Auction House functions are differen than those of a market. When debating between the two systems it is important to identify and clarify which respective aspects are necessary or unique.
In order to be an actual Auction, the actual price of the transaction must be something of an unknown. The idea is to give the sale to the highest bidder. The very nature of the prices being unknown is NOT something you want to have as a general rule. So by and large, Auctions are bad for all MMOs. To consider them as the basis for transactions is simply foolish.
That said, there is still a use for Auctions in general. Auctions are better suited for those rare items whose prices is not really determined by it's steady and continuous existence in the market itself. So, implementing an Auction House as a supplement would be a welcome addition, yet it is not a necessary one.
A "Market" is a place or system where goods are exchanged. The actual exchanges can be made directly for other goods or services or simply a form of money which is then always exchanged for other goods or services.
The Market is the most superior form of exchange. However, the implementation of the market itself will determine how effective it is.
This thread I made awhile ago is still the best solution yet.
Retainer Reference System
What you need in a market is - Freedom, Flexibility, and Access. Freedom to choose (from whatever you are capable of) anything you want to do to make gil. The flexibility to shift production to meet the needs of players. And being able to, without arbitrary hindrances, to provide a means with which production and needs are both in equilibrium.
The Retainer Reference System, for which I provided the link, can be implemented in many many different ways or degrees, but it needs a few things.
The Referencing of all items across the entire World (of all Servers would be even better) that are flagged available for sale by players. The ability to readily and effeciently compare and purchase items for known quantities of gil or some other item. And the ability to purchase items and place items for sale from a single terminal or menu.


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