Max_zero
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Quote:There is no way to get around it. Flippers make profit from making the IOs they list more expensive then they were before.Originally Posted by UberGuy
I wonder if you would directly quote where someone told you that, because I reviewed the last couple pages (at 50 posts per page) and didn't find that claim. The closest thing I saw is that multiple flippers raises sale competition which accelerates price collapse, which is not the same thing as saying it lowers the price. (Just the price ceiling.)
They may well lower the price ceiling. But if they hadn't flipped those IOs the price ceiling would of been lowered even more (because flippers raise the price of every IO they list). -
Quote:How do they collapse the top end? The IOs still list at 'buy it naow' are unaffected.Originally Posted by UberGuy
I never said they don't touch the top end. I said they don't raise it. A flipper tends to collapse the low and high prices towards one another. A flipper hopes people buy their product at the highest price out there, but they list at a lower price in order to promote that their item is the one bought. If anyone actually notices that, the top-end price trends downwards.
Would the newly flipped IOs be cheaper then the top end? Yes. Would they be even lower if they weren't flipped? Yes.
Flippers raised prices. -
Quote:I wonder how many would accept the volatility in exchange for lower average prices? Paying an awfully high price for some rather nebulous stability.Originally Posted by UberGuy
You misunderstand. The claim is not that the flipper personally adds supply. The claim is that the flipper's activity attracts more sellers. Market instability dissuades sellers. Easily viewable price trends in the sale history make sellers who are not avid marketeers more prone to list their good at that trend price. They feel more confident that they can pick out a price that neither leaves them with an overpriced item nor sells for far less than its current worth.
What? What are you even talking about?
In order to sell goods, a flipper has to buy them. If they bid for 1 inf, they won't buy anything. They have to outbid other buyers. If I'm a flipper and there's another flipper, I have to outbid that other flipper to buy stuff. The other flipper is also selling, and if I want my purchases to sell, I have to undercut his sale price. If no one ever bid creeps to find our sale prices, then no, it won't matter. As a fairly high volume seller I can tell you that doesn't always happen near the price ceiling, and just one sale undercutting your sale price can leave you with a stack of inventory you can't sell for weeks or months.
For your second paragraph, whats your point? I deny none of it. But the fact of the matter is every IO you flip is listed at a higher price then when you bought it. That's the very nature of flipping. Yet flippers are telling me they are lowering the price. This goes against everything I have been taught about economics and it really makes no logical sense. -
Quote:Does not raise the average price? Excuse me?Originally Posted by UberGuy
You spent all that space posting nothing new except the links to the definition of rent. After that, you went on to repeat things that have already been discussed in the thread. You showed only that a flipper raises the price floor, not the price that lies somewhere statistically between the price floor and price ceiling. You did not show that the flipper raises either the ceiling or the average/median/equilibrium value (choose whatever trend collapse method best fits). The current price floor, or any low-ball price that happens along for that matter, is not the item's "going rate" in market terms. It's a part of a statistical clump of data moving around some other number.
If the flipper did not change that number, then they did not cause inflation. Nothing you posted addressed that, and everything I just said above has already been discussed.
How does repricing low priced IOs at a higher value while not touching the top end not raise the average price? It does not effect the high end (the buy it naow price) true. Unless the IOs at the high end are sold out. Then the newly listed prices (who become the new market rate) are very much inflationary.
Remember too not everything is sold at the going rate. If it did there would be no flippers.
At no point do flippers lower prices. At best they are neutral. -
Quote:Yep. Rent seeking profit. It's like how cyber squatters buy a website domain names cheap and sit of them trying to a get a much higher price later on.Originally Posted by Silver Gale
Okay, so flippers putting up bids for very low prices does *not* drive prices down because flippers can't control what people are willing to list at.
But flippers putting up items at a very high price *does* drive prices up, because flippers can control how much people are willing to spend on things.
Glad we got that cleared up.
In your first sentence the flipper can't effect the price because they do not have ownership of the capital. Since they do not provide the IO themselves they have to rely on someone else putting up a cheap IO for them to buy.
In the second sentence they do.
Ownership makes a difference. Can people bid lower for the newly priced IO? Of course. But increased demand with the same supply equals higher prices. -
Quote:How can you raise supply when you add no new IOs? You add no new IOs. Wait for that to sink in. How can you add the same IOs and say your increasing supply? It's gibberish. How can you raise supply when you add no new IOs to the market?Originally Posted by Obitus
His definition doesn't even fit.
Max procedes from the flawed premise that flippers do not (cannot, in his mind) increase either supply or demand. We know that increased movement of inventory is an incentive to sellers in the CoH economy, because players are severely inventory limited -- which means that supply is increased. We know that increased supply is an incentive to buyers to participate in the market, which means that demand is increased.
We also know that flippers cannot arbitrarily raise prices. In order to make a profit, the flipper must be able to buy low, but he also must be able to keep his asking prices low -- because the CoH market does not (contrary to Max's apparent assumption) sell your goods unless you have the lowest asking price. The highest bid is matched to the lowest listing in CoH.
That's why he's stuck with 14 Regenerative Tissues that he's not gonna sell anytime soon. And that's why, if he needs those market slots soonish, he's going to lose 49 million influence in listing fees. The dude doesn't know what he's doing.
Flippers benefit the market by increasing stability -- raising supply when demand is high, and raising demand when supply is high. In game terms, they make life easier for sellers who are inventory-limited, and make life easier for buyers who want items now. (Buyers are also inventory-limited, which is just one of many reasons that the impatient-bidding-prices we sometimes see on the market are not proof of irrational forces in the market.)
There is no magic button that any marketeer can push to raise prices. They cannot raise prices across the board, because -- as Max so helpfully points out -- they don't actually generate influence. They lower the inflating supply of influence through listing fees, in fact -- which is why StabBot's theory that flipping is the cause for the steady, across-the-board rise in prices cannot be taken seriously.
More flippers means more competition to list for the lowest asking price, which drives prices down. That is self-evident fact. Because you continue to ignore how the game's mechanics work, you cannot make an effective argument.
Further, and finally, the pre-merge Red-side market wasn't bereft of marketeers because they wanted a quick buck. It was bereft of participants because it wasn't active enough (a vicious cycle), which meant that you often couldn't buy the things that you wanted in a timely fashion, at any price.
See, having things to buy is sorta the point of making lots of money.
As for market slots. It's called email. Easy enough to run half a dozen toons at the AH.
More flippers does not drive the buy price down. You know why? Because you don't control what other people list that. How many flippers bidding makes no difference if no one is putting up the cheap IOs for them to buy. Flippers can bid whatever price they want. Go make a 100 bids for Regen uniques for 1 inf. Hell make a 1000. Make 10000. Do you think that will fall to 1 inf just because you bid for it at that price. Do you live in that much of a fantasy world? Is your understanding of economics that poor?
Apparently increasing demand, while keeping supply the same lowers the price. There goes 100 years of economic theory. Forget Adam Smith or Keyes, Obitus is going to change the face of economics!
http://www.mikeonads.com/wp-content/..._demand_11.JPG
There is a supply demand graph. Please show me how you lower the price without increasing supply. I really want to see it. -
Okay long post time. Time to end this.
Why flipping is rent seeking.
Quote:How does flipping fit this definition?In economics, rent seeking occurs when an individual, organization or firm seeks to earn income by capturing economic rent through manipulation or exploitation of the economic or political environment, rather than by earning profits through economic transactions and the production of added wealth.
http://www.blogtrepreneur.com/wp-con...upplygraph.JPG
This is a supply/demand graph. Very basic economics. Flipping is rent seeking because it raises the price without affecting either the supply curve or the demand curve. It does not affect the supply curve since flippers themselves add no new IOs. Any IOs they place on the market were already before the flipper arrive. Flippers do not affect the demand curve because if someone were willing to buy the IO at the inflated flipper price they would (logically) be willing to buy it at the lower (pre flipper) price. So no increase in demand. The key point (and i'll be referring to this often) is that any IO a flipper lists will be more expensive then what they bought it for. This is very important and I'll expand on it later.
Since flippers do not increase demand or supply (ie improvement in value or productivity) but raise prices their actions are inflationary and rent seeking.
Now how does this hurt the CoH economy?
Take this rather basic example:
Assume there is an IO where the current sell price is 70 mill. While the prices move up and down they stay around this 70 mil mark. Now let say someone comes along as lists the same IO for sale at 30 mil. There could be a number of reasons for this, they could inexperienced, miss click, or just really desperate to sell. In any case now the market has a number of IOs listed at 70 mil and one listed at 30 mil. It's quite possible that people (due to limited time or laziness) people may well continue to bid at 70 mil. Due to it's low cost the 30 mil IO will sell very quickly (at 50 mil over price). The buyer does not care (they do not know) but the selling is overjoyed. This I have no problem with. The seller contributed to the market and got lucky, nothing wrong with that. With the extra funds the seller can use them to purchase IOs of their own.
Whats also possible is that a buyer bid creeps and snags the IO at 30 mil and they get a bargain. The seller does not care (they listed at that price) but the buyer gets a bargain. With the savings the the buyer makes they can also put that towards buying other IOs.
The market works fine.
Now the flipper enters the picture. The flipper knows that sometimes the IOs are sold at lower prices so puts in a number of low bids in order to catch a few. Eventually they buy said IO at 30 mil. They immediately relist that IO at 50 mil. Its lower then the market price so that's good right? Well actually no, it's irrelevant. The flipper has no control over the the 70 mil IOs. They will list at 70 mil regardless of what the flipper does. All the flipper did was remove one 30 mil IO and replace it with a 50 mil IO. Simply the same IO 20 mil more expensive.
Now imagine if, for example, all the 70 mil IOs sold out. The next IO up for purchase would be for 50 mil. Flippers claim they are lowering the price but if they weren't there the next IO for sale would be 30 mil. Flippers claim "but no one would of found out about it!". Well they found it didn't they? Who is to say someone else wouldn't of found if not for them? Either way the IO when sold is now sold for 50 mil instead of 30 mil. There has been no price reduction either short nor long term. The flippers increased the price.
Now you can say "but people can bid against flippers for the cheap IOs!" Indeed they can but they won't always win of course, especially if they are a large number of flippers. Every time the flipper "wins" the IO instead of the IO going into a build and thereby increasing that players ability to create more IOs from playing (ie the capital is put to use) it instead goes back onto the AH where it benefits no one. Once it is sold it no more effectively then the IO sold at 30 mil but now the buyer has 20 mil more for it. Whenever a flipper wins the market loses because every time a flipper wins the capital (IO) increases in price (lowering demand) and is delayed from being employed (ie creating more IOs in the future). This is why flippers hurt the market.
The interesting thing is how many flippers there are at a particular IO is somewhat irrelevant for how much it costs. As said before flippers do not have any effect on supply. It does not matter whether there is one, ten or a hundred flippers at a particular IO, only a fixed amount will be listed at the low price at any one time. How many flippers bidding has zero effect on this. What eventually drives flippers away from an IO is that so many flippers arrive that it takes too long to get successful bids so they move to another IO that is more time efficient. It's for the this reason you didn't see many flippers Red Side pre merge. Not because there was potential for abuse (there was) but because it took to long for that manipulation to have results. Flippers are in it for a quick buck not the long haul.
The key point to remember is that an IOs are always cheaper before flippers. Always, if they wasn't it wouldn't be flipped now would it? Flippers can't control what other people list but any IO they list will always be more expensive then for what they bought it for (unless they screwed up).
Some flippers may say "but we reduce price volatility!". This is true. They do it by removing the cheap IOs and replacing them with more expensive ones. Thanks flippers! With friends like that who needs enemies?
They also say "well we keep the moving fluid!" This is a spurious argument at best. Flippers have no effect on supply (as started before). All they do is raise a price of an IO. Any 1st year economics student will tell you that any increase in price (without an equal increase in value) leads to a reduction in demand. Remember the supply/demand graph from earlier? If you keep supply the same and increase price demand falls. Lower demand equals a slower market not a faster one.
Finally they sometimes say "we keep people's slots open!" This is true but now that you can mail IOs between characters this is far less of a benefit then it might of been. In addition the only people who tend to fill up there slots to such an extent tend to be the flippers themselves. It seems a high price to pay for such a minor benefit.
The fact is flippers provide a negative net benefit (since they do sometimes free up slots) to the market. The only people that get a net positive benefit from flippers actions are flippers. Everyone else is worse off. -
Quote:Lazy people? If all prices were shown then the lowest shown would be the floor not what you arbitrarily decide it to be.Originally Posted by Lohenien
Yes. The normal price amounts are determined over time by supply and demand. Lazy people throw the equations off, while flippers restore values to normal levels.
You want to charge people an insane 70 million for regen tissues. I'm only charging 45 million. The floor on those ? 37 million. Why ? Because thats the floor I've set so long as I keep my bids there. Other people are bidding at 35 and 36 million. If they want to out bid me that will bring the price closer to the middle value of 40-45 million. This means the value of that IO has been shown to be 40-45m. -
Quote:Now the names start.Originally Posted by Obitus
Yes, lol, competition for customers is a bad thing. See what I did there? Ignoring content and saying whatever the heck you want may be a fun way to pass the time, but you're not going to convince anyone of anything by doing it.
Scratch that. In order to ignore the content of your post, there'd have to be some content to begin with. Enjoy your Koolaid, oh great populist agitator. -
Quote:That's why rent seeking is considered bad by every single economist.Originally Posted by Obitus
That's cute. Selective editing for the win. What if I just posted your above quote with the 'not' edited out?
Your addition has no reasoning to back it up. History, logic, and common sense all stand firmly against you. The game's mechanics stand against you, too. What part of "the lowest asking price fills the highest bid" don't you understand?
The flipper is called a flipper because he plays within the margin of error created by a lack of market activity. He can't simply decide what the prices are going to be. He has to have enough room and enough inactivity that he can sneak in the highest consistent bids and the lowest consistent listings to turn his market slots around in a timely fashion. This is all self-evident and irrefutable. -
Quote:Is there a rule that it has to be a certain amount?Originally Posted by Lohenien
Yes the low end comes up, because it TOO LOW.
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Quote:Just for the record I got around 14 Regenerative Tissue recipes through AE tickets and crafted and put them up at 70 mil.Originally Posted by Frogfather
I dont know about economic principles...
But RE: Proof of Price Falling
Please go look at Regenrative Tissue Uniques Level 30, the crafted version. More flippers got involved and my fun niche went from 60 to 70 million to 40 million. Dont know why those dopes were paying 70M when I was listing at 50 and change but there you go. Dont worry about me though, Ill be fine....I ran that risk when I started this up....
If you check the amount for sale there is a bit of a glut of them. It's why the price dropped. -
Quote:Yep.Originally Posted by Frogfather
The flipper is making money off the difference between the patient and the impatient.
What they don't do is add anything to market.
The market does not need flippers. Rent seeking profit takers a bad no matter what market they are in.
If someone wants to flip, be my guest, but don't try to pass it off as if your helping someone or that your doing the market a service. You are basically harming the market to make a rent seeking profit.
Anyways I am out for tonight (different timezones and all) and I look forward to the many posts of how flippers try to convince people (maybe themselves?) they are useful. -
Quote:Correct. That's all you needed to say.Originally Posted by Obitus
In the short term, they do.
My addition: And they do not lower the price in the long term. -
Quote:Why would it?Originally Posted by Lohenien
You completely fail to understand how things work. If the normal price range of something is 4 -7 million but you have a pile of people listing for 10-15 million and a pile of people listing at 1 inf what is likely to happen ? Flippers will notice this niche and come in to place bids in the 100 inf - 2m range. Next they will sell at the 3-6m price marks. Within a weeks time the IO that used to go for 10 -15 million has dropped in price down to its normal value of 4-7m.
If there a low prices, medium prices and high prices how does turning the low prices into medium prices cause the high prices to fall? Please point out the economic principle that supports that.
You cause and effect has absolutely no link. You add 3-4 million to the lowest priced IOs and say it lowers the highest price?! All you have done is raise the average price. -
Quote:LOL This is gold.Originally Posted by Lohenien
flipping and manipulating/cornering are not the same thing. Flipping works within the bounds of normal sale prices. Lets say common salvage X sells between 1k and 50k normally. A flipper will come along and buy at 100inf then relist it in the 1k-50k range, keeping supply available in the normal price range. The person that sold to the flipper is not helping supply because the salvage disappears before normal range bidders get a chance at it. Flippers ensure that items move at a higher floor, they raise the low bar to a respectable level that encourages stable supply.
If no flippers existed then there would never be any salvage available. Why ? Because if everyone listed at 1inf the salvages would sell instantly and then you would always have to wait in line to get salvage. The flippers prevent things from being unavailable due to dumb people listing too low.
People like you are completely ridiculous. One : the market is not a store, two : the market is pvp. You cannot moan and groan about not getting everything for 1 inf. You cannot reasonably prove that flippers cause a rise in price while supply is completely bonkers due to AE issues.
You want a real world example here: Wal-mart. They buy at wholesale and resell things at a higher price to customers. Those 'higher prices' happen to be lower than most competitors prices. Wal-mart flips goods. The real life issue is that other people can't compete with Wal-mart because they can't get goods at low prices as easily.
In CoH, however, you can compete with joe Wal-Marty and take his low priced goods for slightly higher than he is paying. Joe bids 100 you bid 101. This is the simple math that shows how you fail at CoH markets.
Apparently flippers are doing you a favour by making salvage cost more (even though other people say flippers don't raise prices). Thank you you flippers lol!
The fact is if all salvage went for 1 inf and there was none on the AH the price would go up. The price wouldn't stay at 1 inf. You can see this all the time with IOs which aren't being manipulated. The market does not not need flippers.
Nothing wrong with supply and demand prices but why do we need flippers in between? The market can take can of itself it is not helped (in fact it is detrimental) to have flippers involved in the transaction process. They are a pointless middleman who adds to the price of IOs while providing zero benefit.
Any other flippers want to take this point of view? Seriously.Quote:If no flippers existed then there would never be any salvage available. -
Quote:Yes but the fact is if the flipper wants to make a profit his relisted price HAS to be higher then the price he bought it for. No matter how you slice it the flipper makes the IO cost more.Originally Posted by Frogfather
Believe what you will. Nothing is stopping you from bidding 1 more than a flipper and getting it at the same price he's paying...
The reality is, at a given point in time of a flipper making a transaction he is the one willing to pay the most (helping out the seller) and willing to sell for the lowest (helping out the buyer). How is this bad? Most people look at the price they pay and think the flipper is bad...how about the price consumer sells for? You realize the flippers propping that up right?
Honestly I think the flipper has a nuetral effect on the market but I have no way to prove it. Maybe things move a decimal point if the flipper isnt involved but that would happen on both sides of the balance sheet so its a wash.
Also dont forget by adding a transaction in the middle the flipper burns more inf and helps fight inflation....which keeps all prices down. -
Quote:I can get it without the flipper there. The only difference is without the flipper it's cheaper.Originally Posted by Nethergoat
flippers add value by ensuring what you want is there when you want it- temporal value, if you will. If you *want* to tie up a slot and wait a while to get a 'deal', that option is there. If your slots and time are worth more to you than a negligible inf savings, the flipper is there to ensure you can get your widget NAO at market rates.
In a game environment where time is the only 'currency' with real value, that's an important service.
The IO was there before the flipper got there. Every middleman you add just adds to the price.
Get rid of the middleman save $$$. -
How does Flippers helps sell stuff faster? They raise the price and that makes things sell better? Interesting economics that. I mean they buy it cheap then relist at a higher price and that makes the economy work better? Please show me how that benefits anyone (except the flipper)? It reduces supply because capital is more expensive (thus making it harder to acquire). How does making capital harder to acquire make the economy work better, this I really got to see.
That fact is if everyone flipped (rent seeking) instead of farmed the market would collapse . That is undeniable. Flipping means manipulating the market is more profitable then expanding the market. Flipping only works because other people farm to provide the supply. Flippers stand in the way between buyers and sellers because they are not needed. It's funny how they say "we don't increase the prices!" yet will have threads where they gloat about the billions they make from doing that very thing (just for the record I am not poor in CoH). It's almost Goldman Sachs like in it's audacity.
Even wondered how Goldman Sachs makes so much money every when the US economy is tanking? There primary sources of revenue are rent seeking.
If we had open sale prices (and buying prices too for those who asked) it would give everyone better market knowledge. The more secretive a market is the more potential there is for abuse (see the derivatives market). It's funny a lot of the excuses I see from people here are the same excuses Goldman Sachs uses too justify it's profits (oh we are stabilizing the price, we are helping allocate capital more effectively).
They ring just as hollow here. -
Quote:I have 7 toons sitting next to BMs/WWs. I have no lack of slots.Originally Posted by Adeon Hawkwood
In real life maybe, much less so in CoH. Market slots are a limited resource, and a marketeer is effectively acting as a wholesaler or distributor. They buy up small quantities of goods from multiple other players who want to sell quickly and then store them until the market needs them (using up their market slots in the process).
As for your marketing example you can do that on a open bidding system as well. Several times I have stockpile materials on my bank alts in WoW in preparation for a new patch. -
Quote:WoW's prices are very stable. If you have a page of sales at X price any new seller is not going to list a double the going rate are they? What you do is undercut the cheapest price by 1 copper, ideally just before raid time, so that the other seller won't get back to see it for an hour or two.Originally Posted by Adeon Hawkwood
I know that's what you meant. My point is that it doesn't actually change anything. The profit form any form of marketeering comes not from people unable to see prices but from price fluctuations over time. Allowing a buyer to see the exact price of an item when they are paying BUY IT NAO prices might same them maybe 10% of the price (based on how much people seem to overpay me by). Allowing them to see what the highs and lows were over the last 24 hours would save them quite a bit more (up to about 50% on most of the mid-range rare IOs) and decrease market volatility (well it would if we assume the majority of buyers are patient).
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Quote:So lets do away with the big creep and get everything out into the open. I'm sure the talented marketeers will still be able to make massive profits. I have over 100,000 gold in WoW so the system can work very well for smart sellers. Fighting undercutters, controlling supply, predicting supply spikes and future demand curves, I have done it all.Originally Posted by Nethergoat
What complaints?
On the forum richter scale whining about the price history doesn't even register.
What, you think the buyers are "abusing" the sellers by not bothering to bid creep and giving them too much inf?
Interesting! -
Quote:Rent seeking profits are very much against the interests of the free market and detrimental to the economy as a whole. Both in CoH and real life.Originally Posted by Chyll
Not in the least. Informed buyers get that way only through effort - even in the real world.
And if I place my orders knowing I am not planning to get the item NOAW!! I almost always get the price I want - regardless of what the previous 5 said. But when I do want something NOAW, I can still sometimes get a bargain and if not, at least I know that I made the choice for my own reasons. The 'ebil marketeers' just spend the time to work in these spaces to optimize their gain - which is generally not nefarious or even contrary to free market realities. -
Quote:Engaging for you maybe. But judging from the complaints you hear about the Blind Bidding system it seems you are in the minority.Originally Posted by Nethergoat
I prefer activity to passivity.
This system requires meaningful decision-making for both sellers AND buyers as they engage in a dialogue on what Widget X is 'worth'.
Where in Another Game(tm) the input of the buyer is limited to scanning down to the bottom of the list and buying the cheapest Widget X on offer, CoH requires exploration if the buyer wants to get the best deal. Getting the best deal requires effort, which seems to me a better result for a game where the market is as much mini-game as mercantile interface.
It isn't the most efficient system, but it is definitely more engaging than "here's the list, buy the cheapest thing on offer".
You like the AH as a mini game, a lot of people don't. Add to that the amount it gets abused and I'm really struggling for a reason to keep it. -
Quote:Why not have all prices listed then? Doesn't hurt you does it? Why do you want to restrict the information buyers have?Originally Posted by Nethergoat
this competition already exists if the buyer cares enough to investigate prices.
I don't see requiring a tiny bit of effort from the buyer as a major imposition.
People who want deals can absolutely find them.
Seems very protectionist and not very free market.