What's driving prices?

[Kalach]

Searching through the forums, I've seen a few discussions over the past months about the economy and prices. I'm trying to understand what has prices set at where they currently are. Since we can harvest and make most things ourselves, the main drive for prices should be what players are willing to pay, and what NPCs are willing to pay.

 

FEs for example can be sold to an NPC for 3GC each. Few people are going to sell FEs to a player for 2GC each, just because they are a player.

 

HEs, though, are priced at 6-7GC each. Someone checked the Magic Store for me, and reports that the magic store will buy an HE for only 3GC. So that's not the driving force. Players have repeatedly stated that HE's seem expensive, so that doesn't seem to be what's driving either. Is it so much of a sellers market that the sellers can charge what they like? That seems odd, because people can learn to make HE's themselves, and many people are reporting thats what they do.

 

So what is driving prices? Minerals and Ores seem overpriced to me, but perhaps they are NPC driven (Is Harvy a troublemaker?). Would the economy look different if we eliminated all NPCs? Or are we setting our prices ourselves, and then just complaining about them?

[Atlantis]

You make way too many of these threads...

[Kalach]

You make way too many of these threads...

 

Probably. I'm trying to learn and understand things, though, and this is the best way I know to gether other peoples experience.

[Infamous]

asking in-game would be a good way too ;p

[Kalach]

asking in-game would be a good way too ;p

 

Not sure who I would ask who could give an anwer. #jc 4? Not a good place for this type of discussion, in my experience.

[Jamol]

we have kinda talked about this over and over and over. do some searching

 

http://www.eternal-lands.com/forum/index.p...24624&hl=market

 

http://www.eternal-lands.com/forum/index.p...21099&hl=market

 

http://www.eternal-lands.com/forum/index.p...20993&hl=market

 

there are many more.

[Kalach]

we have kinda talked about this over and over and over. do some searching

 

http://www.eternal-lands.com/forum/index.p...24624&hl=market

 

http://www.eternal-lands.com/forum/index.p...21099&hl=market

 

http://www.eternal-lands.com/forum/index.p...20993&hl=market

 

there are many more.

 

 

And in every conversation I've seen (I've skimmed through them) the conversation has centered around large ticket items, rather than the most basic components. Why is sulfur 2gc? Why is fur 1gc? Why is meat 5 gc? You can't adjust formuals to these things. None of the suggested changes to formulas are going to make a hill of beans as long as players are artificially charging meaningless prices because that's what they charge. These discussions seem to just assume that things are certain values.

[Jamol]

And in every conversation I've seen (I've skimmed through them) the conversation has centered around large ticket items, rather than the most basic components. Why is sulfur 2gc? Why is fur 1gc? Why is meat 5 gc? You can't adjust formuals to these things. None of the suggested changes to formulas are going to make a hill of beans as long as players are artificially charging meaningless prices because that's what they charge. These discussions seem to just assume that things are certain values.

 

All of these things are free market prices we set the prices if ppl want to buy them at our price that is wonderful. If they dont sell we lower the price. You know basic supply and demand.

[Mister_Q]

i think Kalach is doing a great job here. trying to understand our economy and Maybe trying to find a solution for that economy that everyone bitches about all the time.. so be gratefull..

 

doing a great job there kalach

 

Q

[Kalach]

And in every conversation I've seen (I've skimmed through them) the conversation has centered around large ticket items, rather than the most basic components. Why is sulfur 2gc? Why is fur 1gc? Why is meat 5 gc? You can't adjust formuals to these things. None of the suggested changes to formulas are going to make a hill of beans as long as players are artificially charging meaningless prices because that's what they charge. These discussions seem to just assume that things are certain values.

 

All of these things are free market prices we set the prices if ppl want to buy them at our price that is wonderful. If they dont sell we lower the price. You know basic supply and demand.

 

That was my thought. It just seemed ridiculous. Particularly when I was called stupid for trying to buy things at a quarter of the price, when I thought the price was more reasonable. Supply and demand calls for fluctuating prices and negotiation. These are two things I don't see. You say, if they don't sell, we lower the price. To me it seems like prices are fixed. It kind of reminds me of "gas" prices. There's no monopoly, but a consensus of sellers.... But then again, maybe there's a real outside force.

 

If it *is* supply and demand, then if we want to "fix" the economy, we can easily do so ourselves by changing the prices we ask for things, and bringing them in to line.

 

If summoners think LE's are too expensive, then don't buy them, ever.

[Atlantis]

The sort of questions you are asking are not directly related to this game. Why do people pay 3$ (or whatever) for a piece of steel in real life? Because thats how much the people who are getting the steel are willing to sell it for. The economy here is similar to that, time = money, and people decide how much they are willing to sell/pay...

[trollson]

A lot of this has been gone over at great length in other threads in recent times. To try an summarise the salient points:

• Supply and demand does not apply where items are created for experience (levelling). Assess the value in gc for 1xp, and reduce production costs accordingly.
  
• NPCs serve as infinite sink/sources for certain goods, giving an upper and lower bound on market prices (NPC prices adjusted by portage costs).
  
• A cooperative market (eg, with a guild) is not bound by the NPC prices.
  
• Most harvestables are essentially free to obtain in a cooperative market, and derived products have minimal material costs from them.
  

Edited June 2, 2006 by trollson

[Kalach]

Why do people pay 3$ (or whatever) for a piece of steel in real life? Because thats how much the people who are getting the steel are willing to sell it for.

 

I think that accurately represents the situation in the game, but oversimplifies the situation in RL. In RL the calculations are heavily based upon costs and profit margins. Steel sells for $3 because on a per Steel basis they are paying $1 in taxes, $1 in labor, and $.50 in equipment upkeep. That gives them a $.50 profit afer costs. In RL there are always costs that largely drive prices, and profit is a small margin.

 

In EL the cost for harvesting is time and equipment loss. Equipment loss is so rare that it calculates out at less then 100th of a GC in my experience. This means that time is the only factor for EL as you stated above. But here's the set of propositions that don't all make sense together to me:

 

The economy is stagnant (insufficient buying and selling)

The prices are ruled by supply and demand

The prices are sufficiently low where people will buy [this is really a correlation of prices ruled by S&D].

 

 

If the prices were sufficiently low, there would be buying all over the place. There are two things I can think of that could be contributing to problem. [Part of what I'm trying to understand in this thread. Every other thread was about solutions. I want to try to very clearly define the problem, first.]

 

#1 The most reused items (Health Essenses, Sulfur, Flowers, Fire Essenses, Silver) are some of the easiest to make/harvest. This means that any buyer has an option of just doing things himself.

 

#2 Items are available in sufficient quantity in a sporadic fashion. There are times when noone is selling FE on the market. There are times when there are tons of people selling FE. Same goes for other items. This would have the effect of potentially magnifying problem #1 (people can't get what they want to buy, so they make it themselves) while increasing demand (people are happy to jump on things, once they need them, because they're actually available.)

 

A lot of this has been gone over at great length in other threads in recent times. To try an summarise the salient points:

• Supply and demand does not apply where items are created for experience (levelling). Assess the value in gc for 1xp, and reduce production costs accordingly.
  
• NPCs serve as infinite sink/sources for certain goods, giving an upper and lower bound on market prices (NPC prices adjusted by portage costs).
  
• A cooperative market (eg, with a guild) is not bound by the NPC prices.
  
• Most harvestables are essentially free to obtain in a cooperative market, and derived products have minimal material costs from them.
  

 

All of these things except the bounding should be driving prices down. HEs and other items are not currently subject to the bounding, because they have not reached the boundary. HEs are an item with known demand. (Reference my other thread, Cost/Benefit of fighting.) Most cited reason for not purchasing items is not that they are free through a cooperative market, but that they items are too expensive, and so self-sufficiency is necessary.

 

I don't think that summary, or the majority of the discussion of the recent threads, explains the trends in the basic items such as essences and harvestables. Why is there little market for minerals and ore? Because the cost is so expensive (2 GC for sulfur?) that the profit for an FE (At the bounded minimum of 3GC) is significantly reduced in game terms. So most people spend the time rather than the money.

[Bharain]

HEs, though, are priced at 6-7GC each. Someone checked the Magic Store for me, and reports that the magic store will buy an HE for only 3GC. So that's not the driving force. Players have repeatedly stated that HE's seem expensive, so that doesn't seem to be what's driving either. Is it so much of a sellers market that the sellers can charge what they like? That seems odd, because people can learn to make HE's themselves, and many people are reporting thats what they do.

 

HEs are one of the few things priced correctly in my opinion:

 

2 silver ore (4gc)

1 chrysanthamum (0.5gc)

1/5 Feasting Potions (~2gc)

 

Total: 6.5gc

 

So HEs you can actually buy supplies, make HEs and sell at a slight profit, not many other items you can do that with. They sell at this price because pretty much everyone needs HEs. I personally buy all of my HEs, it saves me 2 PPs of inorganic nexus and lots of sitting at storage mixing.

[LadyWolf]

You ask why sulfur sells for 2gc each, when it is free to harvest.. Basically it's 1 gc for each emu the ore weighs. Why don't the people that sell it just give it away? Because they spent their valuable time to harvest it, so that others that might not like to harv, or be able to harv it can use it.

 

Ever heard that saying. "Time is money"?, well that is seen alot it this game. People like to be compensated for the time that they spent making/harvesting the items, as well as for the materials that were used to make it.

[Kalach]

You ask why sulfur sells for 2gc each, when it is free to harvest.. Basically it's 1 gc for each emu the ore weighs.

 

That's important information. Do people use this as a general rule of thumb to bound prices? At the least, something costs 1GC per EMU?

 

Why don't the people that sell it just give it away? Because they spent their valuable time to harvest it, so that others that might not like to harv, or be able to harv it can use it.

 

Ever heard that saying. "Time is money"?, well that is seen alot it this game. People like to be compensated for the time that they spent making/harvesting the items, as well as for the materials that were used to make it.

 

Don't misunderstand. I don't expect anyone to give anything away. I firmly believe that people should be compensated for their time. I'm just trying to understand why we value our time at the rates at which we value it. I'm definitely not ready to suggest any changes.

 

It actually makes more sense as EMU bounded. After all, harvesting silver takes more time then harvesting sulfur, yet both are generally 2GC. But, both take two EMU.

[Bharain]

That's important information. Do people use this as a general rule of thumb to bound prices? At the least, something costs 1GC per EMU?

 

Iron ore is an exception to this. The ore in Nordcarn is very close to storage and the ore itself isn't all that useful. Even if people want to make iron/steel bars it makes a lot more sense to take coal and FEs to the iron ore: if you buy iron ore at 4gc one bar would cost you ~45gc while the market price is closer to 30gc.

[Jamol]

It actually makes more sense as EMU bounded. After all, harvesting silver takes more time then harvesting sulfur, yet both are generally 2GC. But, both take two EMU.

 

It is not all EMU priced there are some set limits that some ppl will not go under do to NPC prices while selling. It all depends on what certian ppl will pay for the harvestables. I would like to see some one get 1GC per flower Some ppl get that and some dont depends on the buyer. It all depends on the demand of the buyer.

[Kalach]

That's important information. Do people use this as a general rule of thumb to bound prices? At the least, something costs 1GC per EMU?

 

Iron ore is an exception to this. The ore in Nordcarn is very close to storage and the ore itself isn't all that useful. Even if people want to make iron/steel bars it makes a lot more sense to take coal and FEs to the iron ore: if you buy iron ore at 4gc one bar would cost you ~45gc while the market price is closer to 30gc.

 

Okay... So maybe it could be made more generic: The bounding is less based off of harvesting time, more based off of ease to transport to where it can be utilized. (EMUs being a starting point, but not the only contributing factor.)

 

HE's you said were close to right on. [Although your formula doesn't work at *my* failure rate ]

 

Assuming that the first tier items are then based off of this vague "transportation cost", do second tier items more or less meet the cost of the components?

 

FE

Sulfur: 2

Flowers: 1

Total: 3

 

LE

Sulfur: 2

Flowers: 2 (2 sunflowers, right?)

Total: 4

 

/trinity PC Life Essence

 

(I think it's 5 which is close)

[Vormavius]

why ferrari's cost 1 Million or more and a Mustang less than 100k?

[Bharain]

LE

Silver: 1

Flowers: 2 (2 sunflowers, right?)

Feasting Potions: 11/7 (~1.5gc)

Total: ~4.5

 

Corrected (assuming no fails of course)

 

EDIT: forgot FPs

Edited June 2, 2006 by Bharain

[Kalach]

LE

Silver: 1

Flowers: 2 (2 sunflowers, right?)

Feasting Potions: 11/7 (~1.5gc)

Total: ~4.5

 

Corrected (assuming no fails of course)

 

EDIT: forgot FPs

 

Hrmm... I've never seen anyone sell silver for less than 2!

 

EDIT:

 

Wait... You're writing in quantities, mostly, aren't you?

Edited June 2, 2006 by Kalach

[Bharain]

LE

Silver: 1 (2gc)

Sunflowers: 2 (1gc)

Feasting Potions: 1/7 (~1.5gc)

Total: ~4.5

 

Corrected (assuming no fails of course)

 

EDIT: forgot FPs

 

Hrmm... I've never seen anyone sell silver for less than 2!

 

EDIT:

 

Wait... You're writing in quantities, mostly, aren't you?

 

Woops, yes. Altered above for clarity.

 

EDIT: the driving force for harvestable prices is the lupine bush in my opinion. if it's not worth someones time to harvest silver/sulphur then they can always sell lupines/lilacs to flower shops instead.

Edited June 2, 2006 by Bharain

[LadyWolf]

flowers are one harvestable that doesnt go by emu pricing, the npcs pay the most for flowers. I guess this is because they require no nexus to harv, and generally people harvest flowers solely for personal use, or to sale for gc to the flower shops.

[Kalach]

flowers are one harvestable that doesnt go by emu pricing, the npcs pay the most for flowers. I guess this is because they require no nexus to harv, and generally people harvest flowers solely for personal use, or to sale for gc to the flower shops.

 

The transportation cost/simplicity of harvesting of flowers drives their cost pretty darn close to 0. There's always a good place to harvest flowers, taking up 1 EMU, being close to storage, etc... You couldn't build a model directly off of EMU, but it seems that the price is driven by complexity to harvest. For ore, transportation greatly exceeds other concerns, so it largely drives the equation. I've played the game enough for this to make sense to me.