Just a couple of problems with the Market Boards.

[Kazamoto]

The main issue I have with undercutting, is that it is far too easy for a single seller to set off a chain reaction of undercuts that can damage an items value for weeks or even permanently.

Either a blind bid, or applying sale tax when the item is listed or price adjusted would slow the downward spiral a single undercutter can cause.

The only logic followed by most sellers now is:

Buyer wants to buy lowest price Item.
Lowest price item will sell first.
I must sell at lowest price.

There are times I've noticed one or two undercutters on an item I'm selling, so i buy them out before they can hurt prices, then relist the items at a slight profit, but if I'm in dungeons all day i cant be watching every market listing. It only takes one or two people to cause every other seller to just adjust their prices down rather than wait it out.

[bwalker36]

The main issue I have with undercutting, is that it is far too easy for a single seller to set off a chain reaction of undercuts that can damage an items value for weeks or even permanently.

Either a blind bid, or applying sale tax when the item is listed or price adjusted would slow the downward spiral a single undercutter can cause.

The only logic followed by most sellers now is:

Buyer wants to buy lowest price Item.
Lowest price item will sell first.
I must sell at lowest price.

There are times I've noticed one or two undercutters on an item I'm selling, so i buy them out before they can hurt prices, then relist the items at a slight profit, but if I'm in dungeons all day i cant be watching every market listing. It only takes one or two people to cause every other seller to just adjust their prices down rather than wait it out.

My solution and I think you might agree is to be forced to cancel the auction and then re list it. While doing this you must also pay fees when you list. I don't get not having to pay an upfront fee to list something that you get back if it sells and you don't if it doesn't. Stops two things the first being people listing things they should not be like allagan pieces lol and also stops people from adjusting their price every 30 seconds.

I will agree that the market reacts on supply side prices perhaps a bit too quickly because there is no penalty for improperly listing. If i had to pay 100 gil to list my stack of 99 I would be more inclined to keep it closer tot he average price, and I definitely am not going to re list to counter a 1g under cutter. I just have issues with withholding the supply price.

[ShinkuTachi]

Only the winning ones, bwalker36 was talking about bids that did not win.

I didn't notice that, my apologies.

Let me also throw out Kaz that I do a lot of crafting. Infact I do more crafting now than anything else lol so I don't just want cheaper goods that's not my play.

I know what you mean here, and a lot of time that's just the cost of doing business when people don't want to go farm. That's why gathering was the first thing I got on after getting a 50 battle class; so I can provide for my crafting classes myself. Otherwise, tons of money is sunk into crafting, and many times you end up at a loss or if you're lucky, a sliver profit margin of what you could potentially earn. Which is good in my opinion because it provides some reward for people who are willing to farm stuff.

In FFXI for example, farming crystals was a great way for new starting players to earn gil to get them going.

The main issue I have with undercutting, is that it is far too easy for a single seller to set off a chain reaction of undercuts that can damage an items value for weeks or even permanently.

Either a blind bid, or applying sale tax when the item is listed or price adjusted would slow the downward spiral a single undercutter can cause.

The only logic followed by most sellers now is:

Buyer wants to buy lowest price Item.
Lowest price item will sell first.
I must sell at lowest price.

There are times I've noticed one or two undercutters on an item I'm selling, so i buy them out before they can hurt prices, then relist the items at a slight profit, but if I'm in dungeons all day i cant be watching every market listing. It only takes one or two people to cause every other seller to just adjust their prices down rather than wait it out.

This is actually my only problem.
I only buy out massive undercutters though. Like if I see items going for about 50k-ish and someone undercuts to like 10k~20k, then I will buy it and resell it for like 48k or 49k. I also don't have a problem with undercutters only doing so by the handfuls of gil at a time.

However, watching something that's selling comfortably say 5k, get driven down to 100-200gil in a matter of hours is a bit saddening.

My solution and I think you might agree is to be forced to cancel the auction and then re list it. While doing this you must also pay fees when you list. I don't get not having to pay an upfront fee to list something that you get back if it sells and you don't if it doesn't. Stops two things the first being people listing things they should not be like allagan pieces lol and also stops people from adjusting their price every 30 seconds.

I will agree that the market reacts on supply side prices perhaps a bit too quickly because there is no penalty for improperly listing. If i had to pay 100 gil to list my stack of 99 I would be more inclined to keep it closer tot he average price, and I definitely am not going to re list to counter a 1g under cutter. I just have issues with withholding the supply price.

I also wouldn't be opposed to steeper taxation and an immediate listing charge to the seller; as well as, adding a charge to price adjustment. While it wouldn't cause a fullstop to undercutting, people would be a bit more careful in how they do things.

[Kazamoto]

You are correct, I do agree with that idea.

And it is another feature from the ffxi ah that was not carried over, but should have.

The old way:

List item for a price.
Get charged base rate+price*some percentage
then
Item sells, get price gil.
or
Item sent to mog house (retainer), forcing you to relist, and possibly adjust your price.

If that's how it worked here, that would be fine, it wouldnt need the blind auction feature, and people selling things for 1g would be charged an idiot tax because the tax to list the item would exceed their list price.

[bwalker36]

I also call for so called tax to be called idiot tax.

Its also how most MMO's do it. I mean its obvious they took a lot of direction from WoW and they even have the same style AH although in a much different UI package. Wow does it the same way, you list an item get charged a fee.

In fact I cannot think of any MMO I have played where you did not get charged the fee upfront. Maybe GW2 but i'm not sure.

[Wazabi]

I was saying that 'real world' economics doesn't apply in the sense that, businesses aren't undercutting each other into oblivion...

Business do undercut eachother...but the justification depends on perspective. And yes, they do undercut at a level below their cost to clear their inventory. The reason you don't see much variation in the price of some daily item is that the item and its raw material has reached an equilibrium price.

MMO on the other hand is slightly different in that the materials that you gather do not cost anything other than the time taken to gather it. I can spend 1 hours gathering 100pc of something, and when I realize that 100 other players are doing the same thing and the world only requires 100 pieces, I'm probably going to put mine on firesale to sell of the item. Even when I sell it at 1g, it's still a profit of 1g... My time is worth more to me, so I won't touch those market, and won't sell it at that price...but it is perfectly reasonable for others who value their time less to do so. We can still see constant undercutting on certain items, but to me that's an indication that an item hasn't reached its equilibrium price. MMO market still obeys the same law as in the real world market...just that there are some mechanical difference that makes it behaves differently. You'll need to understand economic theory as a whole rather than bits and pieces of it.

Seeing the market from 2 different servers (malboro and tonberry), their price level is totally different. Gold ore in Malboro usually goes at 500g, but in tonberry, it goes for less than 300. Why is that? It's due to the size of the market and the number of transactions. Tonberry, being a Japanese server, is much more active throughout the week as compared to Malboro. Price level does not fluctuate as much as in a low activity market. Some player proposes a blind bidding market system like FF11...but anyone familiar with game theory and auction mechanics would tell you that it will decrease market activity. It's what we call information asymetry that gives an advantage to the seller.

When choosing a market system, we cannot look only on ourselves, but need to look at the community as a whole, and we call that economic efficiency. Most proposal I've seen are strongly biased to the seller and they will use misguided theory to justify it. Personally, I'm all in for a blind auction system because I know I am able to profit more from it...but for an overall game perspective, I would have to put my vote for a more open system like the ones in Eve and GW2.

[Kazamoto]

I am a pretty pony.

(jk)

This is why bwalker36 and I have agreed that, like EvE, GW2, FFXI, and others, the 'sales tax' or listing fee, should be paid when you list the item, not when it sells. And should be paid again to adjust the price or relist the item.

[Zigkid3]

Time to inform the misinformed...(I just copy/pasted this from an older thread, but i feel its relevant to what's being discussed here since kazamoto mentioned how he hated undercutting, note this stuff is copy/pasted from the extra taxes thread)....

It's a good thing that you are taxed only once the item sells rather than each time to put it up or adjust the price. If the game punishes you for every time you list something rather than actually selling it and thus contributing to the economy, then everyone in this game will lose more money than they can gain on the market due to competition and other suppliers. It would discourage anyone from selling most things on the market, thus creating a shortage of suppliers and thus increased prices for the buyers. People will always need to adjust their price if their item is not selling.

Second, under-cutters are healthy for the economy, this also ties into why people should be allowed to adjust their prices freely. Under-cutters will try to sell for less than the other person even if it means by 1 gil, this will drive prices down to equilibrium which is good. The reason why you're seeing a lot of under-cutters right now is because the game and it's economy are still relatively new, it's in it's infancy as people are still in the process of figuring out where supply and demand would meet. This has nothing to do with the economy being 'bad', but rather with the economy being new and structuring itself. People will continue to undercut repeatedly until prices fall enough to hit equilibrium.

Price adjustments should be able to be adjusted freely as a faster and more liquid markets allows itself to correct its prices faster and react faster to reach equilibrium faster and thus more stable.

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. This is because there are so many suppliers out there with no barriers of entry to the market, i dare anyone to try and monopolize on something only to see that itll get flooded with more suppliers in the next couple days. It won't do much to slow undercutting as people who are newly posting an item for the first time will undercut and there will be a lot of them. 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.

Either way, the market will reach equilibrium. the difference is the speed at which it will happen. The more frequent the undercutting, the faster it will reach it. Also to show you how and why including more tax would negatively effect the market, here is a graph for you: http://ingrimayne.com/econ/government/Figure13.4.gif
the big triangle between ab&c is the dead weight loss, which is a loss of efficiency within the market. The more of a tax you impose, the larger the triangle and the less efficient the market becomes. (shaded regions are the tax revenue which is gil taken out of the game). Notice how the supply line shifts left the more and greater the tax becomes, and now look what happens to the price increase, and quantity supplied decreases as the line continues to shift left.

If taxing for every price adjustment is better, why don't we do this in real life? As it is now, real life taxes items once they are sold. Why is that?

It will stop when sellers are not willing to undercut any further because they'll have an idea of how much people are willing to pay for the said item, this will eventually stop people from trying to flip items. Then you have the people that aren't flipping, but got an item by other means, theyll post it up and probably will try to undercut a little if they want to sell it right away, if they do, someone will buy it right away and take it off the market. When prices reach equilibrium it's not like it's set in stone forever and cant be changed, there will be a tiny amount of fluctuation but it will hover around a certain point. If the fluctuation is small, it's relatively stable; if there's a lot of variance in prices then it's not stable. anyone who sells below equilibrium, their item will sell fast because its too good to pass up or flippers will have an opportunity for arbitrage, if you sell above equilibrium then no one will buy it and then you're forced to sell for lower.

For things selling at 1g, you're probably seeing this with items that can be bought from a vendor. I'll use cinnamon for example since this is something I actually did. Cinnamon can be bought from a vendor for 4gil, but can only be sold back for 1g. What I did was I noticed the price for cinnamon was way higher on the market than 4gil, I took advantage of this. I bought 100 cinnamon's for 4gil each, sold them in stacks of 5 for I think 80gil each at the time, made 8,000-400=7,600gil profit. People began to catch on that this was an item that could be bought from a vendor for only 4gil. As a result the price tanked down to 4gil, the vendor price (luckily I stopped when I saw the trend of people undercutting down to the vendor price). Everyone else who bought from the vendor for 4gil could either hang on to it and use it themselves, but for those who bought a bunch or people who found it through the game and have no use for it would rather undercut 4gil than get 1gil from an npc. so for those who have cinnamon but don't want it, would want to sell to the market since they can get more than 1gil, but it also needs to be under 4gil. As a result it's going to hover around 2-3gil or even 2-4gil. As for those selling at 1gil, there is no reason to do this since they could instead vendor it for 1gil and get their money right away and not be taxed. I noticed people selling animal hides for 1gil each, same as the vendor price, I bought all of the ones for 1gil and sold them to a vendor and got rid of some supply from the market and increased the price to 2gil. Though I could've maybe sold them for 2gil each instead and double my earnings. If anyone were to undercut and put it up for 1gil again, i could buy it myself and sell for 2gil. then if i was done with the animal hide market I could vendor the rest that never sold for the equal price. So if it drops to 1gil, someone could do that. Anything that could be bought from a vendor that is selling on the market would range from a price of how much it vendors for+1 to how much it can be bought at a vendor, and would hover within that range.

That is for items that can be bought from an npc though. Anything else that can not be bought from an npc however, the price would be player driven and decided by the players.

[Kazamoto]

As always, and with many words, you ignore that fact that when ever items hit the magical equilibrium, a single seller can cause that price to spiral out of control.

A single sellers post, can disproportionally affect the average cost of an item because of the chain reaction undercutting we are currently seeing.

If there is an item with 5 stacks on the market, and a single seller undercuts by half, most of the sellers will then match or undercut that single new seller.

SUPPLY was not greatly increased, demand is unchanged, but the value as determined by market dropped significantly.

--

As for the tax at item listing, in real life, sales tax is applied to the consumer, not the business.
We have 'real life' sales tax now, when you are in one city, and buy from a seller in another.

The listing tax is representative of: advertising fee's (someone has to post your listing in ul'dah to limsa and grid right?), business taxes and license fees, labor taxes, etc.

The listing fee is there to purchase the service of using the market board.
In 1.0 and FFXI you could sell things from your personal bazaar and avoid these fees.

Time to inform the misinformed...

Sadly, while trying to be clever and insulting, you are only prattling off the same tired arguments that have been shot down repeatedly in a number of other threads.

And since we are trading back handed insults, your writing is poor and your paragraphs could use better spacing and structure.

[Little_Ifrit]

Ive no problem with the way the market boards work but 2 things ..

I wish there was market boards in the crafting guild halls. Running from the carpenters guild to the markets is pain in the tits.

I wish there was a log of what Ive sold. When I log on, and there might be 10 things sold from my retainer, but I never remember what they are.
A nice log would help that out !