Lets Talk About UNDERCUTTERS!!!!

[nyttyn]

As usual, folks are under the impression that undercutters have WAY more power than they actually do. The real power - the ONLY power - is in supply and demand. Undercutting is just part of the process by which the real value of an item is determined.

Why is a Thavnairian Bustier worth 2.5 million gil? Is it because of the cost of ingredients? Is it because a seller decided to list it at that price? No, both these are wrong. It is worth 2.5 million gil, because buyers are willing to pay 2.5 million gil for it. That is the demand. However, the number of people actually willing and capable of paying that much for a piece of glamour equipment is fairly small. As long as only a few piece of equipment are on the market, you can maintain the 2.5 million gil price tag. But as more and more items hit the shelves, supply begins to exceed demand. A Bustier that doesn't sell isn't worth 2.5 million - it's worth NOTHING. So, in order to sell, you lower the price. PERHAPS if you'd been patient, you could have sold at 2.5 milliion eventually - but it's just as likely that, instead, still more Bustiers will have entered the market at a price lower than yours.

The same rules apply for items less exclusive than high-priced glamour gear. An item sells for 50k, and someone else lists for 40k? If the demand is there, that 40k item will sell quickly and with no impact on the market, because the 50k items will sell, as well. If the demand isn't there, others will start to relist for 40k, and the item will fall to its new, proper price of 40k. Even if (especially if!) a player floods a market with low cost items, once those items run out the supply will no longer be there and prices will go up.

Even when wealthy folks try to "control" a market by aggressively pricing low to try to starve other players out - they can succeed for a short time. But, since there is no entry cost to enter a market (no need to buy a buliding, hire employees, etc) players are free to leave a contested market, and easily return as soon as the wannabe mogul starts pricing normally again. Monopoly-style tactics that are devastating in real life are fleeting at best in-game.

Supply and demand is the only power driving the market. Put all thoughts of price-gouging, price-fixing, and undercutting out of your mind. The most anyone can do is cause a ripple or two in the pond. The level of the water is not something any individual can change for long.

that argument doesn't really work.

there are far too many people with an extremely poor grasp of economics whom flood the market with supply at prices that are legitimately far lower than what people are proven and willing to pay. which is something you rarely, if ever see in a true supply: demand model because, obviously, nobody wants to burn money. it's impossible to actually argue about supply and demand when the source of supply is unrealistic.

i mean you can like or hate undercutting but you can't argue they have no power on the items traded with any degree of of a constant basis, b/c undercutters are unrealistic as fuck in how low they'll sell things for in this game (literally hundreds of thousands of items sold for less than vendor price, for the most infamous example of this).

[sirDarts]

that argument doesn't really work.

there are far too many people with an extremely poor grasp of economics whom flood the market with supply at prices that are legitimately far lower than what people are proven and willing to pay. which is something you rarely, if ever see in a true supply: demand model because, obviously, nobody wants to burn money. it's impossible to actually argue about supply and demand when the source of supply is unrealistic.

i mean you can like or hate undercutting but you can't argue they have no power on the items traded with any degree of of a constant basis, b/c undercutters are unrealistic as fuck in how low they'll sell things for in this game (literally hundreds of thousands of items sold for less than vendor price, for the most infamous example of this).

If someone is selling for a very low price, they usually don't have too much of the item and just want to get rid of it = they don't influence the market in the long run. AND if they are actually selling for lower than the cost of materials, just buy them out and sell for actual amounts, you will save gil and time, they will sell what they want to sell, everyone is happy.

[Dimitrias]

Just remove the ability to see eveyones actuall price and let us only see price history, then bid and randomly get someones or nothing until you bid high enough for the item.

I liked the old ffxi ah much better than ffxiv's.

[Billeffingmurray]

Isn't a regulated free market contradicting? How can you have a regulated free market? Wouldn't that make it a controlled market?

There is no actual life-threatening result to be had from an unregulated in-game market. Thus there is ZERO reason for regulation, just let the natural flow of supply and demand do its job.

Regulation already exists in the market in the forms of subsidies (the paltry sums of gill you get for completing quests and the like), npc merchants (should be driving prices down for certain items also available on the market), and also undercutters (bringing down the price of over inflated goods). Un-regulated free markets never turn out well. Ex: history (Latin America in the 70's, Russia in the 90's, America in 2007). Lucky for us this market isnt as complicated as RL. I'm not necessarily saying SE needs to do anything, but if your mad that the market is dropping underneath you it might be time to adjust your prices to meet the market. Regulate yourself. %1500 profit is unsustainable

[sirDarts]

Regulation already exists in the market in the forms of subsidies (the paltry sums of gill you get for completing quests and the like), npc merchants (should be driving prices down for certain items also available on the market), and also undercutters (bringing down the price of over inflated goods). Un-regulated free markets never turn out well. Ex: history (Latin America in the 70's, Russia in the 90's, America in 2007). Lucky for us this market isnt as complicated as RL. I'm not necessarily saying SE needs to do anything, but if your mad that the market is dropping underneath you it might be time to adjust your prices to meet the market. Regulate yourself. %1500 profit is unsustainable

As you said, it regulates itself.
There is no need for any outside regulation. If it grows too high, nobody will buy it, and they will have to go down. If it's too cheap people will stop getting profit and they will give up on the low side.

There will always be extremes on both sides, but I see little reason to deny that possibility by any form of regulation.

[nyttyn]

If someone is selling for a very low price, they usually don't have too much of the item and just want to get rid of it = they don't influence the market in the long run. AND if they are actually selling for lower than the cost of materials, just buy them out and sell for actual amounts, you will save gil and time, they will sell what they want to sell, everyone is happy.

doesn't work for servers like sargantanas where you have a huge population. there's simply too many people who are willing to tank the price - they simply overwhelm via numbers, gradually eroding the price in spite of anything you may attempt to combat it.


note this isn't for things like thavanian bustiers going down to sane prices people are willing to buy, but basically every non-ephemeral stone, every item that can be gathered or crafted without super time gated mats getting crashed to absymal prices. even clusters can get driven down to incredibly low prices if it's a particularly bad day.

[sirDarts]

doesn't work for servers like sargantanas where you have a huge population. there's simply too many people who are willing to tank the price - they simply overwhelm via numbers, gradually eroding the price in spite of anything you may attempt to combat it.


note this isn't for things like thavanian bustiers going down to sane prices people are willing to buy, but basically every non-ephemeral stone, every item that can be gathered or crafted without super time gated mats getting crashed to absymal prices. even clusters can get driven down to incredibly low prices if it's a particularly bad day.

If the price is tanked so low that it's not worth selling, don't bother. Easy as that. Craft or gather something that IS worth selling.
If the supply is that high, the demand has little to no way to be up there as well, so adding more to it is just not worth it.