Thread: Things to address in 2.0: Open Descending Price Auction will not work

Thanks for reading over the post, I know it was long.

I think that, as you say, the frequency of undercuts will, without doubt, decrease. And where the successful seller will keep their prices stable so long as they remain successful is without question accurate as well.

Now, my point here would be that though the undercuts would decrease in frequency, they would increase in severity to compensate. However, let's assume they don't and that we're successful in slowing the downward trend in prices. My question would be: Is that good? Now, good is often too subjective and to avoid confusion we can qualify who it is good for. If we want to be really extreme and focus specifically whether or not it is good for you, a producer in this case, we can narrow the question fairly well.

So the new question is:

Is your suggestion beneficial to you specifically or producers in general?

My answer would be no. By implementing this suggestion, specifically returning to the hidden prices, I would say you are actually working against your own interests.

Consumer vs Producer View
If you hold the idea that producers are separate from consumers, then you might think that your suggestion would help producers gain more of the consumers' wealth. By keeping prices higher, the producers would gain more gil and therefore become more capable of purchasing the things they need or want; albeit an arbitrary decision in favor of the producers.

My Argument
I personally reject the reasoning of the Consumer vs Producer view for two main reasons. First, arbitrary decisions in favor of one group or another are detrimental to the very foundation of a free market system. Secondly, I reject the idea of there even being two classes of Consumers and Producers separate from one another.

Most of this will likely sound familiar, but I can try to elaborate better. Now, I don't consider there being two classes in the economy. All consumers are producers, and all producers are consumers. In order to consume, you must produce. And you only produce so you can consume. Production is only a means to an end, and the end is consumption. So, when something is gained from the consumers in favor of the producers, an injury is done to the consumers; but, because the producer only produces to consume, the producer is injured as well.

Now, suppose you do not consume a thing, and you are a great productive force in the economy. Naturally, you would seek to maximize the value of your production, so you may think undercutting decreases that value. If you eliminate undercutting you believe you have gained some advantage or benefit. The problem is, while you gain now, your purpose in production is not solely for the accumulation of the gil; no, your purpose is to use that gil for some consumption for yourself. At that point in the future, all the gains from the higher prices will be matched in the higher prices of future consumption.

I'd like to add a little more to some other points, but not enough time at the moment, I'll make another point addressing other issues.

But really what I want to get at is... the idea of undercutting, which seems to be a focus for a lot of people. Many people dislike it, and no doubt it is annoying when you are undercut and your sales suffer. My main point that I'd like to get across is, undercutting is good for everyone; and, the faster those prices reach equilibrium, the better. I can back that up, but not enough time at the moment.

I really disliked FF11's system, having to try and buy an item over and over just to hit the correct price was a waste of time.

I much prefer what we have at the moment with 14, yes undercutting is an issue but not a big enough one that I would want to go back to 11's archaic design.

I wanted to add on to what I said earlier about undercutting, and I think this post Jinko just made allows me to further demonstrate two points I've tride to make so far.

Originally Posted by Jinko

I really disliked FF11's system, having to try and buy an item over and over just to hit the correct price was a waste of time.

I much prefer what we have at the moment with 14, yes undercutting is an issue but not a big enough one that I would want to go back to 11's archaic design.

Specifically, the hidden prices are a hinderance to economic activity in general. Such things do nothing to help promote economic activity and production, but they are very good at slowing things down. But, to Jinko directly, the change to price history you suggested, only showing the price history when selling or only showing the average price, would be just as much of a hinderance.

Now the second point is this idea of under cutting and whether or not it is an issue. Undercutting is generally only necessary when supply exceeds demand. In other words, when, at a certain price, there is no longer anyone who wants or needs it available, the only possible way to sell the excess supply of items is by lowering the price. By lowering the price you might be able to reach people who still need or want that item, but only if the price is lower. When the price is low enough that the entire supply is able to be sold, this is called equillibrium. Undercutting is the natural way for prices to come down and reach equilibrium.

But, there is a type of undercutting that, as I see it, is more like a game. When you take two producers competing for sales, they might undercut each other by 10 gil. And let's say that every hour they check the prices and keep undercutting each other. Player A checks at 30min mark, while player B checks at the 1 hour mark. And each 30 mins one player undercuts the other. If supply exceeds demand, and each player contains an equal degree of determination, neither player will successfully sell all their goods. They will continue to play this game until finally one gives up entirely.

If you think you have the patience to outlast someone, you may be interested in playing this kind of game. However, if you're smart, you will recognize playing this game requires a great deal of time; time you could be spending making more gil. So, whether you have patience or not, there is really one thing you want to do: Beat the competition.

Rather than play the game of undercutting, price lower than you normally would. If you're selling things for 50,000g and it costs you 25,000g to make them, try selling for 30,000 or even lower. I'd suspect your competitors might no longer bother producing, and when their supply is liquidated or removed from the market, guess what? You become the only supplier, and because demand likely hasn't changed, you can raise the price again - maybe even higher than 50,000g. But if it only costs your competitor 5,000g, and they start selling for 10,000g, you ought to consider shifting into producing something else.

An open auction system where the final sales price is visible is the only one, as Roaran has amply shown, in which there can be actual equilibrium prices. Sales and selling only works* when there can be reasoned self-interest at play, i.e. where a seller can decide how much something is worth, and where sellers decide how much something is worth, and then the "actual" price is finally decided when all of the items are sold at the lowest price the sellers will accept and the highest price necessary to sell all of the items.

If there is a surplus of items, and a surplus of individuals wanting/needing those items, that defines a selling system that is broken. In my opinion, a selling system where items don't move for hours/days/weeks/etc. is one which creates virtual, if not actual, surpluses. In my opinion, the problem with the OP's requests and argumentation is that s/he is calling for a system that rewards sellers who sit on surpluses until buyers come along who are willing to pay the prices that they decide. This behavior is called a cartel system, and every free market system in the world abhors this behavior (rightly so).

*works is defined, in my opinion, by a system that avoids surpluses.

Originally Posted by Roaran

By a hinderance I mean this. Information once readily available, by arbitrary action, is then, not concealed, but reduced in accessibility. So, in order to obtain the information you used to, you now have to go through extra effort to obtain.

Quite the opposite IMO.

The information we need as sellers is in the wrong place which is causing the hindrance.

I'd suggest you price substantially lower.

No because I'm not interested in playing the market game and in doing so ruining market value of items.

I just want to sell my item for what its worth.