The way people price items is laughable at best!

[AlexionSkylark]

(yes, I'm shamelessly bumping my own post because it was on a very underpriviledged position last time, rs, guess almost nobody had the chance to read it unless going back a page)

I think that happens for a reason more explained by psychology than by economics...

OK, so, first we have to acknowledge the LEX MAGNA, the mother of all laws of MMO economics. Which is the following:

"The only thing of true value in any MMO economy, is TIME."

Yes, time. Essentially, every time you buy something from another player, you are paying him for their time spent doing something in-game you can't/don't want to spend time doing yourself. Be that leveling a class, farming an item, spiritbonding materia, etc, etc. Now, the tricky part is, how do you measure how much YOUR time is worth? Well, if you are a teenager with a truckload of free time, it's pretty obvious that you don't think of each individual hour of playing time as having the same ammount of inherent worth than, let's say, a father of two who can log in every couple of days for 3 hours tops.

So, FOR THAT GUY, the teenager, getting 40k Gil for the time he spent making that item is about enough, he simply doesn't care that much, he can make (or farm) more if he wants more cash. And he rather have the money ASAP than having to wait a day or 2 to sell that item. He won't log off after putting that in the MB to sell, he'll continue playing and there's stuff he wants to do with that Gil. Now, of course, for the Family Man with little free time, this seems outrageous, but that's what you get with the level of free market you have in MMOs. He who can play more dictates, the others get the short end of the stick.

[Arkista]

On the contrary, that would actually mean more people would undercut since they'd pay reduced tax fees for smaller sales.

They would lose money. There are people who live on the MBs. When they sell stuff they will undercut over and over until its sold. If we had to pay the taxes up front it wouldn't be nearly as bad.

As for Me I'm listing stuff the same price as what is already for sale. If I got 99 items I'll split them and they sell faster.

[Gillionaire]

snip

I've seen you quote that three times already,
While I agree with the idea, it's rather sophomoric and not as complex as you like to describe it. You didn't stumble upon some game changing interpretation of MMO Economics is what I'm trying to say, which is why nobody's giving you any feed back. We all know that already

Also, I don't understand why Psychology comes into it when time is already an established metric in Economics.

[Cirgellon]

This is all basic supply and demand...

[Synestra]

5000 is ridiculously overpriced

Tell this to my ARM prisms that i sold for 14.999k each few weeks ago and i had to craft newones non-stop just to keepup with demand.

[AlexionSkylark]

snip

Actually, that was a tentative rationalization on why prices in the MB and similar systems can be so erratic, and what is the underlying reason for people agressively undercutting and not caring as much about their profit margins.

[Gillionaire]

Actually, that was a tentative rationalization on why prices in the MB and similar systems can be so erratic, and what is the underlying reason for people agressively undercutting and not caring as much about their profit margins.

But your interpretation is inadequate.
I'm not arguing the point btw, I agree with what you said.
But most gamers already calculate currency/time to measure efficacy of their currency earning methods. Same goes for real life, people calculate their earning potential by salary per month or wage per hour. So I'm sure nobody doubts the value of time being a determining factor for prices.


But when it comes to why people undercut on the MB, there's usually more than just the value of time playing into the prices.
I don't undercut out of spite, I do it to maximize my profits, even WITH time factored in.
Usually, when people go into detail about what they're doing to make gil, especially with crafting, and they complain of people driving the price below the point of profitability, that happens because they're operating inefficiently. (buying a vendor mat from MB, using the more expensive token to trade in, using the more expensive seal to buy the item, etc.)

No amount of free time on your hands will make value of your goods go below the price of raw mats. Only case this happens is for overstock of items made during leveling where gil was not your main motivation.

i.e. If somebody gathered the materials for say, electrum ingot, there's no reason it would be priced below the cost of 4 electrum ores + 5 wind shards because the mats already have a decent turn around, there's no reason to.

Now, when it DOES happen, you have to try and find out why it's happening because if it is indeed priced below raw costs, it is not sustainable. There must be a very good reason somebody would do something so "irrational". You can attribute it to the ignorance of the other party and move on OR try to figure out the underlying causes of it.


If you know when certain items sell, in what quantities it's used by, what city your major customer base may be hanging around in, it all comes together to give you an edge.
Undercutting is just one of the numerous market strategies that exist in this game. I've sold far more items than competitors even when mine was priced higher due to taking advantage of the other aspects of the MB.

and that's why undercutting is not an issue, if undercutting becomes an issue for you it's either

a. Item has no demand, move on
b. Somebody's employing a strategy, identify it and see what you can do to counter it.

You say you don't care why it's happening? just list for average price and wait a week, it'll sell if there's demand.

[AlexionSkylark]

Actually I think you missed the point entirely.

It's less "out of spite" than it is because you don't attribute the same ammount of inherent economic value to each hour you spend playing as the person who doesn't log in as much. You don't see your goods as being undervalued in relation to the time you spent to make them (or to get your char up to the point you can make said item quickly), even with the massive undercut.

[Gillionaire]

Actually I think you missed the point entirely.

It's less "out of spite" than it is because you don't attribute the same ammount of inherent economic value to each hour you spend playing as the person who doesn't log in as much. You don't see your goods as being undervalued in relation to the time you spent to make them (or to get your char up to the point you can make said item quickly), even with the massive undercut.

But that's precisely my point.. I actually take time into account very much and at the end of the day my gil/time ends up being higher than people who insist on selling things for what they think is the "right" price.

It just bothers me so much to see people who are so afraid to invest into their gear/production so I try to make the point of systematic mass production and reinvesting to everybody I talk to about crafting and that's probably coming on a little strong on these forums. But it really bugs me to see people sitting on 10, 20, 30 million gil and still insist on waiting for the right time, going out to gather their own mats, etc.. When you have 30 million gil, you can just invest 20 of it back in and craft away, even with a little bit of undercutting, you'll still make a lot more than waiting for the right moment to sell that 1 item.


It's not that I value my time less than the other guy per se, I just use it more efficiently by cutting corners where possible, so my ROI on time still ends up higher than others.
That is the point I'm trying to make, most people that complain here about the undercutting on MB feel they're being driven below profit because they have so much inefficiencies.

[Tiggy]

Supply and demand in action!