Please change taxes...

[Zigkid3]

People will continue to undercut repeatedly until prices fall enough to hit equilibrium. I was under the assumption that people liked cheaper prices and stability in the markets, I guess I was wrong.

[Sotek]

I'm not against undercutting, I'm against rampant undercutting. The kind which has seen items fall from 5k to 100g in the space of a day.

If you're taxed for adjusting prices, then that makes you think twice about adjusting prices. Prices become much more stable because of that. Undercutting still happens, it just happens when a new supply enters the market, supply and demand being the most basic principle in economics. Items would have much more stable prices with such a tax, because people would sooner wait for it to sell than eat a tax. New supply would drive the price down, that's the way it should be, not "Impatient sellers who camp the market drive the prices down into oblivion" like we're seeing now. Do you get punished if you misjudged the market? Sure. You put something up for such a price that there is no demand for it, you'll have to eat that tax to adjust to a reasonable price. That's actually a good thing. It means you don't over price, because you'll likely get taxed. Prices fall to much more reasonable levels faster so as to avoid taxes, and undercutting becomes considerably less rampant resulting in much more stable prices. Win-win.

[Zigkid3]

I'm not against undercutting, I'm against rampant undercutting. The kind which has seen items fall from 5k to 100g in the space of a day.

So you're worried about the speed at which the market is becoming stable? What? That should be a good thing.

New supply would drive the price down, that's the way it should be, not "Impatient sellers who camp the market drive the prices down into oblivion" like we're seeing now.

It's both.

[Zigkid3]

Do you get punished if you misjudged the market? Sure. You put something up for such a price that there is no demand for it, you'll have to eat that tax to adjust to a reasonable price. That's actually a good thing. It means you don't over price, because you'll likely get taxed. Prices fall to much more reasonable levels faster so as to avoid taxes, and undercutting becomes considerably less rampant resulting in much more stable prices. Win-win.

Whether there are extra taxes for each price adjustment or just on the sale, sellers will continue to undercut each other either way, it won't matter. The only difference you made is everyone will end up paying a lot more just to post things up every time and now all you did was decrease the supply by discouraging people from selling stuff as often and drive up prices.

[Zigkid3]

Nalien's it's just a theory and doesn't reflect anything post

The "it's just a theory" argument is no better than trying to disprove the theory of relativity and evolution just because they're labeled as a theory. Think of theories as a mathematical model to explain how/why things work the way they do. They're labeled "theory" because a theory follows an inductive reasoning process rather than deductive. Go look out in the world and you'll see every model for economics are extremely accurate.

If you knew anything about economics you would know that it already takes into account human nature. I don't see how you can even claim that economists are clueless about math, when all they do every day is math; calculations, graphs, comparing data, etc... that statement just made me cringe.

[Zigkid3]

An online game economy would follow these basic principles, even more so since it's much more simplified than real life and because information is more readily available on the auction house and very simplified for everyone to see as it's literally right in front of them.

[Nalien]

The "it's just a theory" argument is no better than trying to disprove the theory of relativity and evolution just because they're labeled as a theory. Think of theories as a mathematical model to explain how/why things work the way they do.

Just no, relativity theory is mathematically profound using the most abstract models mathematics has to offer, undergraduate/graduate economist models use GCSE/A-Level mathematics at best and are incapable of properly describing a series of stochastic processes. Have you ever even seen a university from the inside?

[Nalien]

If you knew anything about economics you would know that it already takes into account human nature. I don't see how you can even claim that economists are clueless about math, when all they do every day is math; calculations, graphs, comparing data, etc... that statement just made me cringe.

I've studied both Economics and Mathematics by the way, and economists do in fact know shit all about Maths. Even Economics Ph.Ds have barely any understanding of real mathematical theory and profound modeling.

[Sotek]

Whether there are extra taxes for each price adjustment or just on the sale, sellers will continue to undercut each other either way, it won't matter. The only difference you made is everyone will end up paying a lot more just to post things up every time and now all you did was decrease the supply by discouraging people from selling stuff as often and drive up prices.

Really? A tax on price adjustments discourages putting things up for sale, instead of discouraging adjusting their price every hour? Seriously?

People are seriously going to continue adjusting their price every hour when its costing them a 5% tax each time, even though that will quickly kill their entire profit margin? They're going to just stop selling items instead of displaying some damned patience and waiting a while before adjusting their price in order to avoid the tax?

The only people who would stop selling because of a price adjustment tax are the complete and utter morons who are currently ruining this games economies. Everyone else is smart enough to realize that if you're taxed up-front, you don't waste Gil adjusting every time someone else shows up... Would I rather;
A) Wait an extra day or so for an item to sell at the price I originally put it up for in a stable market, or;
B) Sit at the market board all day, undercutting at every possible chance to ensure a sale, and eat a 5% tax each time?
The answer is bleedin' obvious... Your server must be pretty damn terrible if you think a significant number of people would opt for B...

[Zigkid3]

Nalien:
that's because the models have different requirements, just because one uses more advanced forms of math doesn't make the other not true. How do I into numbers, i don't even.

Sotek:
Because by imposing a tax for every price adjustment, if your item does not sell you either relist it and pay another tax, or let it expire and then relist to pay another tax. if they have to readjust the price even once or more than it will cost more each and every time. at some point most people will be selling at the same price once it hits equilibrium, then not only are you selling something but a ton more other people. you'll be incurring a loss, and thus the best move would be not to play.
No one would pick B obviously because the cost would be so high. There are so many players in the game that once you list a trade good, chances are someone will undercut you (if not at equilibrium) within the next hour, and yay now everyone is forced into scenario B because of your idea.