Just a couple of problems with the Market Boards.

[Kazamoto]

You keep saying Tax, taxation, dead weight loss.
And really, it isn't a tax.

Its a service fee.

The marker board provides the service of a central place to post your items.

The board then advertises your wares to buyers in every main city.

Should you have an item listed for sale in a different city than the buyer, the market charges the buyer a delivery fee.

The market fee would go to pay, in the most role playing of senses, the retainers wages (they aren't slaves as far as I know) and what ever fees they have to pay to the nations to post market boards.

If you didn't want to use the service of the market board, you should shout your wares in any town.

The market boards are more like ebay than craigslist

[Zigkid3]

You keep saying Tax, taxation, dead weight loss.
And really, it isn't a tax.

Its a service fee.

The marker board provides the service of a central place to post your items.

The board then advertises your wares to buyers in every main city.

Should you have an item listed for sale in a different city than the buyer, the market charges the buyer a delivery fee.

The market fee would go to pay, in the most role playing of senses, the retainers wages (they aren't slaves as far as I know) and what ever fees they have to pay to the nations to post market boards.

If you didn't want to use the service of the market board, you should shout your wares in any town.

The market boards are more like ebay than craigslist

As far as the game is concerned it's a tax. You're just slapping on another label.

[Kazamoto]

A tax adds no value, dead weight, a service makes your life easier.

As a result prices will increase as a response in an attempt of sellers trying to pass the tax burden onto the buyers. People will also be discouraged from selling so you'll have less suppliers as well.

Also,

The decision to pass on the costs to buyer is up to the seller, but if the market wont bear the additional cost, then prices will stay low.

And, if you honestly think people would be discouraged from selling to the extent that there are less suppliers... you really need to back away from this conversation slowly.

People would continue to sell on the market for the same reasons they undercut, because its easier and faster.

[ShinkuTachi]

Generally speaking.
Take a look at certain trading goods that's traded with a multitude of suppliers and the transaction history is all from the current day. Then compare those price fluctuations with other items that may only have a dozen or so suppliers and people only buy it maybe a couple times a day.

As for my server, common trade goods & materia among some other things are pretty stable, I rarely see any huge and consistent price fluctuations that people seem to be talking about. Whether they're exaggerating or not who knows.

As I said, the experience on your server may differ; and from what your telling me, it does. I'm sure you will also find a different experience on the fresh start servers as well. There are a number of things that can contribute to that: population, what the population is doing, supply, demand, the value of goods, the value of gil, and other contributing factors I can't think of.

What I won't do is accuse you of making things up, because I don't know your server experience personally.

[Brises]

As far as the game is concerned it's a tax. You're just slapping on another label.

In reality, taxes fund useful services to the community. This 5% serves no useful purpose whatsoever other than to simulate sales tax for realism. SE certainly does not use in-game gil to finance any development of the game. It is only for the sake of fantasy realism. (Yes, I know that's an oxymoron).

[Zigkid3]

In reality, taxes fund useful services to the community. This 5% serves no useful purpose whatsoever other than to simulate sales tax for realism. SE certainly does not use in-game gil to finance any development of the game. It is only for the sake of fantasy realism. (Yes, I know that's an oxymoron).

Though it does as act as a way to combat inflation.

[Wazabi]

Yes, which is a bad thing.
Well supply would change where it intersects with demand to find the new price, hasn't actually changed demand just where it intersects.

=damn off topic and technical=
The intersection is just the equilibrium. Both curve only shifts due to exogeneous factors such as changes in number of players gathering that mat, gathering rate, introduction of new gears...etc. So only these causes a shift in curve, thus a shift in equilibrium point.

Endogeneous factors such as undercutting moves the price and demand along the line. Say eq price is 100, and I sell mine at 50, trace the path of the supply curve to price=50, that's the qty that sellers are willing to supply, which is lower, and also why most other seller biatch about undercutting. At that price and that supplied qty, now track over to the demand curve. For that price, demand increases...the qty gap between demand and supply at a price level determines if an item is over or under supplied...and would eventually close back to equilibrium. Draw the curve and look at it youself...I'm too lazy to draw it up here.

Also, I believe that tax on listing actually drives prices to equilibrium faster.

Please use full quotes.

Elasticity is one thing, but how much should be considered normal? 10% of an Items cost? 20%? 50%? 75%?

Items get cut to 100g from 400g, then build back to 400g, only to be cut again.

There's no fix number for a normal elasticity...all we can do is study many data points to determine the normal level...and even that is dynamic subjecting to major events.

The phenomena that you've noticed about price happens mainly in low transaction items, or low population servers. Malboro was unusually quiet on weekdays, and price would skyrocket at Friday, only to sink around Sunday night, then the whole cycle repeats itself. That might suggest the equilibrium price is near 100, but due to undersupply, it shoots back up to 400. Don't see a lot of the problem you mention in Tonberry where everyday is packed full of people.

Tax/service charge, it just adds to the cost of selling an item, and will have an impact on how efficient is the transaction being carried out.

Also, the tax/service charge here is to control the supply of gils...which has a very direct and huge impact on price level.

[Zigkid3]

=damn off topic and technical=
The intersection is just the equilibrium. Both curve only shifts due to exogeneous factors such as changes in number of players gathering that mat, gathering rate, introduction of new gears...etc. So only these causes a shift in curve, thus a shift in equilibrium point.

Endogeneous factors such as undercutting moves the price and demand along the line. Say eq price is 100, and I sell mine at 50, trace the path of the supply curve to price=50, that's the qty that sellers are willing to supply, which is lower, and also why most other seller biatch about undercutting. At that price and that supplied qty, now track over to the demand curve. For that price, demand increases...the qty gap between demand and supply at a price level determines if an item is over or under supplied...and would eventually close back to equilibrium. Draw the curve and look at it youself...I'm too lazy to draw it up here.

That's what I was saying.

Earlier you had said that when supply changes, it changes the price which is true. But then you added that the change in price effects demand, which is not.
At the new price the demand curve is still the same because nothing changed demand, the quantity demand however has changed though because there was a movement along the curve (because supply is intersecting at a different point).

Like this:
http://i.investopedia.com/inv/tutori...economics8.gif

So the quantity demanded has changed along the curve, not a shift.


Though from this quote it seems like we're on the same page, but when you said a shift in supply would change demand earlier it sounded like you were referring to a shift for some reason.
That's what I was saying.

[bwalker36]

I think wazabi meant what you said above Zig. I would have taken a "a change in demand" to mean amount demanded. Shift was always the word we used when describing a change int he actual curve.

[roohan]

In my opinion this "I know economics" discussions are funny. I think people simply undercut for whatever reason. Many players do not analyze the market, they just sell their items on the market boards. For example, a guy has a pretty packed inventory and just wants to clean it up. A few seconds ago he was leveling his miner and got lots of iron ore. Now what is he going to do? Sell the iron at a common price? No, he is going to undercut because he wants some free room again and he doesn't want to wait. Scenario two. A guy has lots of useless (useless for him) stuff in his inventory. He does not craft alot and doesn't really know what is valueable for a crafter. He thinks "man I want to get rid of all this crap" and simply undercuts the other persons selling the same item and knowing the market value. Now imagine 5 (that's not alot) guys doing this on a single item on a single day. I think it's easy to understand how fast prices can drop on the market boards. And the worst thing is that this behaviour produced a common undercut mentality. Every single item is cheaper than the previous item in the list. Everyone thinks that undercutting is a must to sell something on the market boards. I even come home and think "Did my stuff really sell today, or did a dozen people undercut me again". And if people are in need of gil it gets even worse, because they don't want to wait for their money.

Most people do not analyze the market in the game like you do in this thread. They don't want to play the market boards and put some time into selling items for better profit. They just want to get rid of their stuff and get some quick gil NO MATTER how high the demand on said item for example is. Sure the supply and demand discussion has truth in it but you have to take lazy players into account, they destroy almost every rule of thumb. From their standpoint it's plain undercutting and I think those people are not a minority in the game.

And on a sidenote the market boards are not really transparent enough to get a good feeling of supply and demand. I got 450 mythril ores from gathering yesterday. I was like damn that's alot to sell. I've put them on the market board and they sold within 5 minutes. I did not really expect that.