Can we agree that in WoW, 1 copper is utterly trivial? Good. Note that I won't say the same for Guild Wars 2, which so far isn't throwing piles of gold at me, though that's with the condition that the game is young and so is my character.
I don't mind price competition. I do mind time competition.
If I post first, I lose. The next person to come along can undercut by one copper, the agreed-on utterly trivial amount, and they get the sale. I could pre-undercut and post at a copper less than I would have otherwise, but the next person in line can take a copper off of that. I try two less, and he does three less, and so on. Over many, many iterations we'll see the price drop by several silver. Wow, competition sure is... not bringing down the price by any significant amount.
The person undercutting me isn't truly competing on price. 1c is trivial. It has only one big effect: sorting the AH puts his goods higher up and therefore likely to be seen and therefore purchased first. The effect isn't price competition, but time competition: he is able to get his goods listed higher because he got to the market after me.
Obviously if he were undercutting by silver per item and we were dealing with large volume stacks, then it's not so trivial. This isn't about that.
Thankfully, GW2 has a buy order system. Buyers can put up an offer for items which are filled as items come in. As a seller I can enter a market knowing what buyers will pay. Even better, I know that they are and will pay that. If I post an item at an offered price it is guaranteed to sell.
Of course this only applies in a high-demand market. If there are many sellers and buyers aren't around then it will look much like a WoW AH market: gradually descending prices as everyone tries to get something. I avoid those markets. As a buyer, I've found myself facing a similar situation of gradually descending prices from which I can pick the lowest or post my own offer and hope someone comes along to supply at that price. Conversely, if it's a high-demand market and I'm buying with few sellers, then I'm stuck putting in an offer and hoping the next buyer doesn't bump it up slightly.
Any market system has tradeoffs and offers different benefits at different times, so don't take this post as me suggesting that the GW2 trading house is superior to the WoW AH. While I think the offer system and cross-server aspects are great (smooths out prices and activity), I think WoW has a better interface, though I'm sure some of that is merely due to learning a new system.
I don't mind price competition. I do mind time competition.
If I post first, I lose. The next person to come along can undercut by one copper, the agreed-on utterly trivial amount, and they get the sale. I could pre-undercut and post at a copper less than I would have otherwise, but the next person in line can take a copper off of that. I try two less, and he does three less, and so on. Over many, many iterations we'll see the price drop by several silver. Wow, competition sure is... not bringing down the price by any significant amount.
The person undercutting me isn't truly competing on price. 1c is trivial. It has only one big effect: sorting the AH puts his goods higher up and therefore likely to be seen and therefore purchased first. The effect isn't price competition, but time competition: he is able to get his goods listed higher because he got to the market after me.
Obviously if he were undercutting by silver per item and we were dealing with large volume stacks, then it's not so trivial. This isn't about that.
Thankfully, GW2 has a buy order system. Buyers can put up an offer for items which are filled as items come in. As a seller I can enter a market knowing what buyers will pay. Even better, I know that they are and will pay that. If I post an item at an offered price it is guaranteed to sell.
Of course this only applies in a high-demand market. If there are many sellers and buyers aren't around then it will look much like a WoW AH market: gradually descending prices as everyone tries to get something. I avoid those markets. As a buyer, I've found myself facing a similar situation of gradually descending prices from which I can pick the lowest or post my own offer and hope someone comes along to supply at that price. Conversely, if it's a high-demand market and I'm buying with few sellers, then I'm stuck putting in an offer and hoping the next buyer doesn't bump it up slightly.
Any market system has tradeoffs and offers different benefits at different times, so don't take this post as me suggesting that the GW2 trading house is superior to the WoW AH. While I think the offer system and cross-server aspects are great (smooths out prices and activity), I think WoW has a better interface, though I'm sure some of that is merely due to learning a new system.
9 comments:
I'll agree with you on the advantage of a buyer's offer as well as a seller's offer but I'd love to see another MMO add the geographic AH system that exists in Eve. Arbitrage really isn't my thing but why not include it for the people who want it? Actually, I can think of several game design reasons but it would still be interesting to see a fantasy game that included pack horses, player-owned ships, and the like.
Of course, like the previous post on crafting, I have to wonder about the overall value of most of this in an NPC-driven economy.
@rimecat: It cannot be added only "for people who want it". A segregated market would drive up prices overall. Locally we'd see some things priced higher due to scarcity while overall we'd see higher prices due to the arbitrage 'tax'.
I don't think a mainstream MMO would benefit from players being stuck with markets where they are either undersupplied or paying extra for someone to ferry it over from another auction house.
Implementing this in Guild Wars 2 would cause all sorts of other problems. Since banks are universal, the transfer process would not involve anything more interesting than a few clicks. Breaking up the banks would mean breaking the "deposit all collectibles" system. That would in turn cause bag space problems, given that players gather such a wide variety of materials, or they'd be constantly using waypoints to and from cities, which I don't think sounds like any fun at all.
I'd not yet say that GW2 has an NPC-driven economy, given that it is players who do the gathering and crafting with only minor contribution and gold sinks from NPCs.
When I buy from the WoW AH and I see a series of trivial undercuts [glyph sellers are especially bad with this] I always buy the trivially most expensive one, just out of principle.
Why not borrow a mechanism from reality?
When a seller places an item on AH, he or she may choose to pay an "advertising fee" to auctioneer NPCs (which can be from 1 copper to goldcap). Buyers will see items listed in the order determined by the amount of advertising fees paid. It will not be possible to sort them by price.
@Coreus: I've done that occasionally.
@Ephemeron: It's bad enough that in real life we have physical barriers to the information needed for a truly free and efficient market. Why would we go out of our way to do the same in a game? GW2 avoids this problem a bit due to, at least currently, one copper not being entirely trivial (though I'm sure that will change). Perhaps a better mechanic would be to have standardized undercuts based on the price of the item, such as 1%. Sorting would then be done by price and then first to post. That would still give some advantage to later sellers, but they'd have to be passing on a non-trivial cost advantage to the buyers.
Klep, I do understand basic economics and trade theory, the "if they like it" comment was for people who actively engage in arbitrage. It is dead boring to me but some people do enjoy it. I'd like the market diversification effect but I do agree that most people would not.
On GW2, it is definitely an NPC-driven market. The NPC sets the floor for auctions with what will be paid for an item and the ceiling on other items with the sale price. I have not played out of the starting zone yet so I'm not sure on the higher quality items (above blue). If they are not available as quest rewards, NPC sale, or random drop that will be more of a player-driven market but the NPCs will still influence based on what they will pay for the item.
@rimecat: So we're in agreement that "if people like it" doesn't work because the 'market diversification effect' spills over to cost everyone who doesn't enjoy arbitrage?
Setting a price floor hardly makes it "NPC-driven". Influenced, certainly, but not "driven". Even that grand experiment in a player-driven economy, EVE, has some NPC influence.
I think you are missing the point. I see no reason to buy a blue weapon in the starting zone as I receive them as drops, rewards, or buy for karma. I think they called it karma.
If that stays true in the later zones then blue and lower quality weapons will have their prices set by what the vendor offers. I hope the quality never goes above blue for these items as that would permit a market for crafting higher-tier items but I don't know that and I'm honestly not interested enough to try and find out until I level there.
@rimecat: There are green-quality vendor items, at least that's what I've seen so far at level 40 (though in lower-level zones).
Keep in mind that karma has multiple uses, so that for example, crafters will need some for their crafting, so that the vendor items are not effectively free. Furthermore, karma items cannot be refunded while drops and crafted items can be vendored, so that drives up the net cost, even if the up-front cost seems low.
I've found it worthwhile to buy from other players since I am usually in lower-level zones and the vendor items and random drops are proportionally less useful. This seems to be a happy accident caused by the downleveling which allows players to quest in a wider variety of zone levels, so that I'm more free to wander, but also have reason to buy from other players.
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