What is an item worth?

[Roaran]

Value is subjective and trades are made on perceived value.

If you have a ham sandwich and and I have a turkey sandwich, and let's say we each perceive the other's sandwich as more valuable. The reason we have a difference in perceived value is because we have differences in tastes. Each party trades and each perceives they have benefited. This is the foundation of mutually beneficial trade.

If you translate this to the FFXIV economy, you have a darksteel haubergeon and I have a Vanya robe, and I am a DRG and you are a WHM. Because of our circumstances we perceive different benefits from possessing each item.

The price of a particular item, it is important to note, is set by the seller on the expectation or probability of a purchase. The probability of a purchase is determined by the potential buyers. Furthermore, the actual purchase is dependent upon not only the perceived value or utility of the item to the buyer, but also the perceived value or utility of all the other uses of the gil that would be used in the purchase.

Just because something requires 10 hours to farm it does not them mean it will be worth 10,000,000 gil. It could be useless and noone would purchase it. Only when someone perceives it as valued for that amount and they cannot gain any greater satisfaction using that gil in another way will that item be priced properly at 10,000,000 gil.

[Wazabi]

=off topic=

Try this perhaps: "Walmart wages are so low...

1. Why do they still want to work at walmart? Can't they find a better job? Or is there a low demand for their skill level? Where were they working previously?
2. Imagie you work for a company that tells you your annual bonus and pay increase has been donated to starving children in Africa.

There are many more arguments that I can make. Ultimately, it dwells down to this: If you are a low skilled worker, would you rather be unemployed or employed with however little wage you get? If there is a demand your your skill set, you will get a better wage. If you demonstrate that you can do more, you will get a better wage.

I deal with similar blue coller wage problem in my work...the pay is never enough...in the end...if you're still only capable of doing what you could do 5 years ago, then I'm paying you the same wage, adjusting for inflation.

I agree that low wage is a problem...and that needs to be addressed through other means than simply saying ban wal-mart. It's a naive and uneducated solution to a more complex problem.

Similarly as how Zigkid puts it, economic efficiency looks at a much broader picture and it involves some complex mathematical calculations fitting to be a PhD thesis. And in the case of a price level increase, wage level usually lag behind especially for unskilled labor. This price level increase hurts and perpetuates the poverty that they are in...and it is usually the unskilled labor that are in poverty.

=In-topic=

Value is subjective and trades are made on perceived value

You might also add that the value of a certain item has a concave utility curve: If you have none, you'll be willing to pay more for the first one...when you have a lot, you'll be willing to pay less for that.

[L33K]

Supply vs Demand!

i try to buy as cheap as possible unless am desperate

[Hwasung]

I'd like to thank everyone who took the time to reply to this thread. Aside from several derails due to the evils of Walmart people stayed mostly on track and I think this thread can serve as a useful item in the forum archives for people with similar questions.

I'd like to particularly thank those who took contrarian views and argued them out and those who rationally and calmly explained their opinions.