I fully agree that there are many factors at play and that we all try to simplify things, because we don't want to write an economic thesis here. But an MMO is much less complex than the real world and you also downplay key aspects to favor your arguments about price inelasticity:Now, MMO economies have something of a problem here that stems from the nature of what people are trying to buy and sell. For MMO commodities, in particular -- things like crafting materials -- demand is inelastic (it is relatively insensitive to movements in price) because there are no substitute products that people can switch to if the price of the product they want is too high.
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That type of market gives the power of setting prices to sellers. It does not lead to efficient pricing. There is not an ultra competitive selling environment where everyone can see what everyone else is charging and buyers can take it or leave it, forcing sellers to compete with each other on price.
I don't think it makes sense to continue the discussion, if you still believe that prices can be arbitrarily set by resellers without impact from the demand side - all evidence to the contrary. I'm not claiming that the balance is perfect or that it's a buyers' market out there. But there is a reason why every trading guild advises its newer members to only flip with money they won't miss. It's easy to miscalculate and end up with items you can't resell.The best way to combat inflation is to limit the practice of reselling goods at a completely fictional price, or better end it completely.
I don't think it makes sense to continue the discussion, if you still believe that prices can be arbitrarily set by resellers without impact from the demand side - all evidence to the contrary. I'm not claiming that the balance is perfect or that it's a buyers' market out there. But there is a reason why every trading guild advises its newer members to only flip with money they won't miss. It's easy to miscalculate and end up with items you can't resell.The best way to combat inflation is to limit the practice of reselling goods at a completely fictional price, or better end it completely.
We can probably agree that ZOS should provide better price transparency for everyone, so players don't have to rely on external add-ons any more. That would shift the balance a bit more towards the buy side. Still, thanks for the debate and all the best!
I fully agree that there are many factors at play and that we all try to (quote removed only to keep the post shorter)Now, MMO economies have something of a problem here that stems from the nature of what people are trying to buy and sell. For MMO commodities, in particular -- things like crafting materials -- demand is inelastic (it is relatively insensitive to movements in price) because there are no substitute products that people can switch to if the price of the product they want is too high.
[...]
That type of market gives the power of setting prices to sellers. It does not lead to efficient pricing. There is not an ultra competitive selling environment where everyone can see what everyone else is charging and buyers can take it or leave it, forcing sellers to compete with each other on price.
I have been following your pretty entertaining discussion with great interest and even learned something from it:
from now on I won´t ever buy or sell stuff via guild trader, because either I sell at said "market value" set by flippers, or I sell below that amount and feed flippers' purses. I´m not about to play that game of yours anymore as I really despise greed. Practices such as flipping shouldn´t pay off and I´ll never have a part in it doing so again.
thx 4 the lesson
Credible_Joe wrote: »I have been following your pretty entertaining discussion with great interest and even learned something from it:
from now on I won´t ever buy or sell stuff via guild trader, because either I sell at said "market value" set by flippers, or I sell below that amount and feed flippers' purses. I´m not about to play that game of yours anymore as I really despise greed. Practices such as flipping shouldn´t pay off and I´ll never have a part in it doing so again.
thx 4 the lesson
Aren't guild traders a direct counter to the flip problem?
Sure, you can use TTC to find flippable stuff, but it's a job of work. Constantly refresh your price tables, run back and forth across Nirn to snatch up that cipher listed at 10g with no guarantee that someone else won't just physically beat you to it.
Fragmenting the player economy and tying it to physical locations across the map makes it much more resistant to player manipulation. Especially bad actor manipulation; gold farmers are still in business. With a central auction house, any troll that buys gold can tank the economy in a few clicks.
With guild traders, they have to do it one trader at a time, and I'm sure there are measures to detect someone like that attempting this kind of attack. So it potentially doubles as a gold-buyer & troll detection system.
Flipping still works to an extent, but it's reduced from something that can be carried out by anyone with enough gold to something that has to be done opportunistically.
Not to mention the value of real estate. And I'm not talking about snapping up the best spot at a crafting hub, I mean the value of small and medium sized guilds at roadside guild traders. Those traders always have stuff at off-market prices, and you never know what you'll find there.
So if you really want to resist the flip game, don't bother with prime real estate traders. Shop with the little guys at cross roads, and non-capital cities and towns.
Funny, I was thinking the same about your post initially, but decided that was the wrong mindset. So I engaged with your comments and even found some agreement with your arguments of price inelasticity. You can of course choose to act like all this is beneath you. So I agree, there is no real point in engaging if the only response is a condescending "go read a textbook"Look, there is so much incoherent in this response that there's no real point in engaging with it. I don't mean to be rude but you are taking accepted and widely discussed economic concepts such as elasticity and substitution and giving them completely wild definitions to suit your purposes / pretending that they do not mean what they mean, possibly because you do not understand them. If you want to talk about supply and demand and what elasticity means, it's worth getting a textbook.
Funny, I was thinking the same about your post initially, but decided that was the wrong mindset. So I engaged with your comments and even found some agreement with your arguments of price inelasticity. You can of course choose to act like all this is beneath you. So I agree, there is no real point in engaging if the only response is a condescending "go read a textbook"Look, there is so much incoherent in this response that there's no real point in engaging with it. I don't mean to be rude but you are taking accepted and widely discussed economic concepts such as elasticity and substitution and giving them completely wild definitions to suit your purposes / pretending that they do not mean what they mean, possibly because you do not understand them. If you want to talk about supply and demand and what elasticity means, it's worth getting a textbook.Good luck to you!
Credible_Joe wrote: »
Aren't guild traders a direct counter to the flip problem?.
Credible_Joe wrote: »
Aren't guild traders a direct counter to the flip problem?.
As I said before, I think guild traders makes it easier to flip since the flippers only need to control the market in popular locations instead of everywhere and once they have control, they buy from the lesser populated guilds to resell at the higher ones that they do control. Plus, since you need to be in a guild to sell stuff (without using zone chat that is), it's much harder for more lesser social players and new players from taking part in the market so there's just less people that flippers have to worry about. Also, the price for acquiring a guild trader NPC constantly going up also takes part of inflation and crazy trader guild rules and what not.
Credible_Joe wrote: »
Aren't guild traders a direct counter to the flip problem?.
As I said before, I think guild traders makes it easier to flip since the flippers only need to control the market in popular locations instead of everywhere and once they have control, they buy from the lesser populated guilds to resell at the higher ones that they do control. Plus, since you need to be in a guild to sell stuff (without using zone chat that is), it's much harder for more lesser social players and new players from taking part in the market so there's just less people that flippers have to worry about. Also, the price for acquiring a guild trader NPC constantly going up also takes part of inflation and crazy trader guild rules and what not.
I really hate the term "auction house" because I'm sure that no one actually wants that but just one place to immediately buy their items instead of an auction.
I really hate the term "auction house" because I'm sure that no one actually wants that but just one place to immediately buy their items instead of an auction.
This is what I was talking about when I said Auction house in my original post. Auction house was probably the wrong wording for it but I was thinking one giant store if you will that holds a handful of guilds in it. You search "dreugh wax" and you can see what's available to purchase from those guilds instead of traveling from zone to zone to zone looking for something specific. No bidding, just straight purchasing. Think of it as a giant flea market, lol
kringled_1 wrote: »On supply and demand people are trivialising a very complex economic subject to favour whatever argument they happen to be making.
It is not the case, in most markets in the real world, and certainly not in ESO, that buyers simply pick a price that they are happy to pay and therefore that all markets are absolutely fine because you stuck the word "market" in the description.
Markets arrive on prices set, usually, by sellers, not buyers, based on a whole litany of concepts, including price elasticity of demand. That is, how much a buyer can or will pay before they won't buy a thing at all or will substitute it for another.
In theory, for most goods, people will move away to substitutes or never buying something at all as the price increases. So sellers may push the price up to see what they can get away with and -- in theory -- buyers will progressively walk away forming a neat line on a graph along which sellers realise where the right price to make the most money (and not to lose it) lies. Again, in theory, sellers have to be alive to the behaviour of buyers or they will not be able to sell.
Now, MMO economies have something of a problem here that stems from the nature of what people are trying to buy and sell. For MMO commodities, in particular -- things like crafting materials -- demand is inelastic (it is relatively insensitive to movements in price) because there are no substitute products that people can switch to if the price of the product they want is too high.
You cannot swap one type of tomato for another when cherry tomatoes, say, reach an outrageous price, because the only type of tomato available in the game is cherry tomatoes. There is only one rosin, there is only one dreugh wax, and so on.
Put to one side that no one ever "needs" anything in an MMO. It's a video game. But a great deal of what is sold in ESO has no substitutes. There is only one of that type of product, and you buy that product or you buy nothing.
That type of market gives the power of setting prices to sellers. It does not lead to efficient pricing but the pricing that allows sellers to make the most money.
It is what it is. That is how most MMO economies function. And because many players who buy are also players who sell, it can normally proceed without too many problems because those players are insulated from what, in the real world, would be called hyperinflation.
But people need to stop saying "it's supply and demand" as if this was some sort of clever and definitive resolution to any argument. It isn't. Supply and demand in an economy set up the way ESO's is doesn't work in the way being claimed. It creates a seller led market. Denying that simply is not persuasive. It looks self-serving and plain untrue.
And in ESO's economy, particularly, there are real problems with the way supply and demand function. The guild trader set up means there is a lack of price transparency; people cannot see, especially on console, what competing prices are so it is hard to tell if they are being ripped off.
But also, as I've mentioned previously, because selling is gated behind a trading structure that many players will not engage with, you do have a whole section of the playerbase who are exposed to all the problems that arise from seller-led markets and are not in a position to keep track with the way prices behave.
So, yes, you can say "this is supply and demand". It is. But that does not mean that it is a properly functioning, competitive market. It is how supply and demand behave in a market afflicted by serious problems. As an argument that all is well and no problems exist to be addressed, saying "it's supply and demand" is completely meaningless and suggests a deliberate failure to think about how the economy actually works.
While there aren't substitutes for a lot of rare goods in ESO, there is absolutely an alternative players can go to: farm goods themselves. Wax/rosin/temper are all things that every player in this game can obtain, if they choose to spend their time doing so. Unlike the real world, there's not an enormous overhead cost to doing so.
It's so time consuming to have to run to each and every zone checking every trader for a specific piece of gear when we could have a auction house in a major zone where multiple guilds can list items. You could even make 3-5 Auction Houses spread across Tamriel to hold multiple guilds as to not bog down one single zone. Just something that would make shopping/selling a lot easier in my opinion
Warhawke_80 wrote: »Meh I could care less now..I refuse to use Guild Traders, so I trade with friends' and folks I know in game
Which is a ridiculous number of people lately we all hang on a Discord (One of the channel's is In-Character which can be a hoot) and I can usually find whatever I need in less time than it takes to trave to a Guild Trader, if you do it that way buying can be downright affordable in ESO.