| Originally Posted by Standablaze |
Prism Powders are starting to be undercut on my server now, which has become my main source of income.
Its very very annoying. 30k last night, now its 25k and going down. I'll be losing about 30k profit total, not very nice. |
The world isn't nice, business isn't nice, and basic economics is made on the bases that no one is nice.
It's sad but true, for every winner, their is a loser, so the only relevant theory about market forces i.e. supply and demand, is that they balance each other out, so that no one wins and no one looses( equalibriant) and both are satisfied.
| Quote: |
| The mentality that we must undercut to move product has produced crafting scenerios where we must HQ in order to break even. Scenerio's where our large tier 11 and 31 craftables like HQ staves, SH, and Haubs, etc, are slowly becoming unprofitable to make, even in their HQ version. Specific items of interest being Triumph earrings, Hauberk +1, just to name a few, do not produce a profit. Hauberks +1 on Odin specifically sell for an overall 1 million gil loss, to cover the HQ averages. |
Ever heard of economics of scale? It's pretty similar to HQing. You take a lost to make profit. Because many can NQ and few can HQ and even fewer to HQ many.
Business is not fair, it's never fair, and the only way to defeat your "rivals" is to be as good as crafty....or cheat.
| Originally Posted by Omniblast |
| Is there a economist in the house? I remember reading a college thesis and article on the economics of a virtual economy, and I don't remember where I read it at. Does anyone have a link? |
There are lots of theories/thesis on virual market places. After all it's no different then any "model" you punch into a computer. Most are ebay, ish models, though, as you said different from FFxi AH model.
Simple rules tend to follow in virtual world more easily then real world though, due to the fact that most virtual world's are much more
simple.
I've said it many times and I'll say it again. Virtual world economics(ffxi) is often even easier to analyze then real world due to having less variables and more true economic "ideals".
Differences between rl and vr ffxi off the top of my head
No banks
More univerial/transparent knowledge (everyone knows the price is true, at any time they look)
No favoritism/cheating (excluding hackers you can't bribe the AH) all players are "equal"
No/low transportation cost
Instant transaction
No depreciation/ Identical items (SHa = SHb = SHc)
No transportation cost/time, transparency and no depreciation are very big issues when you get into economic theory. And it makes a world of difference in terms of undercutting too.
example:
In the real world buying a used ipod on ebay 50% off isn't the same as buying a new ipod. One has to do their research on seller, S&H, time to reach destination, damage, battery usage, scratches, warrenty, etc, etc etc.
While in FFxi a knife is a knife is a knife = cheapest = sell.