The value of worthless crap

| Sunday, April 25, 2010
If I added up all the gold I've spent on getting Insane in the Membrane, I imagine it would be tends of thousands, maybe even into the hundreds. Of this, almost nothing has gone into anything which actually benefits me: no flasks or gear or anything which would help me in any normal sense of progression. Clearly this means that all this gold was wasted. I couldn't have possibly valued the title at over a hundred thousand gold. That's a lot! Even a goblin would consider that worth remembering, and they'd certainly not spend it on a title. Those are for socials!

I believe the title, or more accurately, the process of acquiring it, was not worthless. For this, I propose the Backwards Theory of WoW Economics.

We're all familiar with supply and demand. We assume that with a stable supply, demand is the primary driver of price.

In my experience this isn't at all true. Instead it is the other suppliers who determine price. Not directly, it's not as if I have to follow their lead. But their actions, or inaction, are what determine the price I pick.

I propose that in the backward economic world of WoW, the primary decider of the price of a crafted item is not determined by demand for the item or material costs, but instead by how bored the crafters are that day.

Bored crafters mean less competition, meaning a higher price. Active crafters do the reverse. Sometimes they reach an equilibrium, a temporary one, in which crafters are becoming interested and bored/frustrated at a similar enough rate that prices reach a stable point. Then someone hits the gold cap or buys whatever they wanted and leaves and the other crafters have a field day. Or a few new people wander in and start undercutting because they think materials are free; next thing the price crashes, the noobs think they're rich, and they leave.

In practical terms, what does this mean?
The grind made me into more of a crafter, a scribe to be specific. It added another person buying all those low level herbs, and mid-level herbs, and high level herbs. That encourages people to farm, bringing in actual value to the economy, rather than just grinding dailies. Or maybe it just helped a lowbie pay for training. Either way, it made another person better off and a more useful player. It also resulted in a lot of excess inks, which I found little market for as ink, but as glyphs, I made a decent bit of gold, and since mine sold and the other guy's didn't, I clearly offered a better price.

The Darkmoon cards were probably the most expensive portion of the grind, at least initially. I made dozens and dozens of these, ranging from the lowest ones that can be turned in with a summoned quest NPC to the expensive Nobles cards. As I sold either the decks, trinkets, or gear from the low level ones, I realized something: there was next to no competition. People just were not making the lower level decks, or were not selling them, either way, there was an empty market waiting to have value added to it.

A burnt out or failed scribe was 'bailed out' by me, being overwhelmed with worthless cards and trinkets and inks, she sold me tons of them at 10-50% the market price. Some I was able to combine into more cards and glyphs, others I resold over time. My presence turned what was on the verge of being vendor trash into thousands of gold for her, and even more for me.

I said initially that the Darkmoon cards were the most expensive. That was initial costs. In the end I made a profit from all the crafting and selling I did. I still have cards and decks to sell off, so I estimate a few dozen thousand more gold to come. Or I could try to dump them on another insane person and carry on the cycle.

Did you know there's an ogre disguise? It's true. They're rather obscure though, coming from a goblin captured in the north wing of Dire Maul. I was the sole source of those for a long time. Maybe still. What is the value of turning into an ogre? Well, clearly something, if people gave me gold in exchange for ogre suits.

I sound like I'm tooting my own horn. That's because I'm an amazing person. Okay really it's because I'm trying to back up my inverse theory, to show that just by motivating people to participate in the economy, even if it's not for anything useful, will ultimately be productive.

Then there was my early gain from Steamweedle rep, no longer being attacked on sight by goblins. Turns out they get mad if you kill thousands of their fellow guards. What socials!


We Fly Spitfires said...

"I sound like I'm tooting my own horn. That's because I'm an amazing person."

LOL, brilliant :D

Anonymous said...

and now that you have stopped.
That poor burnt out scribe has lost her income
If what you have done is truely create an azerothian stimulus package - then we need a report on how their gold was spent further bolstering the economy.

Klepsacovic said...

@We Fly Spitfires: I know.

@Pugnacious: It was a set of deals, not an ongoing transfer. I believe she used the funds to switch professions. Doubtlessly that gold has now trickled down, creating much crafting along the way.

Chelm said...

I always thought the people actually adding value to the economy ARE the daily quest grinders. They're the consumers and the main source of server income. Everyone else is just shuffling the wealth around.

Klepsacovic said...

Chelm, gold does have some innate value, meaning its not a true currency, but it tends to be on one-time uses. As I think I showed earlier, the economy doesn't need many dailies. A few here and there will balance out AH fees and repair bills when combined with vendoring.

It is materials which we need to craft: for gear, enchants, gems, flasks. These are more useful than yet another mount.

Gold is only as useful as what you can buy with it.

Chelm said...

I hadn't thought of it that way. You're completely right. The number of daily quest grinders just increases the total gold in the economy (inflation).

Essentially, along your thought lines, a stack of Abyss Crystals doesn't cost (arbitrarily) 500 gold, it costs a steady percent of the total gold on the server. The more gold that exists increases the purchase price of the item, but not its percent usefulness in the economy.

If there were twice as much gold in the economy, it will cost 1000g as opposed to 500g, but you can sell the same number of stacks of Saronite ore to be able to afford that 1000g.

In short, you're right :) Sorry for the ramble.

Klepsacovic said...

There is some value to that inflation. Imagine if there was a tenth as much gold. Prices could drop so low that useful trade materials were worth more to vendor than to risk the lost deposit on the AH. This happened with frozen orbs, though that was due to low demand and high supply, rather than inflation.

Here's a good example: disenchanting low WotLK items. Below a certain point the vendor cost is higher than the market price of the enchanting mats. Plate, mail, and non-epic weapons have this problem.

So more gold can help to keep mats flowing, but I don't know if we've ever been at a point where a low gold supply was the problem.

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