Deflation hits

[UggokTerrisThule]

Aid Grimel completely destroyed tradeskills.

[Rendael Brigh]

I don't think they should EVER make GM tradeskill requirements for anymore quests.
They just turn and show their fanny to us real business people and say tough luck....."You are in our world now".

[Ndaara]

Shawl quests and aid grimel quests = bad for tradeskills

earring of the solstice quest = good for tradeskills

how come the folks programming EQ do not see this?

or if they do, why o why did they think aid grimel would be a good idea? if they thought it was a nice reward for folks who already did their tradeskills, they didn't pay attention during the shawl craze.

Straight from Tom Peterson:

*tap tap tap*
"WAKE UP! WAKE UP!"

(and Gloria too)

ps: for all you econ majors out there (i am not one but my RL husband is), please do not confuse EQ economy with RL economy. Yes there are similarities. No you cannot apply everything you know from RL to EQ. sorry it just doesn't work the same

[Kingbobb]

As far as economic principles go, there really isn't that any difference in EQ that I've been able to see from "classroom" economics. EQ's "market" behaves just like my college professor's models about "gun 'n butter" or "schmoos" did. It's just that EQ's market isn't the same as the RL consumer market, so trying to apply what works in RL to EQ is going to run into some translation problems. But the basic ideas of supply and demand are very much evident in EQ, and like any other market, drive concepts like price, producer entry and exit to various markets, elasticity, etc. etc.

[andyhre]

I am not just an economist, I am an antitrust economist, who studies cartels and alleged cartels.

The one thing I want to add for now to this is that it is entirely rational for a would-be cartel to use the threat of "punishment" to deter a would-be price cutter. If you think someone's price is too low and that you envision them being a long-term player in the market, letting them "bleed off" their supply is only going to encourage them to come back and do it again. making it clear that you can and will make it unprofitable for them to engage in a price war (i.e., you will make sure the price goes well below their profit point and you have enough supply to outlast them) can, in the right circumstances make sense.

Better yet (unless you live in a country with antitrust laws), you can actually communicate in EQ and tell them: I will bury you if you go below this price, so don't. Then, if they try to "cheat" on the cartel, you have to show them you mean it by following through.

And, with minor exceptions, I am convinced that supply and demand work just fine in EQ and just the way they are supposed to work. You do have to include the cost of time in the equation. People with 1 spiderling silk sell for less than those with 100, not because increasingly supply increases price (it ought to decrease it), but rather because by supplying 100 at a time, you are costing the person X platinum and MUCH LESS time. There is a premium in EQ for large quantities of key inputs, such that one merchant can sell 100 of something for more than 100 merchants can each sell 1, even at the same time. You can ask yourself if you would race around the bazaar for 100 spiderling silks at 1pp each, or buy all 100 from a merchant at 2pp each. As the value of time goes up relative to pp, (e.g., as RL means less time for EQ or when you go up in level and get more pp per hour of fighting, having higher opportunity costs), you will pay the 100% premium for the one-stop shopping. But if time were ignored (like many Econ1 textbook problems do), it makes less sense.

Of course, another key item is the cost of a skill point. Components like cinnamon sticks sell for a lot more than pixie cinnasticks, b/c no one makes the latter for any reason other than for the skill up and then they sell the output as a waste by product. If the Aid Grimel is turning sickles into a waste by product, it will certainly make it harder to keep the price up, even with a cartel of GM smiths.

[Mdaisy]

Deflation hits

Another factor not mentioned here is that there is no degrading of the products we sell.. So 4 years ago when I started making plate armor that armor is still in use somewhere today as if it were just made. The longer a product stays in game the lower the price it demands as the more of them are in the game.

This is happening all over in all tradeskills except baking... baking the items are used up and the demand stays pretty constant.

Sure I can make money as stated above on NEW items, but after a couple of months they demand is no longer there and the prices will drop so we can clear out the inventory for hte next NEW Item.

Sony needs to make it so that items wear out and have to be replaced after a while. Then we will have a profitable market to work in as smiths.

[kiztent]

Originally posted by Ndaara
Shawl quests and aid grimel quests = bad for tradeskills

earring of the solstice quest = good for tradeskills

how come the folks programming EQ do not see this?

Maybe, possibly, they have more to worry about than the tradeskill community?

Solstice earring was a bad quest. Plain and simple. You may have made profit from it (which is why you call it good), but it was bad for itemization and bad for tradeskills.

There was no such thing as item dumping to ruin markets before the solstice earring. The Aid Grimel price inflation on raw materials is comparable to the PotC item raw materials price inflation. I'll let you decide if that's a good or bad thing for tradeskills.

Aid Grimel may have been the coup de grace, but Solstice Earring was the first nail in the coffin.

Originally posted by Ndaara
Straight from Tom Peterson:

*tap tap tap*
"WAKE UP! WAKE UP!"

Uh, yeah, try looking at something more than your bank account before making judgements.

[Axterix EnObelix]

Solstice earrings really have one problem. The parts are too easy to get. So a lot of people used that and the demand as a means to skill up. Not to mention it offered the hope of profits. But it is still those with an interest in the skill doing the skill upping.

Aid Grimel and shawl quests, on the other hand, are considerably worse. They turn a tradeskill into a time sink. They force people with no interest in a tradeskill to up it to get an item they want. That's wrong. Instead of having dedicated players who raise the skill and help others, you've got people that just want to reach the magic number and will do whatever it takes to get there as quickly as possible.

Aid Grimel should be completely rewritten. It should encourage people to seek out people with high skill, not to get high skill themselves. It should encourage trading, not skilling.

[Zacatac]

Solstice earrings did something else as well, they provided a huge plat sink. Just like horses, T-boots and Tink-bags; Solstice earrings costs 1,000's of plat to make and much of it goes straight to a vendor and that money gets removed from the economy.

[Aauminki]

The problem with counting oppertunity costs on time invested is exactly what I hinted at in my first post. People value their time differently, if someone does tradeskills because they enjoy doing it and not for the pp-profit, you'd be hard pressed to make them go below their profit point, because it is essentially 0 - of course this isn't rational behaviour and will probably never be a long-term major player in the market.

Aid Gimel and Solstice Earring quests are very different in their impact on the tradeskill market as the components for the Solstice Earring are all tradable, whereas the Aid Gimel quest requires everyone to GM their tradeskills.

It's basically two things happening, although they are interconnected:

1. People skilling up on items that used to sell at a premium sell them at cost or lower than cost just to clear their bank (sickles, robes, etc)

2. It would stand to reason that some of the people having sunk tons of plat and time into GM'ing tradeskills that wouldn't have bothered otherwise might want to cash in on their investment, now that the initial entry barrier is breached by the time/plat being already sunk.

The first one is the most immediate "problem" that tradeskilling cartels/oligopolies now face and there's no solution that will let them keep the supernatural profit they've been enjoying for so long (since SE quest introduction, more or less).

The more disconcerting change is item 2 above, which basically erodes the power of the current cartels/oligopolies since so many new players will be entering the market long term prices on all tradeskill items will fall as there is no increasing market to absorp the increased supply.

As if the falling sales prices weren't enough, tradeskillers will likely have to deal with increasing raw material prices as well due to the higher demand for those items, both due to 1 above in the short run and 2 in the long run, until more suppliers enter the market - if the ressources are not already fully exploited (24/7 camping of rare bits, etc).

[Reflan]

"It's a bit ironic that you advocate a mobster-strategy where you both lose money in order to force prices back up when all that's going to happen is an increased longer-term supply which you (the market) will constrict at a too high price (from market equilibrium)..."

1. Losing money isn't always necessary, but I can weather it for the long term gain of both myself and others in the very same market. The reasoning was clearly explained.

2. Supply isn't necessarily affected. The process of crashing out an undercutter can take very little time. The same amount of product usually comes into and out of the market; it is just sold at different prices for a short period of time.

3. I don't care if the price is eventually high. That in fact is my stated goal. If it is too high, of course, whatever that could possibly mean, not only will I be delighted, but the price will eventually fall back down. Not that I'm in any hurry that it does. What I was talking about was forcing individual market crashers out so that the long-term health of the market is ensured, though the short-term can get nastier.

I do not want to wait for market crashers to get tired of their game. Losing money for an indeterminate length of time at the rate that others see fit is not my idea of market efficiency. I want to put them off their game and make them sick of it. I take the initiative when I can to preserve profits. And I will do it as soon as I can if people decide to try to destroy my profits.

Having at various times had almost the entire market for many different tradeskilled items, from food to drink to pottery to smithing items, I'm about as experienced as you can get on these things. I've probably sold more of quite a few tradeskilled items than most anyone on my server, and I didn't do it by either lowballing on the one hand or pursuing unsuccessful strategies on the other.

Economics majors are great in the classroom. But they don't necessarily make good businessmen.

Andyhre addresses well what I am talking about. The 140 tae ew tempers I had stored up, for instance, carried a lot of potential to influence a market. I husband that kind of power carefully to keep the market in a state best conducive to my profits; but if someone screws around, I can mess with him so much he finds something else better to do with his time. And then everyone in the market starts making money again.

[andyhre]

The problem with counting opportunity costs on time invested is exactly what I hinted at in my first post. People value their time differently,

If everyone values everything the same, there can be almost no trade. The essence of trade is that different valuation of stuff. I value 2pp less than 1 spiderling silk (in part b/c of how I value my time, in part b/c of what I can do with that time instead of killing spiderlings). You value the spiderling silk less than 2pp. So you sell it to me.

If we both value the spiderling silk identically in terms of platinum, we can trade, but often markets will dry up b/c now only trade will happen between who are indifferent -- I value spiderling silk and 2pp equally, so I'll trade or not, whatever. Hard to devote a lot of time to making trades where you don't feel you are gaining at all.

So the fact that we value time differently is what drives a lot of the bazaar's sales. A few items are simply out of my reach. Some are class restricted. but then it is a matter of time value (e.g., as a Ranger, I can't make viscous mana, but I could, if I wanted to take the time, make an enchanter and get it up to 12th level and make the stuff. Instead, I prefer to devote that time to my main and get platinum while playing and just buy my viscous mana). And then a lot of stuff, like spiderling silk and leather padding, is open to everyone to farm or tailor themselves, but many people prefer to pay others to do the work for them. In this case, the only reason I do this is because to me, my time is worth less than the platinum I can earn and the only reason they buy it from me is because their time is worth more.

[Everguide]

Really?

A little ironic isn't it?

[andyhre]

I'm not sure what the irony is.

[Kingbobb]

Reflan, the risk in your action is that by lowering the price, you risk "educating" the buyer market, meaning that if you lower your price to drive an undercutter out of the market, the buying market may start to percieve that the item you're now underselling has a lower value. And other sellers may perceive this as well, and end up lowering their price as well. The end effect is that the market value of the good will have fallen, and mostly due directly to your aggressive competitiveness.