The Flipper: Hero of the Markets

With the result that there is now lots of lemonade available, but nobody who actually wants a glass of lemonade can get any for less than $1.

Wait, that can't be right, flippers don't cause prices to rise...

And you still make 50 cents profit each glass!

You're talking about different systems, though. Your analogy was an advertised fixed-price system. The buyer knows exactly what they'll pay, and the seller knows exactly what they'll get.

In the double-blind consignment house of City of Heroes, salvage flippers have a stabilizing effect. They'll stop the price from tanking to nothing, which means there will be a steady supply, which means you don't get spikes into the hundreds of thousands near as often. Even then, because the flippers can't establish perfect control of supply without being some kind of robot, you can always get it for the price the flipper is willing to pay.

Actually, this seems to illustrate a common misconception about the consignment house. It is NOT a store, it's a commodities exchange. That ten tons of potatoes (white salvage) doesn't get a fixed price tag and a spot on the shelf, it goes for whatever the market will bear, with middle-men that will try to grab it up cheap and sell it high. If you want to supply your store with french fries, you can either pay the 'going rate' (buy it nao) or wait to find it on the cheap (lowball and check back in ten minutes).

That is, in fact, not what happens.

Exactly.

So let's think it through. What is the next event? Well, we have the "flipper" sitting there with lemonade at $2 a glass, and he's gonna lower prices to get it sold, he's not just gonna sit there waiting. So he's going to drop his price below $1.50.

Eventually, you will end up with an equilibrium price at which you're making money, but not making so much money per glass that someone can cost-effectively undercut you. That price might well be under 15 cents.

And here's the cool thing. If that price is over 15 cents, it almost certainly means that, if you stuck with 15 cents, you'd run out of lemonade before you ran out of customers, and some people couldn't get any lemonade at all.

Markets are really pretty good at this stuff.

Forget the potatoes. I always buy up the frozen concentrated orange juice.

Just make sure you've got your hands on the correct crop report.

Surpluses, where more items are willing to be sold than bought at a specific price, do happen in real life and do happen in the City of Heroes markets. Surpluses are prices above the Equilibrium Price. Some surpluses are caused by flippers and some surpluses are exacerbated by flippers. As you described in your next paragraphs, market forces do exist that will cause prices to, eventually, move towards equilibrium price. Those forces can take time and the Equilibrium Price is constantly changing.

The important lesson to learn from Surpluses and "flippers cause prices to rise" is being able to identify when such an event is occurring. Identifying items in a surplus situation can be difficult and be guesswork but some methods frequently provide useful information. I find comparing the # of items for sale to other items of similar quality and drop pool to be the most telling datum if an item is in Surplus or not. The amount of bids is usual not an important factor because a vast quantity of bids may be at 1 or some other low and insignificant amount. The number of items for sale corresponds to actual items that are listed at a price that someone has yet to be satisfied.

In summation, if you see the # of items for sale and price rise on a specific item this may be an indication that price is rising above equilibrium price. Key word: MAY. Here are some examples:


Both items are in the Task Force drop pool. Notice how the one has a significant amount more for sale despite it being a lower price. Possibly, the Chance for Smashing is in a Surplus situation where more items are willing and able to be sold than are willing and and to be bought at a price of around 25M. I have been tracking the # for sale on that item and it has risen significantly since Going Rogue's release. I have no tracked the Oblit: Quad and cannot comment if the amount has risen nor fallen.

However, the Chance has been exacerbated by a flipper:

I bought 100 or 150 or so before Going Rogue around 10. I haven't been in a hurry to sell and have been leaking them out slowly.

Contrast the status of these items to many purple recipe. The price has been rising AND the number for sale has been falling. That is likely a Shortage situation. In a shortage, price is below Equilibrium price. In other words: price is too low.

A more apt comparison would be to use garbage instead of lemonade. Lemonade is not produced in regular quantities while doing "every day" stuff. Garbage however, is produced fairly regularly while you do your "every day" stuff.

Aside from research, you probably listed your lemonade for $0.15 because that's what the kid up the street sold his for. Over on the next block people were buying lemonade for $5.00 a glass, but that's neither here nor there.

If you didn't list because of the kid up the street, you might have picked $0.15 because that's all a glass of lemonade is worth to you. Had you been the construction worker busting asphalt in 110 degree weather, you may find that $5.00 is more than fair.

Perceived value of an item, any item, depends entirely on circumstances and experiences. Candles are cheap, but most people would usually say they wished they had more when the power goes out. So why didn't they buy more when the power was on?



For those who ascertain that flippers drive up the prices and most people bid creep for most items I submit my experiment:

I did some leveling on my level 4 (now 9) 88's character. I got drops! I put them all on WW and sold a number of them immediately to existing bids. 6 things did not sell immediately due to no bids being placed. I went to bed.

When I logged in:

You have 0 bought and 4 sold items in the Consignment House.

I pop open the "Sold" tab and this is what I see:



I listed every last one of those for 1 inf. Remember, these items had 0 outstanding bids.

Bid creepers? The recipe is the only thing that might even pass for bid creeping - 25% of my sample. However, that person could have bid 1 and got my recipe. They chose to overpay by 10,000%.

The inert gas and improvised cybernetic: 1,000,000%
The stabilized mutant genome: 555,500%


People don't bid creep. They're sheep. Hell, I count on it and make great money from it. I have begun a venture lately on high-end items. Things with lots of 0's at the end. I buy a recipe, I buy the parts. I list it for cost + 10% to cover fees. If someone bids what I'm asking for it, I break even. Nothing more.

People constantly pay me twice my asking price. Why? Because bid creeping is hard work yo!

There's a reason bid creeping is the first topic in my "Keep your shirt" guide. Its the thing that can save your average player a TON of inf. The truth is the vast majority of players do not bid creep at all.

Yea, i know. I just find it more boring than farming. But that's me. At least farming, i get to bash stuff! LOL. Although, i may do like alot of you and just sit a dummy toon at WW bidding and selling. lol. O well, can i be in "the in crowd" nao?!?!? (jk of course)

Heroes, Villains ♦ Reviews ♦ Retrospect

I want this as a base item.

How versatile. Because you're also doing a pretty good job of making yourself look foolish.


Are we on this again? Do you seriously not get the difference between flipping and crafting?


Sorry, but no. If you decide to shoehorn real life into terms used in this game, I guess this might work. In real life, though, there are finer gradations. A difference is recognized between 'speculating' and 'investing', for example.


All you showed is that you're redefining words to make your point. What was that about self-serving?

And you know we have just the base to put it in!

Also a money bin, like scrooge mcduck. What's the point of being rich if I can't swim in it?

Srsly!

Believe me, I know. Not long after GR came out, with the huge explosion in Tier 1 common salvage that even put Luck Charms under the 500 mark, I decided to try my hand at some market manipulation of my own. On both my level 50 badge collectors, I started buying up stacks of Clockwork Winders and Computer Viruses, crafting up level 25 Recharge IOs (from memorized recipes), and putting them up at a price calculated to cover the cost of salvage, crafting and market fee, with the smallest profit margin. I think at 400-500 for each salvage piece, it came out to something like 65k.

I kept putting up the IOs as fast as they were being sold, but the prices kept creeping up towards 300k. And those were *my* IOs selling for 300k. People apparently didn't try to haggle at all, they just threw up a "buy it now" bid for 300k and called it a day. If those were flippers, they would be extremely optimistic flippers.

I can try to blame flippers for the *perception* that this is what an IO is worth (at a level where SOs provide a better bonus, too), but I can't really argue that something that costs 55k to make is not worth 300k, if there are people willing to buy it at that price.

That exact same buyer and seller could have matched up without your help. If that had happened, the seller would have provided the market with reasonably priced goods, and the buyer may have gotten a good deal while paying money to the seller.

What exactly does the flipper contribute. He makes money for providing nothing of value. He's a leach on the system. A parasite who produces nothing and drains value.

It is argued that the presence of the flipper makes it actually worth it to sell some items on the market. As opposed to just vendoring, or deleteing the items because you will get less for them at the market than is worth listing.

If you cant follow that, it means that if people are not putting things on the market, there is no way for a buyer and seller to be matched up.

There are god only knows how many temporal analyzers, kinetic weapons, listed well below vendor at any given time. People find it worthwhile to list these things. Items where there is a need to consume them at a rate closer to the rate of production seem to sell above vendor pricing

And those with without ADD can low bid, wait 10 mins, and buy under the vendor price.

If I want to buy it now, I am willing to pay the premium for it.

I've done that before with a couple of things.
It's sort of the same thing that happened when I messed about with ancient bones, people saw there was inf to be made and started listing.

players like stuff they can count on- if you create an environment where they can count on selling their junk for a reasonable return, they'll happily sell it.

http://money.cnn.com/2010/10/01/mark...C_flash_crash/

Interesting how you read it that way.

I read it as someone with alot of money tried to rock the market and succeeded.

Edit: And a note it looks like he found a way to short on down ticks as well

Hey, it's not like I make a living off of doing this or anything. I must have misinterpreted it.

Oh wait, I DO do this for a living. Let me repeat the phrase that demonstrates the lack of flippers to stabilize: "In other words, the lack of buyers and the rapid selling of E-Mini futures contracts began to affect the underlying stocks and the broader stock indexes. "

I don't come to [YOUR PLACE OF EMPLOYMENT] and tell you how wrong you are at [CLEVER INNUENDO THAT INSINUATES YOU DO SOMETHING DEGRADING AND INSIGNIFICANT].