WoW Economic Collapse

[Boardin087]

I haven't been around the boards too much as of late, but allow me to make a few assumptions:

1. You are either 18 or 19 years old.
2. You either like skateboarding, or snowboarding.
3. You have, at the most, 2 semesters of college economics classes under your belt.
4. You probably have less than 2 semesters of college economics classes under your belt.
5. Based off of what little I know of him and his professional career, Torgo has at least some professional experience with economics.
6. Based off of previous posts of Torgo's that I have read, he likely has more than "some" professional experience with economics.
7. Torgo's professional experience with economics likely trumps your theoretical experience with economics.

Therefore:

8. You telling Torgo that he does not understand or have experience in economics is highly, highly ironic.

Revisions?

thanks for not understanding how to read things in context, i meant the game. he doesn't get it. Im not doubting his econ (although even tho I do doubt yours, he has no professional econ experience with these matters unless he owns walmart, and even then its not the same as being talked about, but you didn't seem to catch on to that as your statement #7 says).

Btw im 19, yes i like snowboarding but my name is more of just an alias nowadays, 2 semesters of econ. But i still understand the wow economy a whole hell of a lot more then you, after all..... im 19, besides partying its what i do.

 

[Boardin087]

Economics is the study of wealth. The entire point of the study of economics is to make money. If what you are trying to do won't make money you are not practicing economics, instead you are merely practicing a non-technical form of hacking. You are being malicious for the sake of being malicious.... "WoW Economic Collapse" sounds pretty malicious to me... I hope Blizzard bans you

usually hacking needs to give u some kind of advantage, gimping ur bank statement isn't a very good hack

 

[pain.angel]

I think the major flaw that everone seems to be getting stuck on here is the fact that with a zero cost (excluding the time factor) item such as a metal bar if someone wanted to simply collect and undercut to the point where they made auction house cut + any profit your model fails due to the fact that it is impossible to control the supply as the goods are infinite. Inventory not being a factor because perhaps this person does not care how long something sits in his inventory as he does nothing but sell the item to generate any profit. So essentially both his supply and your supply are infinite and any profit is acceptable so a monopoly can never exist because you can never beat a zero cost of production and wharehousing is not an issue since it is also zero cost.

So if its zero cost to obtain + zero cost to store + profit - static auction house cut, you can never hold a monopoly while maintaining a profit. You could take a loss through absorbing auction house cut at your expense to gain control of the market but then you would soon go broke.

 

[finalgt]

thanks for not understanding how to read things in context, i meant the game. he doesn't get it. Im not doubting his econ (although even tho I do doubt yours, he has no professional econ experience with these matters unless he owns walmart, and even then its not the same as being talked about, but you didn't seem to catch on to that as your statement #7 says).

Btw im 19, yes i like snowboarding but my name is more of just an alias nowadays, 2 semesters of econ. But i still understand the wow economy a whole hell of a lot more then you, after all..... im 19, besides partying its what i do.

Ok, but "WoW economics" should not be different from "Professional economics." If it is then that means Blizzard screwed something up and you shouldn't be paying to waste your time in the game.

And for the record, I'm not trying to insult you by stating how old you are or that you like snowboarding, I just intended to establish that Torgo probably has a better grasp on "real world" economics than you do. The only thing more pointless than making ad hominem attacks is attempting to respond to them; they have no part in intelligent debate.

 

[Cobalt332006]

Ok, but "WoW economics" should not be different from "Professional economics." If it is then that means Blizzard screwed something up and you shouldn't be paying to waste your time in the game.

And for the record, I'm not trying to insult you by stating how old you are or that you like snowboarding, I just intended to establish that Torgo probably has a better grasp on "real world" economics than you do. The only thing more pointless than making ad hominem attacks is attempting to respond to them; they have no part in intelligent debate.

When was the last time you went out and mined minerals and sold them? Or went hunting and skinned animals and made clothing and sold that? Or went in a dungeon full of monsters and sold your phat lewts for much profit? Resources in WoW are literally unlimited and very easy to get by anyone if they put the time in. Not so in the real world.

 

[mr saturn]

Ok, but "WoW economics" should not be different from "Professional economics." If it is then that means Blizzard screwed something up and you shouldn't be paying to waste your time in the game.

And for the record, I'm not trying to insult you by stating how old you are or that you like snowboarding, I just intended to establish that Torgo probably has a better grasp on "real world" economics than you do. The only thing more pointless than making ad hominem attacks is attempting to respond to them; they have no part in intelligent debate.

I hate to break it to you (okay, I lied), but you are paying to waste your time as it is a game. A game with unlimited resources, which is not quite the case in the real world.

 

[CodeX]

Ok, but "WoW economics" should not be different from "Professional economics." If it is then that means Blizzard screwed something up and you shouldn't be paying to waste your time in the game.

Do you actually believe that real world economic principles apply to a video game's economy? Last I knew gold mined from the earth doesn't respawn every 15 minutes...

Give me a break. This entire discussion is assinine

 

[Stammer]

Do you actually believe that real world economic principles apply to a video game's economy? Last I knew gold mined from the earth doesn't respawn every 15 minutes...

Give me a break. This entire discussion is assinine

LOL, I can't believe this thread is more then 2 pages long.

 

[arentol]

99% of the reason that this topic is so long is because of the header "WoW Economic Collapse", which this scheme clearly has no capability to cause.

I also wonder why we are being told on one hand that the purpose of this is to gain control of a market to make money and then when we point out that you can't raise your prices because you will be under cut we are told raising prices is not part of the scheme.... So profits always stay relatively low. Seems a little inconsistant to me, and like a bit of a waste of time except for the pleasure of screwing over other people.

Also I will reiterate the whole in your scheme that others have pointed out and that I pointed out as well (though a bit incorrectly because I didn't know exactly how WoW auctions worked, nor your scheme completely)..... Your scheme will make you money, but does not control the market, because anyone can simply buys your stock shortly after you put it up and then resell it for more. Your argument that they will then be stuck with their old stock is irrelevant because the smart player wouldn't HAVE his own stock. He would simply buy yours and resell, and make more profit than you make each day because you sell at such an incredibly low margin.

 

[Gongo]

Do you actually believe that real world economic principles apply to a video game's economy? Last I knew gold mined from the earth doesn't respawn every 15 minutes...

Give me a break. This entire discussion is assinine

no but money can be printed every 15 minutes and just like in game cause inflation.

 

[Worldhammer]

Do you actually believe that real world economic principles apply to a video game's economy? Last I knew gold mined from the earth doesn't respawn every 15 minutes...

Give me a break. This entire discussion is assinine

And yet you're still here, even after calling for /thread. (Big of you to decide that for everyone btw)

This is one of the most interesting threads I have seen on here for a long time. Keep it coming

 

[Torgo]

Good news! We've got more screenshots that will soon be posted with last weekend's work. Very interesting things are happening on the server. We've got more competition and the prices in the market have completely dropped. We're seeing what we think is Flaw #2 in our theory; what happens when too many people hop in and try what we're doing? We've got screenshots that show the results.

Also, Meatpuppet did some analysis of the arcanium crystals market. I'll post some of his thoughts on what it would take to enter the market and take it over. Will our theory hold up?

Lastly, did you know Steve Irwin would still be alive if he used sunscreen? Yeah, it keeps out harmful rays.

See y'all after lunch with the shots and explainations.

 

[CodeX]

no but money can be printed every 15 minutes and just like in game cause inflation.

Printed currency has no real value. Every American dollar in circulation is supposed to be backed up by an equal value of gold in the federal reserve. No one knows how much is actually in there anymore though...

 

[Torgo]

To be more specific, printed US money is officially known as a "Federal Reserve Note". They are not redeemable in gold, silver or any other form of lawful money since 1968 thanks to Nixon. As CodeX stated, the notes themselves have no value. They have no backing other than the "full faith and credit of the U.S. government". In other words, the government can tax the population to back all printed currency or could been seen as being backed by all the goods and services in our economy.

There is a law on the books that states "Federal Reserve Notes...shall be redeemed in lawful money on demand" but good luck on that one. Anyway, the Fiat Currency system is really interesting (or in another words boring as all heck) to read up on and is certainly liable to give you tired head.

 

[jebo_4jc]

Lastly, did you know Steve Irwin would still be alive if he used sunscreen? Yeah, it keeps out harmful rays.

I'm going to quote myself directly after I read this line

"Oh come on"

 

[Woofer00]

Good news! We've got more screenshots that will soon be posted with last weekend's work. Very interesting things are happening on the server. We've got more competition and the prices in the market have completely dropped. We're seeing what we think is Flaw #2 in our theory; what happens when too many people hop in and try what we're doing? We've got screenshots that show the results.

Also, Meatpuppet did some analysis of the arcanium crystals market. I'll post some of his thoughts on what it would take to enter the market and take it over. Will our theory hold up?

Lastly, did you know Steve Irwin would still be alive if he used sunscreen? Yeah, it keeps out harmful rays.

See y'all after lunch with the shots and explainations.

Sigh... your overblown and allegedly original 'theory' is what the entire game community simply calls undercutting. you post a low price, someone else will post a lower one, even if just by 1s, just to make the sale, regardless of whether they know what the proper price is since fast money is often preferred to long term higher gains due to the production of funds in wow (questing --> easily 20g or more per hour at lvl 60). they already have the good, and unless they reset the market price (i.e. buyout the entire available inventory) the prices will simply drop until it is no longer profitable for you or anyone else, and as you claim, the market will die. however, people reset prices all the time, at least once a week for any given market, more frequently for those in high demand or limited supply.

also, arcane crystals will be nigh impossible to control. you first need to obtain some type of supply. note that the drop rate for arcane crystals is incredibly low to the fish you've been working with, so the supply isn't quite as infinite as in other markets. however, this limited supply will come back and defeat your entire effort - someone will almost immediately buy your lower priced crystals, then others will come along and simply buyer the higher priced one because it's a required item. OR buy out your absurdly low priced one and re-list 1g below typical retail. you might make back the buyout price, but you lose the potential profit which the reseller will almost immediately realize.

face it, your system simply will not work for most markets. there's a reason for the structure of the AH and the drop rates of items. it isn't even remotely arbitrary. drop rates are modified with every patch to avoid precisely what you are trying to do.


and as for your credibility, well, it's practically dead. "arcanium." no comment.

 

[Cobalt332006]

and as for your credibility, well, it's practically dead. "arcanium." no comment.

hahahahahahaha

Let's see here... you will control the ARCANE crystal market by spending how many hours a day online? Do you have any concept of how rare a "drop" they are?

Once again I go back to your post that you spend 30 minutes a day on the AH... you post your "arcanium" crystals at a low price and log off. Ten seconds later somebody buys them and reposts at normal value for a nice profit. For the next 23.99 hours every day the market behaves normally, your auction being long forgotten. You log on the next day and hey, your auction sold! Grats, you now believe you control the market. Meantime back in the real (game) world the market doesn't even know you exist.

The other flaw in your plan is that you are almost 100% definitely not going to find an arcane crystal in the very short time you are online so you yourself will have to purchase the item at standard market value, and then resell it at a loss... anyone see a problem with this concept?

FFS stop basing your knowledge of the market on fish, level to 60, and learn how the game really works.

Oh and don't make claims if you're not prepared to back them up.

Person A: "I can do X"

Person B: "Do it then"

Person A: "Oh no, I couldn't do that, I'd get in trouble."

 

[Torgo]

I'm a bit behind on getting everything posted. My apologies. Rather than long explainations, I'd rather spend that time explaining our latest screenshots from Labor Day Weekend.

In this first shot, it's a composite of our resulting auctions in the Savory Deviate Delight Market when we first log in on August 31st. The end result is a nice profit of around 20g. Not bad for 15 minutes of work. The extrapolation of 320g is incorrect since we know that we've totally soaked up the demand for that product. (An example where Auctioneer needs a bit of tweaking.)

This second screenshot is an example of our current auctions still left in the market. Notice that the buyout price is 85 silver for a pack of five for our auctions and we didn't sell them all. Time for some adjustments and tweaking to fit the current market conditions. After checking to see who is in and who is currently out, we relist our auctions in this third shot. It looks like at first that he raised prices slightly, but this is actually a shot of the Neutral auction house.

Screenshot Four takes place the on September 3rd in the afternoon. Checking our mail we see we're still selling quite a bit of fish. The day before, Meatpuppet noticed someone dumping inventory so he was able to try and bid on those low hanging fruit. If we win, we got a competitor's inventory as he exits the market. In this case, we were outbid, but that also helps our cause by making that below cost item less desirable with our bid.

In this next wideangle composite, there are 3 panels. The first shows some successful bids on some market dumps below cost that we were able to grab this time. Why fish when you have the desperate willing to sell you the same thing for a song? The second panel shows our relisting of the items. Note that the price war continues and the buyout price is now 72.50 silver. The third panel shows that yes indeed, we're still selling like gangbusters.

This next shot is my favorite. In this market analysis screen you can see Auctioneer mod's profit screen on all those auctions in the market. The highlighted line is our auction. Yep. We're the only ones currently making money. It's only 88 copper, but if you look at everyone else, they're losing 1 silver (or in a few cases 25 silver) for every auction. If you look at the number of auctions, it does add up.

Ah, I already hear the gnashing of teeth of those who say that fish aren't like Arcane Crystals. (Sheesh, I'm playing Arcanium again at home... it's easy to get the two confused. Great game, y'all should try it.) Yes, the prices are different, but the priciples are the same. So what about Arcane Crystals? What does the analysis tell us from a cost/price/profit perspective? We'll have another post in a bit explaining more in detail.

 

[Torgo]

Meatpuppet sent me this email this morning that I wanted to share with y'all. I'll comment after the post.

I am evaluating the market in those commodities [arcane crystal and archanite]. I did not say I was going to "capture" the arcane crystal market nor archanite, for that matter. It does not appear practical given the time to collect resources and the cool down between transmutes. You would need a small army of players to pull it off. There would need to be a least three groups working in collusion to pull it off.

• [1]Gathers, to collect the resources.
  [2]Processors, to transmute the resource into the commodity. This would be the bottleneck because of the cool down time to perform transmute or any other means that may exist.
  [3]Monitors, to post auctions and check the progress of the market.

All of this would have to be coordinated with the market demand, so as to deny access to any other market providers. If the demand for archanite is 100 per day, how likely is it that you can buy that 100? 50? 25? What would your resale margin be?

The number of people alone to produce that much product would be unwieldy. And could you make enough margins per day to sustain your effort? Without cheating? Probably not…

Archanite is also a very inflexible market on the supply side because it would be difficult to adjust to changes in demand, especially increases in demand.

That is why I recommend that you be selective about you markets. Break into easier ones to start with and experiment with your server. If you establish a guild with that purpose in mind, you can manage and possibly control markets with even smaller margins.

The argument based on a premise that it won’t work for arcane crystal, assumes that arcane crystal is a market I would want to exploit. Does it appear to be a candidate? Was any analysis done or did they just jump to that conclusion without substantive thought?

A more important question might be, “Is what I am doing a hindrance or a help to the market?” or, “I am helping to mature the market on my server or retarding its growth by manipulating the price of commodities?”

Remember, I am not doing this to create work for myself. I am doing it for fun. All the rest is speculation. If it is work, it is not fun. If it is not fun, I will not do it. Since I do not cheat and do not bot, there are limits to what I will do in the name of fun.

Later,

MeatPuppet

At the end of lunch, MeatPuppet popped by my office and we discussed the matter further and what he learned from his analysis. I want to also refer you to this arcane crystal market screenshot for reference.


First off, let me stress that we are in no way backing off saying that luxury markets can't be taken over by using our method. What we're trying to do is figure out what the requirements for doing so would be. Other factors are also taken into consideration. Initial inventory, war chest, cost of goods produced, earnings after costs and fees and market demand. Let's look at each of these for arcane crystals.

Cost: Looking at the market, we see that each crystal is selling for a buyout price of about 36 gold. So you can safely assume that the actual cost of producing a crystal is below that. So what does it take to produce a crystal? Well, you get it as a drop or you can get lucky and get it as a drop from a Thorium vein. (At least that's what I gather). Similar to the analogy of having a thousand monkeys chained to a thousand typewriters, for one person to pull this off would require a significant investment of time to gather an inventory and a war chest large enough to purchase anyone bailing out of the market. What is interesting is that because arcane crystals are drops and not skill based, market demand really puts a pressure on keeping prices high. Evaluating actual cost is a bit more difficult because people value time differently in WoW. For Meatpuppet, he doesn't want to spend the entire game capturing just one market. That's what it would probably take (and a small army). It's more fun to capture two or three smaller ones and spend just 15 minutes on each, rather than 8 hours on one. Some other players may just want to do the grind and drops. Their time cost is lower than ours because they enjoy it more.

War Chest: One thing that we noticed is that competition is going to be high-level. So are your customers. Almost everyone dealing in arcane crystals is level 60 or above. This puts us at a significant disadvantage at first because our war chest to withstand any price wars that dip below cost. To take on the market, it's probably best to be at level 60 so any experience gained while harvesting crystals gets turned back into gold for your war chest.

Demand: This is a bit tricker than other goods. Luxury goods of this nature (ones that aren't unique) are harder to track. Who is to say that one person is buying a crystal for 35 gold and selling it for 36? In other words, the actual demand for this item is hard to separate from the demand to quickly flip inventory. The crystal never leaves the market so it can be hard to judge what people are buying it to use as a component or as a one off. Gauging demand on a luxury item has to be fairly certain since the costs are so high. You don't want to misjudge the demand and end up with your entire inventory bought out in 5 minutes or sitting there doing nothing. To properly judge the demand requires a test entry of some type. Say bring in 20 crystals at various price points. How fast do they move? Who is buying them? Are those crystals being relisted? Which goes into our next point...

Initial Inventory: We have to couple this with demand. If there truly is a high demand, if you want to capture the market you need a good inventory set up. The thing that worries us though is the drop factor. Since availability of arcane crystals is scarse and done through drops, this is one of the exceptions to the zero inventory system. Why? Because this follows a more traditional price/demand ratio. As price falls, demand for this difficult to obtain item is going to most certainly rise. This is what MeatPuppet was referring to above in having a group or guild assisting. Especially if you wanted to move in the direction of Arcanite where transmuting takes 48 hours. You'd need a chain of folks to keep your supply up with demand. One thing we're not sure about though is the demand sustainable? In other words, if everyone on the server had their Arcanite and Arcane Crystals... would they want more? Which goes into the last area...

Earnings: I should insert the word "Sustained" before earnings, because it makes a difference. As I mentioned above, once you capture the market, do you really want to beyond the fact that you have a monopoly? A real world example is the IPod. Sales are currently down. Why? Well, pretty much everyone that wants one has one. Is this going to be true of the arcane crystals? Say for instance, people only need twelve crystals to make some ultra cool item and that's all the real demand is for. If everyone has that item, are they going to still want crystals? That's something you need to take into account if you're going to implement this methodology. If the demand is going to drop off, is all that time put into capturing it worth it? That's what MeatPuppet is alluding to. If the demand stays the same, then you're just going to be grinding constantly to supply an insatiable demand for these crystals. You own the market, but are locked into a grind that you may not want to sustain... something that our methodology requires.

After analysis, what some of our detractors were saying is right, but for the wrong reasons. Establishing a monopoly in any market is possible using our method. However, after looking at it and projecting it out several different ways, the outcome could become more of a burden to the player than what it's worth. That's not exactly what we want to do.

I'll tell you up front that if MeatPuppet decided to delve into arcane crystals, it would probably be only after he reaches level 60 and has the necessary requirements to establish a monopoly. However, he would probably bail out of the market after a sufficient amount of time showing that we depressed prices and could sustain it with the help of the model he outlined above. Turns out that arcane crystals has more in common with BoE items than we could have imagined.

A better target would be Thorium bars, since that can be readily mined and you get arcane crystals as an occansional side drop. Thorium would be more sustainable and allow you to dabble in arcane crystals/arcanite if you wanted.

MP and I also talked about other scenarios that could be followed that don't exactly follow our established methodology, but the end result would be a monopoly. I'll save those thoughts for my next post.

(Before you post a "I told you so" message, please make sure you re-read my statement about the method will still work, but has a bunch of caveats.)

 

[arentol]

Geezuz Torgo. Don't you get it. Your entire scheme amounts to "We are selling stuff in the auction houses in a logical manner."

BIG FREAKING DEAL.

What are you doing that is new?

Nothing!

What are you doing that is special?

Nothing!

What new thing have you discovered about economics (real world or MMORPG world)?

Nothing!

How many other people with absolutely no economics education beyond the highschool level had already implemented exactly, or almost exactly, your method in MMORPG's over the last 10 years?

10's of thousands!

Have you noticed how the posts by others have slowed down alot? That's because you kept us hanging on at first in case you actually said something new. Now that you have explained your scheme and we know how pointless it all is we just don't care anymore. You've been repeating the same useless drivel for over 2 weeks now, and you still have nothing to add to the MMORPG world that hasn't been around for a decade.....

Can you please just accept this, end the status reports, and let this thread disappear into oblivion where it belongs.

 

[KidzMD]

(Sheesh, I'm playing Arcanium again at home... it's easy to get the two confused. Great game, y'all should try it.)

You mean Arcanum?

Sorry...was too easy to pass up

 

[sickwookie]

Can you please just accept this, end the status reports, and let this thread disappear into oblivion where it belongs.

I have enjoyed all of the status reports, and will continue to read them as long as this thread is updated. If you don't want to read this thread anymore don't hit the link. I fail to see how simply having this discussion some how ruins your day. Why don't you take your infantile remarks else where and let those who enjoy the discourse continue in peace?

To the OP: I think many of the problems with people like arentol are because of the thread title. Maybe if you start a new thread with a better title such as "WoW Economic Experiment Updates" we could avoid some of the trouble. If you choose to go this route just post a link to the new thread for those of us who are interested.

 

[Boardin087]

Demand: This is a bit tricker than other goods. Luxury goods of this nature (ones that aren't unique) are harder to track. Who is to say that one person is buying a crystal for 35 gold and selling it for 36? In other words, the actual demand for this item is hard to separate from the demand to quickly flip inventory. The crystal never leaves the market so it can be hard to judge what people are buying it to use as a component or as a one off. Gauging demand on a luxury item has to be fairly certain since the costs are so high. You don't want to misjudge the demand and end up with your entire inventory bought out in 5 minutes or sitting there doing nothing. To properly judge the demand requires a test entry of some type. Say bring in 20 crystals at various price points. How fast do they move? Who is buying them? Are those crystals being relisted? Which goes into our next point...

Initial Inventory: We have to couple this with demand. If there truly is a high demand, if you want to capture the market you need a good inventory set up. The thing that worries us though is the drop factor. Since availability of arcane crystals is scarse and done through drops, this is one of the exceptions to the zero inventory system. Why? Because this follows a more traditional price/demand ratio. As price falls, demand for this difficult to obtain item is going to most certainly rise. This is what MeatPuppet was referring to above in having a group or guild assisting. Especially if you wanted to move in the direction of Arcanite where transmuting takes 48 hours. You'd need a chain of folks to keep your supply up with demand. One thing we're not sure about though is the demand sustainable? In other words, if everyone on the server had their Arcanite and Arcane Crystals... would they want more? Which goes into the last area...

Earnings: I should insert the word "Sustained" before earnings, because it makes a difference. As I mentioned above, once you capture the market, do you really want to beyond the fact that you have a monopoly? A real world example is the IPod. Sales are currently down. Why? Well, pretty much everyone that wants one has one. Is this going to be true of the arcane crystals? Say for instance, people only need twelve crystals to make some ultra cool item and that's all the real demand is for. If everyone has that item, are they going to still want crystals? That's something you need to take into account if you're going to implement this methodology. If the demand is going to drop off, is all that time put into capturing it worth it? That's what MeatPuppet is alluding to. If the demand stays the same, then you're just going to be grinding constantly to supply an insatiable demand for these crystals. You own the market, but are locked into a grind that you may not want to sustain... something that our methodology requires.

you are such a newb, end this.

im off to go get ultra cool items isuing my arcaniumumumum crystalis's. but not before buying 8000 savory deviate delights. YARRRRRRRR

 

[Torgo]

Geezuz Torgo.

It's not often I'm linked with a deity. Thank you.

Your entire scheme amounts to "We are selling stuff in the auction houses in a logical manner."

Ah, you catch on quick. Only took you a few hundred posts, but you've got it. We're selling things in a logical manner using real-world principles. Yep. Nothing new. You've got me. Of course, I've repeated this over and over in earlier posts to which it's finally reached that lone synapse in your cranium. I'm sure someone else has done this somewhere else. The difference here is that we're doing it and talking all about it. Not to brag, but where else are you going to go to find a in depth discussion of this type that includes examples, theory, screenshots and commentary?

Have you noticed how the posts by others have slowed down alot? That's because you kept us hanging on at first in case you actually said something new. Now that you have explained your scheme and we know how pointless it all is we just don't care anymore.

Sounds like someone's got a case of jealousy. Yeah, it's simple. So simple that most people look past it or don't even try it. Sorry you didn't try it first and start this thread.

Can you please just accept this, end the status reports, and let this thread disappear into oblivion where it belongs.

Oblivion! Love that game! But seriously, I don't see Moderator next to your name, nor do I see the title "3LiT3 M4ST3R of teh IN3RW3B." As Kyle is often fond of saying, "No one is forcing you to come here. If you don't like it, click here instead." Hey it even rhymes with your nick!

To the OP: I think many of the problems with people like arentol are because of the thread title.

Well, the original thought is that following our methodology to the fullest extent, a guild could collapse the economy of a server. That fell by the wayside as I had to explain the methodology in greater detail than I thought I would have to. I still think that it's possible to carry out. MP and I are seeing more and more ways that the market can be manipulated, and not just by our methodology. We're working on a modified theory to work with those limited and unique items to see how those markets can be monopolized.

One theory is that competing groups of level 60 characters can create a hyperinflated economy in the game world by constantly spending. If high level characters spent all their time accumulating wealth and only spend it around themselves (other level 60 characters) it's possible to inflate market prices to the point where lower level characters have no hope of purchasing items.

It would take two cooperating guilds or at least one very, very large guild of level 60 players to pull it off. They would have to initially accumulate a very large amount of gold and then start buying everything in sight to drive prices higher. You could modify this somewhat by making very low level items extremely cheap (denying the lower level characters making profits), keeping mid-level items scarce, and making high-level items astronomical in price. In essence, the goal is to create a class system of super wealthy, struggling middle-class and a destitute poor.

I don't particularly like it because it ruins the game for so many and enriches a few to obscene amounts. There are various ways to play it out, but in the end all it takes is a tight knit group to closely follow some economic rules and you can hose up the server economy. Frankly, I'm surprised that it hasn't happened (as far as I know) somewhere using some method up to this point.

 

[arentol]

It's not often I'm linked with a deity. Thank you.

Actually, I always picture you more like this:

http://img217.imageshack.us/img217/9646/torgo3cr.jpg

http://www.badmovies.org/movies/manos/manos2.jpg

 

[Rich Tate]

If you can't participate in the convo and not act like a 12 year old, then please don't post, period.

Knock it off and act like adults.

 

[Woofer00]

OP, if you want to continue the discussion, no need for the hostility in your last post. everyone who posted insisted your theory wouldn't apply to a non-luxury market, you researched it (or at least meatpuppet did), and it turned out it wouldn't work for one of the highest demand and lowest supply markets. you suggest we should re-read your post, but i suggest you do the same. the "caveats" you mention are essentially all that distinguish the AH businessmen from the farmers, and the only way to sustain your theory is to actually become a farmer yourself.

That said, some reasoning which will hopefully bring this thread closer to its end.

The problem isn't that you're posting a working concept. It's known to work, and has been established to work for over a year now, close to a year and a half. The main problem is one of the very first claims you made - the ability to crash the market with a minimal effort. In the very first post, you claimed to have gained a stranglehold on an isolated market.

note that upon discovery that you were working in fish, noone argued it was impossible to dominate that market, but rather that those principles are inapplicable to most other markets, simply due to the mechanics of the game and the heavy presence of farmers and guild banks.

in your most recent post, Meatpuppet conceded that it would take a team of players working round the clock to make an arcane crystal domination happen - far more than "a bit more work [than 20 minutes a day]" you indicated in the first post.

as for crashing thorium bar markets, it's entirely possible to do so, but there's are finite limit on how far you can take it. those are the vendor price and the changes in market demand as players level.

lower the prices far enough and sure, sellers will drop out. no reason to sell at a lower price if there's no urgent need for fast cash. however, any 40's and 50's will immediately buyout your entire supply and convert it into thorium brotherhood rep in tanaris or save the thorium for BS. your entire backup inventory could be gone in days, if not hours. at that point you'll need to send out a group of farmers to collect for you, or wait until a smart person comes along and lists thorium at an insanely high price PER BAR, not stack, to meet the lower but still significant demand for thorium to create arcanite bars/enchanted thorium. to maintain an iron grip, you'll need to delve deep into your markets and make their supply your supply. however, you just made a high priced sale for them, and more buyers will appear. unless you have thorium to reflood the market, you will ultimately have only had a grip on the market for a relatively short period of time. a blink of an eye, with the speed at which the game runs.

in short, to be able to maintain a hold on a market, you will need to become a farmer yourself. that's precisely why they are hated so much, and auto-fishers and auto-miners(yes they exist, just much rarer and with far less productivity) are constantly reported.

as for vendor price limits, thorium bars already sell just barely above vendor sale prices now that most servers have opened the gates of AQ. attempting to control the market while the war supply effort is going on is simply forgoing large amounts of potential profit.

http://norganna.org/wiki/Auctioneer present the basics of your methods without most of the theory.
http://norganna.org/discuss/5/ is a forum for auctioneer where your theory and many many others are discussed and have been for a while
and of course the wow forums, but those are full of garbage.


final final note for this post - even at current market prices, it's profitable to load bags with items which are almost always in high demand (quest items, rep items) and simply advertise in /1 in the locale where they're most needed (thorium in tanaris, residue/kingsblood/iron in thorium point, core of elements/crypt fiend parts/di scraps in epl, twilight texts in sili, keys for AQ/BRD are rare but great). note these are the items i've suggested in my posts from the time i first involved myself with this thread, and i stand by those items as THE best profit you can consistently turn. sure you piss off a LOT of people. I'm talking everyone in your faction in the zone, or within yell distance. but the demand is there and it is HIGH, and people will pay to save the time of travelling to the AH on the off chance you haven't cleared the market. it's the concept of arbitrage. i guarantee that this will become the standard if you try to crash a market. people will even sell at YOUR price and make more than you, simply b/c there's no AH tax.


edit: just a note - i didn't write the paragraphs of this post in the order they appear, and i have no desire to structure the post, so take from it as you will.

 

[Torgo]

I always appreciate a well-reasoned and written response. I didn't find your structure confusing at all and followed it nicely. Currently, we have no immediately plans to abandon the thread as long as we keep experimenting. As you stated, this is still theory and we really want to see to what extent it will work. Thank you for the linkage and I do plan to follow up when I get some free time.

the "caveats" you mention are essentially all that distinguish the AH businessmen from the farmers, and the only way to sustain your theory is to actually become a farmer yourself.

It is similar to farming, but with a major difference. We have no profit motivation and the primary goal is to first collapse the pricing structure of any market. A farmer's primary motivation is to make gold and sell it in the real-world to other players.

Let's hit the rewind button and revisit my original post.

Without going into too much detail, we've (well, mostly my friend since he has the WoW account) used real world know-how to actually drive off almost all farmers from one server and totally take over key auction house markets. In other words, we've been able to be the only player offering items for sale. Anyone else trying to come in simply cannot compete. And yes, as an experiment (and for fun) we've pulled out of the market totally and re-entered and totally wiped everyone out.
...
The scary part is that we've figured out that with a bit more work, we could actually collapse the Warcraft economy for every server. The good part is that we would eliminate all farmers (make it so that farming isn't worth the real world money you would get) but would cause a circa 1930s German economy of hyperinflation.
...
Now, I'm not a WoW expert by any means. I've never actually played, just watched and read up on it. I do however know game design and basic economics. So my question to this forum is: has anyone attempted a complete auction house domination before? Why didn't it last?

That's my first post. In other words, we have this theory which if you take to it's logical conclusion could cause a economic collapse through control of the auction house. (Note that I don't say "isolated market" but "key markets". In later posts I clarify this as being raw processed goods.) Is it possible and if so, why hasn't it happened yet? I'm going to turn some of your comments back around on you Woofer (and excuse me if I seem a bit forward). If as you say what me and my friend are doing has been known and has been done for a year and a half, then why hasn't a collapse happened on one of the many, many servers out there? I mean, if the theory is as sound as you said it is, being used and discussed by many, so why hasn't at least one punk kid or a miscreant guild pulled this off? That's my original question and it still hasn't been answered yet.

noone argued it was impossible to dominate that market, but rather that those principles are inapplicable to most other markets, simply due to the mechanics of the game and the heavy presence of farmers and guild banks.

You've hit on the very thing that has myself and MeatPuppet just scratching our heads. Why are people so hung up on fish? I'm sure you're asking us the very same question. Here's the simple answer from our end: We use the fish market as an example because it allows us to quickly experiment using sound principles and the results of which happen quickly. If we were to jump first into a higher priced market, it would take much longer to see the results. We stand by our claim that our methods will work on any market with some minor modifications. My caveats doesn't turn me into the farmer out for gain, which is what people complain about. You can call it "farming" if you want, but we're not doing it for profit. It's about the monopoly.

All markets are different in some way. That's why we spend several posts explaining market analysis. We also explained why unique items (BoE) are not best to start off with and why raw processed goods are the starting point. Looking back, I don't recall ever saying that one person could collapse the server or have complete control. We've maintained that to do so would require a guild or a federation of players. An oligarchy if you will.

Lastly, once a system is in place with enough people, it's possible for each person to accomplish their "task" in 20 minutes or so. The management process is the easy part. You don't need an army of harvestors. You just need to meet your daily market demand.

as for crashing thorium bar markets, it's entirely possible to do so, but there's are finite limit on how far you can take it.

I won't quote your entire section to save space, but if you're goal is to end the thread, you need to stop posting reasonable comments!

I'm going to go out in uncharted territory so please correct me where I stray. Your point about characters buying out our entire supply and going to the Thorium Brotherhood is beside the point. We've covered this in an earlier post. If they buy us out, that's fine because we've made our money. If there is really that much demand (270 bars at a time for the complete set of armor right?) there are ways to adjust for that. In that case it's always best if they buy the bulk of the bars from us before moving to other people. If the demand is truly out of whack (like the opening of AQ for instance) then you should raise your prices (but keeping it lower than everyone else) so that you can keep your monopoly; The idea being that you prevent others from selling their goods. Even with a high demand and if you had to recruit others to help gather materials to keep up, a price war is probably going to break the other person first. (See my other posts on price wars.) One thing I should clarify or point out is that while our margins may be slim percentage wise, the amount can vary. That 1% margin could be 1 copper or 10 gold. What we lose on potential high margins is made up in volume.

it's the concept of arbitrage. i guarantee that this will become the standard if you try to crash a market. people will even sell at YOUR price and make more than you, simply b/c there's no AH tax.

Finally! You're the first person to point this out in the thread! MP and I discussed this very thing when I was asking him about the possibilities of circumventing the AH. It's the Black Market concept. It's a hole, but a small one that can be taken care of. The AH allows you to do two things: 1) sell your goods to both Alliance and Horde players, and 2) offers several degrees of security, both personal and financial. If you decide to cut out the middle-man and trade directly with players, you limit your audience to just either the Horde or Alliance. Secondly, if you're trading in the open, you're now exposed. If Don Torgo runs the AH and knows that you're out and about trading on his territory, he just needs to send Orc Guido and Orc Vinny to bust a kneecap or two. Have your own private little army to back you up, we can try to compete in the AH and match your pricing.

Possible? Sure. Likely? Not really. If people are resorting to trading instead of the AH, then we essentially have taken economic control of the server and pretty much run things. Hey, I think a "Black Market" would be cool, but Blizzard put it into place to prevent larger and greater threats from cheating. You've got your thinking cap on that's for sure. Keep trying to poke holes in the theory. I'm not naive enough to think that there isn't one. There is, but I haven't seen it yet nor has anyone convinced me of a problem that can't be overcome. Oh, and those are good tips for maximizing profit. I think someone else mentioned that as well in the thread, only they would string along the buyer stating there was another player wanting to buy that item and keep jacking up the price.

 

[Torgo]

Meatpuppet just popped by and we talked about the latest posts. We've only held back on discussing one tiny detail of the plan (strike that, I just checked and we actually did mention everything) but we've actually shown it and everything else to y'all several times over. I just wanted to make it clear that we're really trying to be as transparent as possible and not trying to mislead or decieve anyone. If there's something specific you want to see in a screenshot or explanation, let us know.

 

[arentol]

Just a quick question Torgo.

After all you have learned here, and after your further explorations into this concept in the game, do you still stand by the statement below?

The scary part is that we've figured out that with a bit more work, we could actually collapse the Warcraft economy for every server.

 

[Torgo]

Yes, I still think it's possible. It's going to happen eventually anyway since gold is constantly going into the system without it being removed from the game. ("Eventually" probably being several years... Anyone know of someone tracking inflation on WoW servers currently? I got to thinking about that today.)

If you just assume (play along with me now) that is is possible for a guild to establish a monopoly in almost every market, then they would then control enough of the money supply to impact the server economy. Either through deflation or hyperinflation, the economy would be hosed.

Or to make it simplier, follow the whole thing in reverse. Hyperinflation can be caused by escalating product prices which can be caused by a virtual monopoly on market items which are in turn mostly controlled by the Auction House. Therefore, control of the Auction House can possibly lead to an eventual economic collapse.

Making it this simple is leaving some holes, but rather than get restart the whole thread again, just reread the entire thread.

Truth is, most games have some fatal flaw in their economic model that either one person or a group of people can eventually take advantage of. Heck, most real world economies suck as it is. If a WoW economy can't be collapsed through this, then there is surely another way to pull it off. (And yes, it's something MP and I are debating around. MP has a working thesis that perhaps farmers are necessary for WoW to sustain itself. That'll be another thread that he can start.)

 

[MenuBoy]

you forgot to mention in your latest posts that you and your buddy no longer have any legitimate market presence in savory deviates.

hopefully this is because you guys are moving to another market like arcane crystals, and not that you could not even drive away the 3-5 major competitors you had in the savory deviate market with your undercutting methods.

 

[ikellensbro]

My first post in this very active thread

First off, to make myself sound more important, I'm from the [H] guild on Stormscale (now merged to Seven Sins, and possibly acquiring/merging into another guild soon). Ever since when I got 2 Savory Deviate Delight recipes in my teens, I've been relatively luck with making money. I easily had enough gold to buy the level 37 epic bow and buy a mount at 40, and had about 1600 gold when I got my epic mount. Most of the profits came from running an Auctioneer scan every day, then checking for 100% or greater profit bids/buyouts. (on an unrelated note, I recently lost my Auctioneer data for the second time in 2 months, which really pissed me off, but gold isn't such a big issue at 60)

From my time observing many markets, I've realized that there are very few steady markets of items. Items like Deviate fish/their edible results are a consistent market because there is a continuous desire for them. They are a consistent drop, so anyone can potentially farm them. This is where I see the issue with your plan, Torgo.

I mostly skimmed through the walls of text, but what part of your plan can stop some person (even just a level 40 alt) from farming and cokking their own fish/whatever, and posting their items below you, repeatedly?

As for complete monopolies, I don't really see them happening, unless a guild plans on spending their time making a lot less guild than they could individually make from just farming SM, Silithus, etc. like many 60s do. Since anyone can viably jump in a market, they could slowly wittle down the value of an item, such as bringing Thorium down to 2g/stack. With the amount of time it takes to ride around and find Thorium, then to smelt it into bars, you would be seeing much less than 20-30g/hour profits that even the laziest 60s can get farming.

Economic crashes will never really happen either, it'll just drive down prices to the point where everyone will just farm mobs instead of using professions. For a real example, Black Dragonscales have fallen about 50% in price the last few months. With more supply coming in (presumably more new 60s around, skinning isn't the most popular end-game profession), I'm seeing scales dropping below 1g each. Balck Dragonscale items used to be over 100g at least, but with these items needing 40-60 Black Dragonscales, the cost of mats is going down a lot. Eventually, these will return less and less of profit margins, and eliminate much of a Dragonscale leatherworker's end-game profits.

This is enough typing for now, but this thread definately ha a lot of good points hidden behind way too much test (yes, I'm a hypocrite).

 

[arentol]

Yes, I still think it's possible. It's going to happen eventually anyway since gold is constantly going into the system without it being removed from the game. ("Eventually" probably being several years... Anyone know of someone tracking inflation on WoW servers currently? I got to thinking about that today.)

You are completely correct that the endless generation of gold in a game does just what endless printing of cash does in real life... Causes massive inflation. However, you are not correct that gold is not removed from the game, and therefore you aren't correct that super-inflation is inevitable.

This whole issue was recognized by MMORPG developers around the time UO was a year old and inflation was out of hand. Since that time every MMORPG has intentionally built money-sinks into the game to help mitigate this issue. For instance, in many games your equipment "wears down" and you have to pay to have it repaired. When you do so gold disappears from the economy. Another example is ANYTHING you buy from a vendor and then use up at some point. In many games one of the most common such items is raw materials for trade skill items, and doubly so for raw materials for items that are then consumed in some manner, like arrows or food.

Basically anytime you give money to an NPC merchant for something that is not completely permanent in the world then you are removing gold from the economy. Same thing if you spend gold on something that can not later be traded to anyone else. On top of that even if the item is permanent then the effect on that kind of item is to reduce the value of that item on the resale market, thus not directly reducing inflation across the board, but effectively doing so for that particular item (which can't be sold to players for more than the merchants price anyway).

No game really has enough money sinks to get rid of inflation entirely, but most games do a pretty good job of keeping it in check (I doubt any game exceeds 5% inflation after the first year). For instance, the EQ economy is doing just fine and it's been active for over 8 years now. There is inflation, but it's actually pretty minimal, and the fact that new expansions come out regularly actually devalues most equipment faster then inflation raises prices, and so the buying power of a piece of gold actually raises regularly in EQ rather than dropping. For instance, 2 years ago I "mined" Acrylia Caverns (AC) for Acrylia all the time. At that time I could sell a "small block of acrylia ore" for 65 to 75 platinum and be the lowest person on the market and sell it fast. Now 2 years later it sells for 30 to 35 platinum and still doesn't move nearly as fast.

It is possible for a large and dedicated guild to cause an economic "Collapse" I suppose. To do it though you would basically have to have a lot of players bringing gold into the economy in some way that kept them from having to then dump any gold into gold-sinks, and I don't even think that is entirely possible, at least not at any reasonable speed, in WoW.

 

[Torgo]

you forgot to mention in your latest posts that you and your buddy no longer have any legitimate market presence in savory deviates.

hopefully this is because you guys are moving to another market like arcane crystals, and not that you could not even drive away the 3-5 major competitors you had in the savory deviate market with your undercutting methods.

Cool! Glad you're keeping up. MP pulled out for the time being to work on getting to level 60. He's also done it a few times before to see what reaction would be. The screenshots we've posted clearly showed how much better he was doing than the others.

what part of your plan can stop some person (even just a level 40 alt) from farming and cokking their own fish/whatever, and posting their items below you, repeatedly?

Welcome and thanks for your comments. I've posted the answer a few times but the short, short answer is when he buys your inventory he falls victim to LIFO. Do a thread search on "LIFO" and you'll get the details. If he is using the same strategy as us... it's going to get ugly and result in a stalemate. I believe I cover this under Flaw #2.

Economic crashes will never really happen either, it'll just drive down prices to the point where everyone will just farm mobs instead of using professions. For a real example, Black Dragonscales have fallen about 50% in price the last few months. With more supply coming in (presumably more new 60s around, skinning isn't the most popular end-game profession), I'm seeing scales dropping below 1g each. Balck Dragonscale items used to be over 100g at least, but with these items needing 40-60 Black Dragonscales, the cost of mats is going down a lot. Eventually, these will return less and less of profit margins, and eliminate much of a Dragonscale leatherworker's end-game profits.

Good example. We were talking about this yesterday in my office. I was asking MP if he knew of any inflationary data that's currently out there on pricing on servers. He mentioned that he noticed a bell curve on many items in the Auction House. As the characters all start progressing towards level 60, demand constantly switches. If you want to make some fast cash, it's possible to predict in the future what demand will be for certain items. A world-world parallel is the aging world population. As people get older, the demand for medicine and drugs keep going up proportional to the rate that people are aging. Servers need to keep a steady influx of new characters coming in to keep demand going for certain items. (Which is how MeatPuppet starting thinking that perhaps farmers are necessary in the world after all. They are the ones that keep these items coming.) As for a collapse, it all depends on how fast and how large a guild can get into action. The less time there is to react, the greater the chance of pulling it off. I mean, it's pretty easy to see these method coming your way. You could farm mobs, but if you've reached that point to get an item or drop, it's a lot of effort to go through when you could pop over to the AH and get it for dirt cheap (unless hyperinflation is underway, but let's assume that it hasn't). If you're level 60, you're going to get gold instead of experience farming mobs so if you're just doing it to get items to sell at the AH... you've got the gold from the mob so why bother? Tell me if I'm just not getting something from your example.

Arentol, those are some great comments on money-sinks. I swear that I've also mentioned them (can't search while I'm typing on this laptop). Anyway, everything you''ve said is pretty much correct as far as I know. The only thing I'd disagree with is the trade between players. The gold isn't removed from the game, even if you are buying a BoE item. The other player has it and it's continuing on. As long as you're buying anything from a vendor, then yes, it is a money-sink.

I'm not entirely convinced that there are enough money-sinks in WoW at the moment. Everquest is a great example of how expansions are a great tool for keeping inflation down. WoW hasn't had that many expansions (give it time) which is why we think it's possible. When we first started discussing this, we made a mental lists of all the ways that gold is generated in the game and all the ways it's taken out. (Perhaps we could do it here.) Now a lot of this is guesswork, but my biggest fear is that as level 60 characters run out of things to spend gold on, they just keep generating more gold. I'd be extremely curious to get a peek behind the scenes on the server and see how much money is floating around out there.

Which brings me to Flaw #3 in our plan. In order to stage a "endgame" hyperinflation, the group in control of the market needs to cause more gold saving overall in the game than is being generated. The guild just needs to convince the public at large to save their money (or spend it at the guild's auctions) while the guild in charge saves money and slowly jack up prices in their monopoly markets. If the guild fails to horde enough gold in reserve, the whole plan fails.

That's why we've suggested that Blizzard do more things to cause things to decay/spoil/rot in the world than just armor and weapons. Correct me if I'm wrong, but the pricing for repairs isn't a flat rate. It's based on level/skill and raw materials right? And those prices vary if I remember my conversation correctly. I want to say that this is right and we figured out a way to jack prices up on repairs somehow to prevent or make repairs very difficult. Dang it, I'll have to talk to MP tomorrow and have him remind me.

Anyway, I'm going to search around and find some WoW long term economic data if I can. Nothing like having good ol' data to crunch and project out.

 

[ikellensbro]

That's why we've suggested that Blizzard do more things to cause things to decay/spoil/rot in the world than just armor and weapons. Correct me if I'm wrong, but the pricing for repairs isn't a flat rate. It's based on level/skill and raw materials right? And those prices vary if I remember my conversation correctly. I want to say that this is right and we figured out a way to jack prices up on repairs somehow to prevent or make repairs very difficult. Dang it, I'll have to talk to MP tomorrow and have him remind me.

Anyway, I'm going to search around and find some WoW long term economic data if I can. Nothing like having good ol' data to crunch and project out.

That is one of a warrior's greatest complaints - repairing in raids. The Thunderfury, all T1/T2 for tanking and full epic DPS gear warrior in my guild would have to pay 70g for a complete repair, which frequently happens. In general, most people don't farm because they want to, they do it for gold, for a tradeskill pattern, for some new quest, for reputation, etc.

The fact that most end-game costs are for enchantments, repairs, and regeants (if raidng) keeps people accumulating gold only to spend it. For enchantments, this does keep the gold in a the economy, but to get the materials requires plenty of effort by some people to get them.

 

[Talon]

That is one of a warrior's greatest complaints - repairing in raids. The Thunderfury, all T1/T2 for tanking and full epic DPS gear warrior in my guild would have to pay 70g for a complete repair, which frequently happens.

Exagerate much? Full Tier 2 wouldn't even approach half of that.

 

[Gongo]

Exagerate much? Full Tier 2 wouldn't even approach half of that.

maybe but not by much. My warrior is Full T2, with 5/9 T3 and a full DPS set/hand of rag.

the most i've shelled out to a bot is 59g and i wasnt fully broken yet.

 

[Talon]

We went through two bots last night. Full Wrath with 3 pieces of Dreadnaught including Shoulders, Widow's Remorse and Bulwark. Both times were single digit durability, neither repair exceeded 25g, in fact, thinking back I don't think either was over 20.

Contrast that with the real cost of raiding: Consumables. 10-15g per attempt far outstrips ~2g per death. Repairs are an inconvience, it's the potions, flasks, jujus, food, drink, etc that are the real issue, and the price of each is directly tied to the AH economy.

 

[dotK]

maybe but not by much. My warrior is Full T2, with 5/9 T3 and a full DPS set/hand of rag.

the most i've shelled out to a bot is 59g and i wasnt fully broken yet.

You must have had a lot of broken things in your bags.