two suggestion's
debating one of them or pitching your own would be helpful. you seem to have the interest and have not attacked people so.... spill it Princess Lenna.

Working as intended as far as I can tell. People are free to price their goods at a level they feel comfortable with, even if it happens to greatly undercuts the rest. When that happens, you have scalpers who swoops in to, um, correct the market while making a profit in the process (like an iPhone launch!). Market prices are maintained as a result (as long as the supply/demand remains stable). No issues here.

Not sure why you expect the market to be stable this soon into the game. Still tons of players, there's a massive flood of supply all over the place.
This is a game, people are not investing 5 hours of farming to wait another week for their mats to see at standard market price. Compentition and all that.

Supply isn't the only problem either. The actual demand for mats is not as much as the need for shards. The problems with consumables. The need to spiritbond gear for materia. Add it all together and people want to get money now because it won't be there later.

Untill you fix every problem the market is going to be unstable. Reset it all you want but people will continue to undercut as much as possible so they can sell in the flood of supply.

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Originally Posted by rswfire

I've been considering this also. I see a lot of people picking up the crafting classes, and it doesn't take much effort to level them, so I definitely do believe a fairly high percentage of players will not need the markets as much. There will be some things they'll buy there (materials you can't get from an NPC) but by and large, they'll be able to make anything they want.

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I think your assumption is just that, an assumption. SE's own census released 24 September show the avg crafting level over all servers is level 18 on legacy and 13 on non legacy.
it always seems there are more than there really is. I think I'm out of responses after this post. I hope this lives on.

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Originally Posted by Haibel

snip

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I agree with the first, to an extent. If you're certain that prices will rise again in the future, keeping yours the same can help you earn more. I see this more as a matter business skills rather than a problem with the economy.

For the second one, it's true more analytics would help us plan better. Question now would be if SE omitted this on purpose. When there is lacking price information, people are more likely to make or lose a lot. While a huge disparity between rich and poor might be bad in the real world, consequences are not the same in a game. It's possible SE purposely wants the economy to be this way. If you lose, you always have the chance of making more, because it's not like your character is going to die. Collecting materials is also pretty easy. I've had less than 1000 gil. Crafting a few leathers got me back to 80k. It's like a mini-game of business in which you will definitely make money as long as you play it smart.

Some people might disagree with me, but that's how I see it.

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Originally Posted by rswfire

The makers of Eve Online, a sandbox MMO, have real world economists on staff. That game's entire economy is player driven, so much so that they needed to hire economists to ensure a stable marketplace.

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The economy in Eve plays a much larger role in that game. The only real comparisons between the two games is that they both
have economy. It's been forever since I have played Eve and so what are some things does that would be a benefit to XIV?

Please help! I am still trying to find your use of "alliteration".

Ok, so first two points, then I'll discuss some real issues with the economy:

1) If a player sells to the market board for less than they could get from a vendor, then yes, that's just dumb.
2) If a player sells to the market board for even 1 gil higher than they could get from a vendor (even 1 gil higher than for an entire stack, after factoring in tax), then that's economic theory at work.

If you're complaining about 1, then sure, I agree with you. Solution to 1? Buy up stuff from all the dopes and sell to the vendors. You make a bunch of gil AND help save the economy in one move. Congratulations!

If you're complaining about 2, then eh...yeah. That's just silly.

As for the post talking about the problems with the market, you're right, those are a few obvious issues (I wouldn't even label them real problems) with the market.
A) Reselling quest items only has increased the supply, without increasing demand, so naturally the price goes down. This isn't a real problem (I'll talk about why further down).
B) Only selling pre-set stacks isn't a real problem, either. Solution: farm less (or see the first solution to problem 1).
C) Knowing the vendor-sell price for a given item, or even if that items sells from vendors. Erm...you realize that it's good for the economy for players to sell items for cheaper than the vendors sell the same item? Maybe not... Oh, and it's also good for players if they know these systems to be able to buy items from vendors and relist them on the market. Both of these are working as intended. Any other complaints are really just problem 1 in disguise, and for those complaints, see solution to problem 1.

Now, let's talk about A, and the elephant in the room. The elephant in the room here is that demand has a limited lifespan. People will stop needing gear, and in the relatively near future. The (also limited) solution to this is materia. You know all those quest items you got? Spirit bind them, convert them, and sell the materia. That's your most reasonable option, really.

Furthermore, demand is constrained by money supply (and I know, some of you budding economists don't get that, but don't worry, you'll cover it later in your macroeconomics course). One of the reasons why the markets are crashing is exactly the problem many of us brought up weeks ago. The money supply in the game is too small. This has led to a natural deflationary pressure across the entire economy, and has, ultimately, slowed down demand. It remains to be seen if the gil drops in high-level dungeons will remedy this problem, but for the time being you can expect the markets to further crumble and to have more and more things listed for astronomically low prices.

Edit: one final point, about people asserting that economics doesn't apply to in-game markets. You couldn't be more wrong. Economic principles play out every hour on the market wards, exactly as one would expect them to who studies economics. Just because you don't understand it well enough to see the trends and market pressures doesn't meant they're not there or that they don't obey the principles of market forces laid out in economics...oh, and those of us who DO understand them are making a killing, even in down markets.

Its pretty sad how people keep undercutting but that's their loss. I picked up an HQ ilvl70 piece today for just over 300k while the same HQ piece is going for 1mil all day long.

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Originally Posted by Arkista

Its pretty sad how people keep undercutting but that's their loss. I picked up an HQ ilvl70 piece today for just over 300k while the same HQ piece is going for 1mil all day long.

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There is nothing wrong with that if they are still making profit. If they make less profit, that is their decision. But the amount of profit they want to make is up to them.

I usually sell items for lower than what a lot of people list because I am still making a massive 100% profit. I would rather have it sell quickly so I make 3 or 4 and set them all lower and make 400% profit rather than 1 item at 150% profit that won't sell.

Something that I don't see addressed is skill up items. You have to consider if someone is dumping a bunch of stuff on the AH they might have been skilling up on it. So they already got the value they wanted from it. Same I may have to pick a stack of cotton before I can get to next level Botanist all the value was in XP the cotton is worthless to me.

Also I haven't really seen a skill up guide for crafting. But in most games getting up there are levels where the skill up item is worthless and you just vendor it as a huge loss. It is going to take a long time but eventually this will mostly stabilize. Once most people have crafted and leveled what they wanted there should not be a glut of crafted stuff.

One thing original post implied to me was people are not valuing the time they play. Maybe they are valuing the time just how they see fit. It is not our place to judge. Marketing for less then vendoring is a little weird though.

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Originally Posted by Orsnoire

Furthermore, demand is constrained by money supply (and I know, some of you budding economists don't get that, but don't worry, you'll cover it later in your macroeconomics course). One of the reasons why the markets are crashing is exactly the problem many of us brought up weeks ago. The money supply in the game is too small. This has led to a natural deflationary pressure across the entire economy, and has, ultimately, slowed down demand. It remains to be seen if the gil drops in high-level dungeons will remedy this problem, but for the time being you can expect the markets to further crumble and to have more and more things listed for astronomically low prices.

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I think I have to agree with you. I didn't quite notice back then, but prices have actually fallen by quite an amount on my server. The extra gil from dungeons is a more than welcome addition for me.

For me it's not the low prices that are the problem, it's the ungodly prices the botters and farmers put things like shards and aldgoat skins at. Jesus. Can't fight them for the materials, and can't win trying to sell for them. Have to bit the bullet and pay out one's butt.

NQ for the lower high end gear will be sold for a loss, break even if you're lucky. Don't expect to make money if you can't HQ.

Towards your point though, learn how to use the market for your benefit. I see way too many crafters/gatherers selling without common sense:

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"There have been 8 sales of this item in the last 3 days, I'm going to fill up 30 retainer spots with it, undercutting everyone else." Good luck with that, the kid next to you on the short bus will do the same and undercut you tomorrow.

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Diversify your retainer sales. Don't sell more than 5 of the same item at once, and only do that with materials.

Sell in reasonable quantities; nobody wants to buy your stack of 99 HQ Boar Leather. If you sell them in chunks of 9 or less, you can unload them faster. Also know what you're selling, 4 electrum ore make an ingot so sell in multiples of 4. 3 darksteel ore make an ingot, sell in multiples of 3. Sell that leftover 1-2 by itself and it will go fast.

To the point of nobody in the real world selling something for a loss, because that's how you go out of business:

Most grocery stores sell milk for a loss. They sell several other items for a loss. These are the items that they put at the back of the store, so you have to walk past all their other crap to buy them, and end up buying something else. You know those impulse items in the checkout lane - like batteries and crap your kids beg you to buy? That's a huge money maker for stores, and more than makes up for that gallon of milk you came for and got for 20 cents below cost.

How does that relate to ARR? You sell your crafting/gathering/farming items for a loss while you are leveling up that job, for the opportunity to make a profit off something else that makes up for the difference.

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Originally Posted by Bloodwillow

For me it's not the low prices that are the problem, it's the ungodly prices the botters and farmers put things like shards and aldgoat skins at. Jesus. Can't fight them for the materials, and can't win trying to sell for them. Have to bit the bullet and pay out one's butt.

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Wow. If you complained about Fleece and Diremite Webs I might have had some sympathy (although SE has apparently upped the spawns for those with the hotfix). But shards? Aldgoat Skins? Pick up a Weathered Pickaxe or a Weathered Hatchet and go out and get yourself some shards. Go out to Drybone where there's over a dozen Aldgoat spawns (and they respawn quickly, too--not to mention one kill will sometimes drop multiple skins). These are not hard to get.

Here we go someones mad his iron ores sold for 500 less

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Originally Posted by Kogaki

It's called economy. Get. Over. It.

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It is broken economy if you can buy from the AH, selling it to the next NPC and make profit doing it.

Step 1 to repair the economy: stop selling stuff in the AH with the default price. The default price is the price a NPC would give you for the item. If you sell it to the default price, just sell it to a NPC and you would get 5% more gil than in the AH.

Something the OP completely missed by a mile is that defining the optimal cost of an item takes time, and thus is ultimately a cost you have to factor in. Going the quick way about it is not just being lazy -- it is also saving you time you can use to get more money in turn. While selling under the npc price is quite insane (or just plain trolling), everything else is fair game, cause you don't know anything about the situation of the seller. Lots of people in the thread mentioned plenty of them. Usually when i put something to sell on the market i just want to get rid of it and get some quick buck. I don't want to have to wait, maybe be undercut by other, check up on the marke again and again, etc. Just want another player to be kind enough to act as an npc, without ripping me off like an npc. I have no problem undercutting the lowest offer by 30% if i have to and it allows not to think more about it and just get the quick gil. Playing the market bore me most of the times, so you can think of it as me paying a price (the difference between what i make and what i could have make) not to have to think more about it than check up price, undercut greddily, done.

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Originally Posted by Bloodwillow

For me it's not the low prices that are the problem, it's the ungodly prices the botters and farmers put things like shards and aldgoat skins at. Jesus. Can't fight them for the materials, and can't win trying to sell for them. Have to bit the bullet and pay out one's butt.

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People can bot to farm shards but they can't prevent you from farming them yourself. I just went out and got 1000 Lightning shards two days ago with like 7 bots around (yesterday they were all gone, maybe SE finally banned that batch of them).

But concerning Aldgoats: people bot those on your server? Holy crap, Gilgamesh must be horrible if even the Aldgoats are botted, when so many of them are around in the zone. I have no problem farming Aldgoats on Phoenix. Banemites on other hand were a pain in the ass. Haven't checked how things are after the hotfix.

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Originally Posted by Casper

[....] I have no problem undercutting the lowest offer by 30% if i have to and it allows not to think more about it and just get the quick gil. Playing the market bore me most of the times, so you can think of it as me paying a price (the difference between what i make and what i could have make) not to have to think more about it than check up price, undercut greddily, done.

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So long you don't start to underprice what a NPC would give you it is ok.

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Originally Posted by Felis

It is broken economy if you can buy from the AH, selling it to the next NPC and make profit doing it.

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You say "broken". I say "profitable"! People want to give you free money. Why are you angry about this?

Default price should be left empty, then people would need to look for a price or just make one up.

Supply and demand is the main issue here though, but if SE do reduce the supply people will just complain, only way they can do this is to change the supply of gathered mats over the course of multiple patches and even then its not like people won't notice.