#134 - June 30, 2014, 2:41 p.m.
Flipping does not increase any price, in fact, without flippers sell orders could be higher, if you don’t understand this, then you don’t understand how it works, plus with the gold sink it creates its actually helping reduce inflation, which is good for everyone.
Sorry for my spelling
yeah… no. How, in gods name, should people who buying cheap and selling expensive help keeping the prices down? It makes no sense.
When a player adds velocity or liquidity to a market, the result is often lower prices and often prices closer to equilibrium.
Given recent feedback let me try also this in other terms (I’ve tried this before and failed so bare with me).
Supply and Demand curves can also be called Willingness to Pay and Willingness to Sell curves. Essentially they are the shape of what people are willing to pay or how much people are willing to sell for. If everyone is will to pay $5 then the “demand” curve would be a flat horizontal line at $5.
In real markets the curves end up being curves because people have different preferences or costs. I might be willing to pay $100 for a new video game and you may be willing to pay $50 and yet another person $30. When you extrapolate this out you get a smooth curve of what people are willing to pay (it works the same way for the willingness to sell).
Balance (or equilibrium) occurs when those two lines meet, and people are willing to pay the same amount people are willing to sell. This price is decided by the market as a whole. Given the “freeness” of our market in GW2 people can sell for more or less than this price. In a textbook this would never happen because people always want to be in that balanced state. In real life though, especially in video games, people have different preferences outside of that market equation. Time is a major factor of this equation in real life. Imagine you could instantly sell items to a vendor for 1 gold or you could place them on the TP for 1gold 5 silver; some amount of player would be willing to sell straight the the vendor and save the time because their preference for time or convenience makes that a good trade off for them and that’s awesome, people should be allowed to make that trade off if they want. Now let’s say people instead just place everything on the TP for super cheap instead of vendoring because it’s easier. The prices these items are placed at are often placed below that equilibrium price which leaves room for someone to purchase those items and sell them at equilibrium price earning some profit per item. The person who purchases and resells values that trades and so does the individual selling easily, in this case both parties match what they want. Now the market has items placed at the equilibrium price for the standard buyers/sellers that sell at that equilibrium. Those sellers cannot change that equilibrium price and placing items above that price will result in the items not selling. They cannot raise the price, the market has decided the price and other people have decided their willingness to sell.
The first question to ask here is, “Isn’t the profit of the reseller directly equivalent to how much people are willing to trade off money for time or other preferences?”
The answer is yes, and more than that, the potential profit is split between all the different individuals attempting to buy and resell. Since the profit is finite and will become distributed between players, why wouldn’t people begin doing that until everyone only made little to no money? If everyone was the same person they would, but there must be some barrier to entry to that activity, there must be something that stops people from jumping in and distributing some of that profit to themselves. The most common and the most correct (but not complete) is that it takes time and skill, if it did not there would be almost no profit in the activity because the potential would be split between too many different individuals.
(Hello again econ and business people, I’m aware that this is very simple, but I’m attempting to introduce people to the ideas and attempting to explain complex concepts right away turns out poorly)
