Extreme Undercutting - Should it be a violation?

[Raim]

I'm the opposite. If anything I'd like people to be forced to undercut more than 1 gil. I hate scanning through listings to see dozens of 1 gil undercuts that people just sit at the board all day relisting. I'd prefer they made it so you have to undercut an item by at least 1% if you're listing under the lowest price, and make it so you cant constantly take items off and relist them, at least not without some kind of fee.

[Coratanni]

But here's the thing, people have put forward the reasons why, so I'm in agreement now that it shouldn't be an offence, but the mods won't close/delete it for some reason even though I've asked them to.

Sometimes your Thread just needs to be a warning for others.

[Pells]

That doesnt work all the time. There are players who do absolutely nothing but crafting and will put up another just as it sells

If they can keep it up indefinitely then the price was too high to start with.

[Nixxe]

If they can keep it up indefinitely then the price was too high to start with.

That's not actually true. It simply means that the demand isn't high enough to overtake their ability to acquire materials in whatever manner allows them to do that. They could just be selling things at cost or perhaps they're farming the mats themselves and selling the item at under cost because they don't understand that farmed items were not free. They could even take a loss on it, but simply be making money back elsewhere that keeps them from realizing it.

[kikix12]

That's not actually true. It simply means that the demand isn't high enough to overtake their ability to acquire materials in whatever manner allows them to do that. They could just be selling things at cost or perhaps they're farming the mats themselves and selling the item at under cost because they don't understand that farmed items were not free. They could even take a loss on it, but simply be making money back elsewhere that keeps them from realizing it.

You say that "they're farming the mats themselves" and then that "they don't understand that farmed items were not free"...This is illogical.

Farming materials themselves does, indeed, make materials free. You don't spend any gil on that. You can then proceed to sell those materials and turn your "time investment" into money directly, or you can use them to craft something and then sell that.

In real life, large companies do indeed start producing their own stuff for sale. Look at any large shop brand. They have their own brands, because every step between harvesting resources and selling the finished product that you do yourself (on a large scale), the lower the costs. And the lower the costs, the more you can undercut competition that buys equivalent products for sale from others, thus being more attractive to the consumers without actually losing the profit margin. In a game it's just so extreme since there is literally no cost associated with your own gathering-resources and crafting portions at all (other than your time, of course).

[Furious]

You say that "they're farming the mats themselves" and then that "they don't understand that farmed items were not free"...This is illogical.

Farming materials themselves does, indeed, make materials free. You don't spend any gil on that. You can then proceed to sell those materials and turn your "time investment" into money directly, or you can use them to craft something and then sell that.

In real life, large companies do indeed start producing their own stuff for sale. Look at any large shop brand. They have their own brands, because every step between harvesting resources and selling the finished product that you do yourself (on a large scale), the lower the costs. And the lower the costs, the more you can undercut competition that buys equivalent products for sale from others, thus being more attractive to the consumers without actually losing the profit margin. In a game it's just so extreme since there is literally no cost associated with your own gathering-resources and crafting portions at all (other than your time, of course).

They don't do it because it's free; they do it because the opportunity cost is smaller than the actual cost.

Your parenthesis contains the entire crux of the argument; your time has intrinsic value in that doing something means you aren't doing something else.

Ironically, you are the perfect proof of exactly the quote you claim is illogical.

You say that "they're farming the mats themselves" and then that "they don't understand that farmed items were not free"...This is illogical.

[Zojha]

Your parenthesis contains the entire crux of the argument; your time has intrinsic value in that doing something means you aren't doing something else.

That's a calculatory cost however, not a real one. Which leads to fun results:
Let's say you have two activities. A brings in a net 1 gil. B brings in a net 3 gil. Both require the same amount of time/effort/materials/PropertyPlantEquipment/whatever

In reality, you gain 1 gil every time you do A and 3 gil every time you do B. But if you account for opportunity cost, you are actually losing 2 gil every time you do A, because you could have done B with that same effort instead. That means that even though you are gaining money at a steady rate, you are making calculatory losses. These losses however do in no way compromise your ability to gain money - You can keep amassing them indefinitely, because you are still gaining money in reality.

[Furious]

That's a calculatory cost however, not a real one. Which leads to fun results:
Let's say you have two activities. A brings in a net 1 gil. B brings in a net 3 gil. Both require the same amount of time/effort/materials/PropertyPlantEquipment/whatever

In reality, you gain 1 gil every time you do A and 3 gil every time you do B. But if you account for opportunity cost, you are actually losing 2 gil every time you do A, because you could have done B with that same effort instead. That means that even though you are gaining money at a steady rate, you are making calculatory losses. These losses however do in no way compromise your ability to gain money - You can keep amassing them indefinitely, because you are still gaining money in reality.

I'm trying to do some mental gymnastics to determine any way in which the two are different. The only difference is that you don't have to have the capital beforehand to farm the items; in every other way, the outcome is the same. You lose 2 gil for every unit of time you spend doing A rather than B. You can define it however you like; that is the real world outcome of that action.

[Princess_Momoka]

They don't do it because it's free; they do it because the opportunity cost is smaller than the actual cost.

Your parenthesis contains the entire crux of the argument; your time has intrinsic value in that doing something means you aren't doing something else.

Ironically, you are the perfect proof of exactly the quote you claim is illogical.

The problem with this post is you assume people know how to value their time, most do not know how to do that. This is even more true when someone simply gets said item because they where lucky doing 1 run for WT.

[Paladinleeds]

The problem with this post is you assume people know how to value their time, most do not know how to do that. This is even more true when someone simply gets said item because they where lucky doing 1 run for WT.

Therein lies the heart of the issue. I'm a maths person yes, but that's raw maths, not economics. So the nuances that come alongside the economics escape me. And economics are a quite difficult thing from what I can see, so it's easy to understand why most people don't get it. I understand things a little better thanks to the mature discussions held in this thread (yes, there has been mature discussion here alongside all the not so nice responses), but I'm still far from truly getting it. And then when we account for those who don't use the forums, this information would not be brought to their light as easily, so unless people speak with them about it, it keeps the knowledge gap in circulation.

And then, there's those that don't wish to pursue max profit, and as such, they would gather everything themselves, craft everything themselves, etc. If they don't factor their time into the cost (let's say they don't consider it worth paying for their time, because they're not pursuing max profit), it does lend credulence to the undercutting. That being said, the supercrafters, who can farm them out non stop, will be able to beat them on economics of scale.

As for the WT edit you added in, that definitely plays a part of it too. But, i think the economics of scale would help balance that out.