What is an item worth?

[IndigoHawk]

Opportunity cost is important for a crafting business. However, many items are not produced by crafting businesses.

Instead, items are waste products. The low level crafting economy is mostly a service that sells crafting xp. Players purchase raw supplies to level crafting. They dump crafted goods. They mine for xp and dump ore.

Dumped goods compete with businesses. Businesses can't compete without profits, so they close.

The xp service economy depends on new capital and new players to produce items, because xp is the primary profit from producing items. Items are worth even less gil than the OP suggests: they have no gil value, not even repair costs. Severe undercutting will remain rampant.

The goods have some value to the players who want to buy them, but it would take a real business to find a competitive and sustainable price. That won't happen if the market remains saturated with dumped goods.

[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.

[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.