Free Market

[Utumno]

I played a test on the market today... To see what was going to happen with a medium priced item (120 Archery) To the rich it is simply cheap to the middle class it is a decent item to obtain.. to the poor, of course it is insanely over priced.

I have no difference of an item priced.. I sell to who ever is buying for the price I want. Most people on this server will taunt you on what price it should be so in the future their price is a guarantee! This is common.. If I wish to sell a price below theirs. They will be upset.. I understand. If the price is a going rate and it is not the rate of said person.. Then "oh well" (In my case) If the market is going to overwhelming sell for half the price of set persons personal rate then I understand but if its selling for three quarters the rate and it barely sells then it is in fact a deflated item.. If you dont like it. Take it up with your group of sellers of the same Item.. If you dont have a group.. Shushhh...

I believe in free market.. If you dont like it.. tough noodles! You can buy or gather goods and sell them and make a decent profit by doing so. If you buy and sell then your in a toil of hardship if you try to buy/sell with my idea of a free market... there is and will never be a set price of an item as long as I can buy and sell the same item your trying to sell with a set price.. It will never happen.. Now today was just a experiment. But since some of us have the money to do so.. Buy and sell for what the people of this server want.

Have a nice day!

Utumno~

[Deorum]

I did a similar thing and only offered X amount of money for a GoC. Sure enough I had a seller who was willing to sell for a significant chunk under what "the going rate" was. For myself, as a 3 month-old player on the shard, the difference between 3 and 4 million is significant.

[Ilsanor]

The problem is people undercut by a margin that is usually not what free market would dictate. In real life you have certain monetary obligations (bills, mortgage, food, material costs, wages, etc.) to pay so a business owner cannot go below a certain price threshold since it'd mean he's not making profit. In UO there are no such obligation. You can earn 20m a month or 20k a month - there is no pressure (other than your own ambition) to force you to earn any given amount. So you can basically sell everything at 1gp - it didn't cost you anything to get it except time, so any price you put on an item is the price you put on your own time basically.
Now, if the price for a given item is 1m then selling yours at 950k, perhaps 900k, is something that would be right in a free market. Selling it for 500k would not. At least not consistently. Basically you're hurting (or undervaluing) yourself and in the long run (if you continue your underpricing) everyone who are in the same business. Because you make their time less valuable as well.
I used to believe in fair competition here on Excelsior, but if people have enough money to basically give away expensive items then that's not competition. It's one of the reasons that I quit (mostly) the resource gathering business. There will always be someone who doesn't care, who will drop the prices to the level where I prefer hunting balrons rather than mine or lj.

[Asmodean]

Well said Ilsanor. Another way to look at it, is with a real life example. If someone offers to pay you $10 an hour, and you tell them no, you'll do the work for $5 an hour. Next time they hire someone, they want to pay them $5 an hour, even if the going rate *should* still be $10 an hour. You not only hurt yourself, but everybody else down the line. Lets not turn this into a political discussion about minimum wage, but its there for a reason, even if some people think it shouldn't be.

Like Ilsanor said, there is no sense of 'loss' or profit margins really in UO, just what you value your own time at. This is also why a lot of business in real life go out of business. They don't price according to what they are worth, and then can't afford their bills, so have to close up shop. Cheaper is not always better. We don't have bills in UO, but if we did, i bet all these people undercutting each other so fiercely wouldn't still be in business.

You're right Utumno, its your time, and you can sell for whatever you want. Just think about how much you're affecting not only your own profits, but everybody else's as well who does the things you do. If everybody did this, we would have a much healthier economy, in my opinion.

[Utumno]

The problem is people undercut by a margin that is usually not what free market would dictate. In real life you have certain monetary obligations (bills, mortgage, food, material costs, wages, etc.) to pay so a business owner cannot go below a certain price threshold since it'd mean he's not making profit. In UO there are no such obligation. You can earn 20m a month or 20k a month - there is no pressure (other than your own ambition) to force you to earn any given amount. So you can basically sell everything at 1gp - it didn't cost you anything to get it except time, so any price you put on an item is the price you put on your own time basically.
Now, if the price for a given item is 1m then selling yours at 950k, perhaps 900k, is something that would be right in a free market. Selling it for 500k would not. At least not consistently. Basically you're hurting (or undervaluing) yourself and in the long run (if you continue your underpricing) everyone who are in the same business. Because you make their time less valuable as well.
I used to believe in fair competition here on Excelsior, but if people have enough money to basically give away expensive items then that's not competition. It's one of the reasons that I quit (mostly) the resource gathering business. There will always be someone who doesn't care, who will drop the prices to the level where I prefer hunting balrons rather than mine or lj.

Actually this is what im talking about... I posed a dramatic cut in real time to see what the "Demand" was at.. it never sold heh.

Instead of a sellers market where they say "this is the price no matter what!" have the buyers show the power of how the seller sells.. Sometimes it is needed to dramatically cut the price. Because of deflation. But it works just the same in the other direction. No complaints from that point of view lol.. Yes this game has no overhead of real life economic practices. But im not comparing rl to this game. now if I were to.. Look how this game is set up. Its free... if you "Want to" you can "Donate" for it.. depending on the demand on game play. Or "Time" in my case. It is starting at 1gp lol up to whatever in a HUGE difference of demand for product..

Just saying... My Idea of free market IS "Gradual" up or down depending on demand. But may include a spike depending on Demand and inflation. If there is none of that item for sale make your own familiar of last sale price... Its not that hard to get the data!

[Utumno]

Well said Ilsanor. Another way to look at it, is with a real life example. If someone offers to pay you $10 an hour, and you tell them no, you'll do the work for $5 an hour. Next time they hire someone, they want to pay them $5 an hour, even if the going rate *should* still be $10 an hour. You not only hurt yourself, but everybody else down the line. Lets not turn this into a political discussion about minimum wage, but its there for a reason, even if some people think it shouldn't be.

lol you punished your own statment

Like Ilsanor said, there is no sense of 'loss' or profit margins really in UO, just what you value your own time at. This is also why a lot of business in real life go out of business. They don't price according to what they are worth, and then can't afford their bills, so have to close up shop. Cheaper is not always better. We don't have bills in UO, but if we did, i bet all these people undercutting each other so fiercely wouldn't still be in business.

I had my own business... believe me in RL Im a ##$#@@# << hehe when it comes to charging for lockouts or safe openings.. Automotive is my forte' In game there isnt the masses of people wanting a item or service. So it is deflated and inflalted monetarily wise all the time.. for the most part on bigger items its not. Read my previous post... I must of mislead a bit because I sharply cut the price out of test theory.

You're right Utumno, its your time, and you can sell for whatever you want. Just think about how much you're affecting not only your own profits, but everybody else's as well who does the things you do. If everybody did this, we would have a much healthier economy, in my opinion.

I do it with the Ingot market.. I undercut by .1 or 1 depending on price margin.. im no economic analysis. but I know what im doing with this one type.. its simple numbers. Heres my theory on just the ingots market... Ingots is equivalent to gasoline. Would you mind gas prices going down at your pump? Im not selling cars just the gas.. You can sell the cars all day long {No not ethreal horses lol} Ill keep selling the gas (:

[Asmodean]

lol you punished your own statment

What?!

I had my own business... believe me in RL Im a ##$#@@# << hehe when it comes to charging for lockouts or safe openings.. Automotive is my forte' In game there isnt the masses of people wanting a item or service. So it is deflated and inflalted monetarily wise all the time.. for the most part on bigger items its not. Read my previous post... I must of mislead a bit because I sharply cut the price out of test theory.

So if i moved to your town, and started undercutting you, lets say by half for the sake of argument, you would be ok with that? Even if after i packed up and moved on, cuz i was only in it for the quick buck, and people would only pay half what you normally got before i showed up?

I do it with the Ingot market.. I undercut by .1 or 1 depending on price margin.. im no economic analysis. but I know what im doing with this one type.. its simple numbers. Heres my theory on just the ingots market... Ingots is equivalent to gasoline. Would you mind gas prices going down at your pump? Im not selling cars just the gas.. You can sell the cars all day long {No not ethreal horses lol} Ill keep selling the gas (:

As a consumer(buyer), i would love the lower prices. It would be silly not to. As a seller, it would upset me greatly, because that would mean i was losing money. And then when i lowered my prices, you would be losing money, and it would keep going until one of us went out of business, or we both reached some point where we were content, and scraping by at a level we were comfortable with, rather than raking in the cash at. If something sells for 25 gold, at a good pace, why would i want to sell it at 20, or 15? With just two people its not an enormous issue, but when you have 20 people, all undercutting each other, it adds up quickly.

Price wars create buyers markets, which is great for the consumer, bad for the sellers. It also puts less money into your (the seller's) pocket, so when you want to buy something, it takes that much more work to get it, since you have to sell more, since you are making less.

Take this example: If you wanted to buy something that cost 25 million gold, which is roughly the cost of a re-layer at 50,000 gold per ED, and were selling ingots at lets say 50 per, you would have to sell 500,000 ingots. Now, if i come along, and sell those same ingots for lets say 40, (which becomes the new standard) you would need to sell 625,000 ingots to get the same amount. You look at it like you made 25,000,000. I look at it like you lost 1,250,000 gold. (125,000 ingots more you had to mine, and selling for 10 gold less). The same thing happens with big ticket items. Only difference is bigger numbers all at once.

edit: i used a difference of 10 to illustrate my point, and for nice even numbers. Even a difference of 1 gold on something so commonly traded as ingots adds up over time to millions of lost gold. A difference of 1 gold in my example would lead to having to mine an additional 10204 ingots ((25,000,000 / 50) - (25,000,000 / 49)).

How long does it take you to mine 10204 ingots (5102 ore) an hour? two? So every relayer takes you that much longer PER ONE GOLD less you charge. Even if you don't use re-layers, every 25,000,000 gold takes you an hour or two, or however much longer than it needed to if you price matched, instead of undercut by 1 gold.

The more times stuff is undercut, the longer you have to work for your goal, whatever that number is, and that's why undercutting is bad for everyone.

[Ilsanor]

But im not comparing rl to this game.

Free market is a real life mechanism.

What you protested against - the people trying to set a global price on items is, personally, a good thing for me. It is an almost unconscious mechanism to fight the deflation spiral that we've dropped into recently. While fortunately we cannot reach the end of the spiral just because there is unlimited supply of gold, we can and will, eventually, reach a point that doing anything other than farming gold in any of the areas (Balrons, Umbris, whatnot) is not profitable for the seller. And this in turn will discourage players who now do other things.

What always make me cringe is the "I lower the prices to help new players" mantra. Yeah, it does have it's merits in a very narrow array of items that newbies actually should have easy access to - spellbooks, starter pets, low level equipment etc. Low prices on anything else only hurt said newbies. For one it changes their mindset in setting a standard "everything's cheap and easy to get". While it is not and should not be. Artifacts, GoC's, powerscrolls, etc. are mid-high level items they are supposed to expensive and hard to get. Just because a newbie does not have millions of gold doesn't mean the prices should be brought down to the level he deems appropriate. Besides, I think that is one of the reasons that people don't stay long on EX - they accomplish 90% of the game goals in a month or two (GoC+ gear for example) because of the low prices and then there is only one goal - relayers. Which (due to the semi-fixed price) seems to be an unreasonably distant goal. We taught the newbies that they can get everything fast, cheap and with as little effort as possible. And *now*, at the relayer level, we want them to actually *work* for something? "Bah, I'm leaving". I guess the current approach to newbies makes the gear (and goal) progression too exponential.

Another thing is the price of resources. Back when I started, many post-rat quest newbies (me included) made good money by supplying various raw materials. Ingots, wood, granite and other misc items were a viable source of income for those who either couldn't or didn't want to go hunting. I remember opening of Sgail (and its quest(s)) that made the price of certain resources skyrocket. With some prices reaching over 100 (or even 200) per item it was easy for any newbie to grab an axe or a shovel and go make some money. Some people fail to realize that newbies do not buy raw resources, only advanced players do - those that have the money to do so. So if you really want to help the newbies - keep the prices up or pay more for what they offer.

[Utumno]

I said what i was here to say.

I dont want to continue arguing on.. You both make excellent points and i'm not denying it. Ill do what I do and Ill be happy.. Mining is about it btw.. I dont buy and sell normally.

See you in game

[Ilsanor]

Kinda sad to start a discussion only to say "I'll do whatever I want anyways." Makes a man think twice before arguing anything else next time since it's a waste of time and keyboard.

[Asmodean]

I thought the same thing...