Penalize players who adjust their prices too frequently

[Kazamoto]

A lot of people seem to feel that undercutting is great for the economy. And I, amoung others feel it is excessive.

Would the first group be happy if:

All Items NPC for 1g,
All items can only be listed for sale at 1g,
No taxes.

Now, buying power is absolute, you can buy as many of what ever you want for a pittance. But good luck selling things.

Even with 'overpriced' items, it means the seller has more gil to spend, on either mats to produce more goods, or on other things. When he buys things, that gil goes to others and continues to flow.

Consumers will always want lower prices, and that is to be expected. But the money those consumers spend has to come from somewhere.

Employees get pay, buy things from stores, stores pay their employees, those buy goods from other stores. If you constantly undercut the income for stores/crafters, they wont have the income to buy goods from others.

[cearka]

if they would bring back the function to buy singles from a stack (as an optional check box maybe), it would probably help the issue of undercutting. its' very hard for prices on stackable items to stabilize when the cost ranges are between buying a single item and buying freaking 99. as a crafter or something listing stacks, you'd have a steady trickle of income coming in from a stack listed rather then having it sit on the market forever and having to lower it more and more in cost because no one wants to buy 99 of what your selling and you don't have the space to sell it in smaller chunks.

[FAVisceglia]

For those who say "this is how free markets work" and offers no solution - 'claps' to you for your ignorance in failing to understand the root of the problem, however I've not the time to enlighten you on your narrow minds.

My undergraduate degree in Economics and my MBA specializing in Finance have apparently caused me to have a "narrow mind". But I pursued those degrees because I have a strong passion and interest in economics and finance, so I'd very much prefer if you'd edify me. Please, for the sake of my intellectual curiosity, find the time to explain how I am ignorant, how I have failed to understand the "root of the problem", and how free markets are a problem in need of a solution, as you imply. I would be indebted to you.

[Wigett]

The OP needs to stop crying, thats how things work. if i can offer a product cheaper, ... thus prices of alot of things will go down. or if you can make something that no one has or that people need. , u can charge what ever you want, if someone
is willing to pay, then its worth x. but if i offer it for a lower price then someone makes a choice. its how a free market system works and it works 100% of the time. prices start high, but as more and more ppl get int the market. prices drop.

people buying are not obligated to pay a high price if its offered lower. if you want to sell try relisting it lower. at some point the price will even out and become set.. it will go up a little or down a little, but it will settle in, sorry no one is willing to
over pay for your product when someone else will sell it cheaper.

[Umero]

I undercut things by 1 gil all the time BUT I'm not silly to undercut by 1 gil off of an already 50% undercut item.
Say, a whole list of oranges going for 100 gil each with the top of the list selling one for 50 gil. I would just put up mine for 99 gil. It's common sense because it would list my orange below the 50 gil one while above all the 100 gil ones. I don't think it's silly at all.

[MitArgento]

please..i undercut by 1 gil, not thousands, thats just plain silly

nothing wrong with undercutting thats how market works.

some people do some crazy undercuts which is stupid but oh well.

[HurtigeKarl]

please..i undercut by 1 gil, not thousands, thats just plain silly

nothing wrong with undercutting thats how market works.

some people do some crazy undercuts which is stupid but oh well.

The point is that one can design a market in many different ways. Currently due to a psychological factor that makes people prefer a 1 gil lower price rather than a 1 gil higher price when they are practically the same and should therefore be chosen at random, combined with no adjusting fee, causes many sellers to not think about their initial price setting and simply try to undercut by 1 gil.

If the market rules are changed to let's say 2% adjustment tax, then suddenly sellers have to change behaviour and think a lot more about their initial pricing. This leads to that each individual seller has to do less mechanical work in the sense of readjusting prices, but more thinking when it comes to actual price setting.

The latter market scenario sounds far more interesting to me and that's why I would prefer it.

[Wazabi]

A lot of people seem to feel that undercutting is great for the economy. And I, amoung others feel it is excessive.
Would the first group be happy if:

All Items NPC for 1g,
All items can only be listed for sale at 1g,
No taxes.

Now, buying power is absolute, you can buy as many of what ever you want for a pittance. But good luck selling things.

Even with 'overpriced' items, it means the seller has more gil to spend, on either mats to produce more goods, or on other things. When he buys things, that gil goes to others and continues to flow.

Consumers will always want lower prices, and that is to be expected. But the money those consumers spend has to come from somewhere.

Employees get pay, buy things from stores, stores pay their employees, those buy goods from other stores. If you constantly undercut the income for stores/crafters, they wont have the income to buy goods from others.

You've only got half the story correct.

Most proposed explanation that undercutting is bad is that they operate under the assumption that undercutting will lead to the item being sell at 1gil. Will that really happen?

Resources are finite, even in MMO. Mats are restricted by the drop rate, and the time that you can commit to it, and that affects supply. If item A sells at 1 gil, and it is a high demand item in which the supply cannot keep up, will the clearing price still stay at 1 gil? Will you still supply item A that only sells for 1gil when there are other items that can give you a higher profit? And if you switch to selling other more profitable item, what happens to the supply and price of item A given the same demand level?

Buying/spending power as you've explained are much more complicated than what you've explained, even in an MMO. The primary factor that determines those are the inflation/deflation level, in which the primary factor is the money supply.

So, say you're selling item A at 1000 now...and someone undercuts you by selling it at 500. How sure are you that you are not overpricing it? How can you tell that 500 is underpriced? Maybe 500 is the equilibrium level and you've been selling it at a premium? Say you're the sole seller in that market, and you've manage to sell 5 units per day...and I come in and sells 15 per day at 500...who's got the right price? It doesn't matter...what matters is that I've manage to sell 15 units at 500, thus 15 more units gets to the hands of buyers who needs it at half the price it was.

if they would bring back the function to buy singles from a stack (as an optional check box maybe), it would probably help the issue of undercutting. its' very hard for prices on stackable items to stabilize when the cost ranges are between buying a single item and buying freaking 99. as a crafter or something listing stacks, you'd have a steady trickle of income coming in from a stack listed rather then having it sit on the market forever and having to lower it more and more in cost because no one wants to buy 99 of what your selling and you don't have the space to sell it in smaller chunks.

Right now, if you're selling 1000 crystals at 40, I can break it up and sell 500 unit of them at 42, and 100 unit at 45. Say now buyer can buy singles. How do you think I will price my crystal? 45? 42? or 40? Fact is, I'll price it at a lower price at 40 at the first post. This is good for the buyer since they'll be getting their item at a cheaper price, but not so good for the seller as they can no longer do break bulk selling at a premium. Overall, it's better for the economy, but a better trader/gatherer/crafter will still stand to be more profitable than the bad ones.

[DarkGhost368]

Rather then attempting trying to penalize undercutting we should be putting a maximum profit gain ceiling to these items. That way we won't have this ridiculously overpriced items.

[Wazabi]

How do you determine how much is the ceiling price of an item?

Say silver ore is worth 20 now, and we put a ceiling at 30. Then one fine day, there isn't enough supply of silver...and I'm willing to pay 40 for that because to me, it's worth that much. How then? And those that are willing to sell can only sell it at 30. At the macroeconomic scale of things, if a price ceiling is set, then it will artificially restrict the supply of silver ore that players are willing to supply...becuase those that wants to sell at 40 for a wider margin won't bother selling this item anymore because there could be some other items that gives them a better margin. Any artificial inteference on price is never a good thing for an economy, and is only done for political purposes (for both good and bad).