Greedy Goblin

Sunday, December 28, 2008

Don't curse, solve it!

I've read a shocking post on The WoW Economist. It was a rant about a businessman, who came up with the "wonderful" idea of controlling the market. It wouldn't be interesting, there is a moron like that every other day.

What hit me that even a professional businessman can lose rationality over something "evil", starting cursing instead of acting.

In the post the wannabe monopolist bought up all the strange dusts and relisted them for 566%, 8.5G/stack. Our dear economist's reaction was "It was dumb, he’s an idiot, a moron and let me tell you why. What this guy did was basically turn people away from entering the profession who were new to the game, therefore eliminated future profit making opportunities from those people. The price point was so high that even the reasonable well funded alt isn’t going to pay that price. "

Actually it's not true. Turning away people from entering the profession is not "dumb", since enchanters are competitors of each other. Every non-enchanter is someone who don't overbid my armor and weapon bid just to undercut my dust and essence auction. This action harmed the "society", and on this a good person can get angry. When I say "can", I mean, "you can do it just like putting a huge pink feather into your butt, flipping with your arms and shouting I'm a bird". Possible, legal, allowed, so you can. But it won't help you in any problems, just like the useless emotion of anger.

The WoW economist also foretold, that our wannabe monopolist "the only thing it will get you, is your name well remembered or a nasty email" So somehow the "people" will punish him. This is vain hope. A real new player, not knowing the prices will not notice that this item is "overpriced", just that it's expensive, so he won't blame anyone for it.

BTW my dear colleague is wrong in "If the guy had half a brain he would have made his moves at the 2nd level (Soul Dust) and 3rd level (Vision Dust) mats." The wannabe monopolist made the smartest move he could do. Most people who want low level dusts are either switching profession or an alt. Real new players get enough green quest rewards to disenchant. Alts and profession switchers have lot of gold, and can get more gold from daily quests. They will not waste half an hour in Deadmines to save 8.5G, due to the opportunity cost of not-going-to-daily. On the other hand if our wannabe monopolist tried to pull this trick on the 5-6G/stack Vision Dust, overpricing it to 566% he would have to sell it for 28-34G/stack, much better reason for the buyer to go AoE grind RFK instead.

My experience from the flower business (bought 1000 stacks! of herbs and sold them when inscription was introduced):
  • Tier 1 (peacebloom and co) used to be 1-2G, sold all instantly for 10-12G
  • Tier 2 (mageroyal and co) used to be 2-3G, sold all instantly for 15-16G
  • Tier 3 (liferoot and co) used to be 4-5G, sold all in 2-3 days for 19-20G
  • Tier 4 (goldthorn and co) used to be 7-8G, sold all in 2-3 days for 20-25G
  • Tier 5 (sungrass and co) used to be 10-12G, sold all in a week for 25-30G
  • Tier 6 (Icecap and co) used to be 15-19G, took a month to sell them for 20-30G, selling for 20 at the end
  • Tier 6 (outland herbs) used to be 20-25G, still selling the damn things for 15-20!
The people don't look at premium percentages, they look at absolute price. If it's too high for them, they go farm instead of buying. I'm sure they had some un-Christmas wishes for me when they saw my 12G stacks (6-700%) of peacebloom, but their alternative option was running up and down in Mulgore for daisies so they just bought it. When they saw my 40G/stack icecap ("just" 240%), they gave me a finger and went to Winterspring. I had to cut price soon. Picking icecap takes exactly the same time for a lvl70 than picking peacebloom. In Outland, due to the flying mount, herbing is much easier, so I ended up with a loss in that segment.

All in one: our wannabe monopolist did the very smartest thing that one can do with monopoly. And the dear WoW Economist replied with an angry rant about how "harmful" it was and put a not so nice picture about this guy (seen in this post too), to display how much he don't like him.

So what? He wanted money and not liking. If he reads the post, he most probably laughs thinking "I'm not only made some easy money but even the WoW economist himself couldn't stop me and only got away because of his packrat girlfriend. If he wouldn't be so lucky with his girlfriend (non-market factor), I'd own him too! I'm the king!".

Well, dear wannabe monopolist, you are not the king, just another moron. If you got money, it's only because people are not thinking, either because they are incapable in general, or because their mind is fogged with anger. If you would dare to pull this lame trick on my server the following things would happen to you:
  • One of my bankalts would roll tailoring
  • I'd buy all the linen cloth from the AH 1G/stack
  • Transform all to bolt of linen cloth, reaching slvl 50 in the process
  • Tailor them all to Brown Linen Robe
  • Disenchant them all, getting lot of Strange Dusts for 2G/stack material cost
  • I would list them for 3.8-4.2G/stack by different alts to hide that it's the action of one person
  • You would buy them all and relist them for 8.5G to protect your monopoly
  • I keep repeating the above, making 2G/stack profit on you until you run out of money or bank space
  • You are forced to accept my price, relisting your stuff for 4G
  • I keep repeating the above with 3G/stack, still making 1G/stack and lot of laughs
  • You are forced to accept my price, relisting your stuff for 3G
If the server is low on cloth, feel free to adjust the scheme for Braided Copper ring or Rugged Leather Pants.

I've saved my server from such wannabe monopolists countless times. And I made lot of money doing so: the wannabe monopolist is almost as good buyer as someone who have some dumb shorts to return - except such actions cannot be done in Azeroth. Doing good for the society for my own interest: the invisible hand in it's perfect form.

PS: while I was writing this, a guildmate asked about Expert Cookbook for his cooking skill. I told AH, and he replied it's all 9G (0.9G at the vendor)! It seemed that another moron, Ghoulette pulled this lame trick. A goblin's work is never done...


Cuthbert said...

I figured this was coming. John and I don't always see things the same way, and in my comment on the post I say as much.

Not everyone sees things in purely financial terms in the auction house. There is for some people a real need to feel that they are being "fair" in their pricing. They see the game as more of a virtual community, and hold themselves to standards other than profit maximization. These standards are subjective to say the least and serve a purpose only for them.

I personally don't believe that price gouging almost ever exists, or is even able to exist in the vast majority of market conditions.

Other people do though. Other people just as smart as you, that have different priorities.

For me personally, I charge as much for every auction as I think it will sell for. Otherwise, I see it as leaving money on the table. That's my point of view.

Fish said...

I cant believe Wow Economist would be up in arms over strange dust. If they sold AT ALL at that price, I would be surprised, there are just too many ways to get that dust, not just tailoring but skinning/leatherworking could do it easily, mining and jewelcrafting as well. I normally always disenchant crafted items for just this reason, it gives you dust to somewhat defray the cost of leveling.

The AH is just a basic exercise of supply and demand, if you think there is a demand at that price, go ahead, if you're wrong, you lose some $$.

Anonymous said...

The ramble here would make sense except for the fact that your micro-economic discussion doesn't necessarily match the macro-economic discussion of the blog you're referencing and here is why.

1. The more people in given profession the higher demand for leveling materials. You seem to make an assumption that everyone is going to be both an enchanter and AH House Player. A very small fraction of the player base. I make very little selling chants compared to actually trading materials. The amount of people needing enchants done will remain somewhat constant, increasing the amount of people needing enchanting materials is actually a good thing for you in the long term. Not just what you could make that day in the Auction House.

2. Why not make a play for soul dust or Vision Dust. I took The WoW Economst's advice and jumped on Vision Dust, which I made a market play and bagged a tidy profit of about 180 Gold in about 6 hours.

3. That writer was not entirely wrong, since strange dust is needed up to skill level 150 or so. After spending all the time to level to 150, you're not going to punch out, you're going to suck it up and pay the higher price, especially if you're leveling an alt.

At least that's my opinion.

How much are you selling the Titansteel soap boxes for?

Gevlon said...

@anonymus: bailing out and buying overpriced Soul Dusts are not the only options. You can wait a couple days and you can run a low level instance to gather greens.

Druanor said...

I just couldn't resist replying to this one. I have been reading your blog for a few weeks now and mostly I agree with your ideals. Mostly. This one however is pretty out on the edge, even for you.

First off I would recognize immediately what you were doing, and I wouldn't be FORCED into buying anything. I would simply wait for you to tire of the game and then go back to what I was doing before you so rudely intruded into MY market squeeze. Laughing all the while.

Secondly, if anyone spends anytime reading this blog, you will find out PDQ that it's all about schemes to generate gold via the AH. Right? That IS the general idea right? So what is wrong with this scheme? It's pretty common really, I have tried it before with mixed results. -shrug- To each his own.

Thirdly, did you appoint yourself the offical AH scheme killer on your server? I mean who voted you king and let you decide which schemes get used and which get your disdain appointed to it. Sheesh man, lighten up. You write up all these wonderful schemes and then you say you would go to all that trouble to undermine someone else's? And all that work over Strange Dust. I mean what do you care? I don't even use Strange Dust anymore, and I could care less whether someone tries to corner that market or not. It's an open market, and the OP was wrong to even voice his opinion about this behavior. Afterall I have seen much worse scams both in WoW and RL. Open market means just that, you can price your stuff however you want to, and if you make a profit on it then...SCORE, if not then you suck. Thats the way it works. Cut and dry.

Fourthly, and finally, you go to a lot of effort to degrade this guys scheme, while blithly publishing your own schemes on this blog. Look up the word hypocrite in your local dictionary and see if it applies to this whole post. I really expected you to congratulate the guy for his ingenuity instead of devising ways to undermine him. I am somewhat surprised at you. Didn't you just denounce Cuthbert the other day about morale values in relation to the AH? Did you just do the same thing here?

As I said, I just couldn't resist.

Kurt said...

Druanor, you don't seem to understand the difference between arbitraging and cornering. The "schemes" I've seen on this blog are either arbitraging between markets where other ppl are too lazy/busy to balance them properly, or investing, which is basically just an attempt to arbitrage between the present and the future based on logical analysis of what the future is likely to bring. Cornering the market is completely different, and since it provides Gevlon with an opportunity to make money the way he usually does, with all the risk being undergone by the attempted cornerer, it's only natural that he perceives it as kinda a dumb thing to do, yes? From the perspective of the attempted cornerer, you've either researched the market and know that what gev does is impossible, for example with vision dust, you know that there are no crafted items he can make cheap enough to disenchant into vision dust under your price, or you are just hoping that neither he nor any other arbitrager notices your attempt. In the first case you sound pretty smart, in the second case it's a risk...

But what I really don't understand is this point: "I would simply wait for you to tire of the game and then go back to what I was doing before you so rudely intruded into MY market squeeze."

If you give up, the game is over, how can he tire of the game when it's over? You lost money, he made money, then you gave up, I'm pretty sure I personally would never get tired of someone making me a bunch of money then giving up. Never ever.

Anonymous said...

Arrogance is probably what rubs me wrong the most about a post like this. Definitely someone blogging from a soapbox, or a titansteel soap box as another poster wrote (that was great by the way).

You probably should have posted in the original posters comments. But I guess you were short on writing material which they don't seem to have problems with. Atleast I haven't seen them spool out 1000 words on why someone else sucks. Your points were lost in writing style. You need to work on that. You come across as beligerent and without regard for anyone else's opinion.

Oh and I say this having read blogs and you both have very compelling points. You just fail on the fact that economics is a very opinion driven subject.

Druanor said...

Well Kurt....arbitrage, cornering, shorting, buy low-sell high, these are all ploys, schemes if you will, of market manipulation. Both in the AH and also in the RW. Concepts that are very common and even taught or at least passed on to people all over the world, for a very long time now. But understanding that distinction, while important, isn't germane to this conversation.

Apparently you didn't understand a couple of points, let me help you sort that out. And I quote you:

But what I really don't understand is this point: "I would simply wait for you to tire of the game and then go back to what I was doing before you so rudely intruded into MY market squeeze."

You didn't understand because you didn't take the time to think it though is all. It is dependent on an old psychological trick that you can play on people. A form of manipulation. Basically it amounts to letting the other person think they won, so that they forget about whatever it is your doing and this in turn, lets you go ahead and do what you were doing. So by temporarily withdrawing (ignoring his auctions in this case) he soon looses interest (after a couple of days when he sees your not responding to his ploy) and justifies it with that smug little thought of "I won". Just as soon as I see he isn't interested anymore I would put my auctions (at the inflated prices) back up and probably never hear from him again. I have used this technique more than once, and it works beautifully. Especially effective in chess, which is where I learned it.

But the biggest point you missed was my correlation between Gevlon's article and the ideals he espouses in this blog. I was taken aback enough to bother to post my opinion, and after all is IS just my opinion. I couldn't resist poking a little fun at Gevlon for it.

I hope that sorted things out for you, I do try to be helpful. OBTW? Another thing I learned was to not stick my nose into other peoples business, but the fact that you are defending Gevlon's article is commendable, to say the least. I am sure he appreciates all the help he can get.

Just one last point I would make. The whole subject of Strange Dust bothers me. I certainly wouldn't be bothered by someone trying to manipulate the Strange Dust market. Honestly? I don't think I would even notice it. I mean, I just don't even look at those markets anymore. I have moved onto much bigger and certainly more profitable items to sell to the unsuspecting people. Frankly Strange Dust is chump change, so to stoop to disrupting someone who is manipulating said market is what? Spiteful? Nasty? The "I pwned your Strange Dust market noob"? Hmmm you tell me. You see? That is what I took from that article.

Grzegorz said...

@Cuthbert: John was the guy who started the whole Strange Dust post in TheWoWEcon? I kinda miss the authors there, am I just blind or it be just to hide the identities?

@Anonymous: Arrogance, truly a comment like this from person protecting his own privacy so much scared to show his face?

@Druanor: Nice idea with this waiting trick. Both you and Gevlon have the point there as it all depends on the person on the other side. Will he be smart like you and wait Gevlon out? Or perhaps person undercutting the Strange Dust project, will just move to a more profitable market? Both strategies get you a win here, as everyone interested will make profit eventually.

As for the Strange Dust market, I suppose it can and happens in all sort of products there, like Expert Cookbook mentioned by Gevlon. So it's not like the whole subject should be viewed just as the Strange Dust.

Also I think the Gevlon post was more about making a profit of this situation rather then point it was just bad. But as Gevlon wrote "I've saved my server from such wannabe monopolists countless times.". Has he turned soft? Does he just hate monopolists?

Anonymous said...

I'm quite surprised by this post, because it's not quite your usual goblin self :)

I agree with your first part, saying that instead of cursing and ranting about the monopolist you can actually just take advantage of them and make profits. It is absolutely correct that this is the invisible hand of free markets at work, and a previous commenter is absolutely right in that it is actually a very risky business for the would-be monopolist (so it is dumb in that sense).

However, you then talk as if you are doing something good by challenging the monopolist. There is no such thing as a "true" value of goods in WoW, it all depends on whether people want to pay for it. If someone would rather pay 9g for the Expert Cookbook rather than buy it from Ashenvale, then that is their decision/lack of effort to google it and find out where to buy it. I'm actually surprised that you would actually bother to go all the way there just to buy some stock of Expert Cookbook and put it up, because the absolute profit is almost negligible compared to what a level 80 can make in that time. You didn't do your server a service in "driving prices down", it's just a natural free market working.

In short, arbitrage is perfectly natural, and there is absolutely nothing wrong with monopolies in WoW since no item is a necessity. If people are willing to pay for it, they will buy. If not, they will wait, farm it themselves and the price will drop or someone else will come in and undercut because there is no barrier to entry. No character has a superpower that only they can obtain a certain item.

So I think you also were caught up in emotion this time Gevlon :)

(Sorry can't log in to wordpress ID due to internet settings here)

Gevlon said...

@Pockie: I am hordie, the Expert cookbok vendor is in a village in Desolace, close to the flight point. And since I bought 20 of them, I will have some nice profit.

If I'd be ally, I could still pull this trick, by buying as many as my bags can hold it and send them to an alt. While the profit on 1 is small, the overhead is the same for 1 as for 60, I can fix the overhead-problem by quantity.

Cuthbert said...

John was the author of the post. His name is John Murphy. My name is Greg Murphy. No relation though as weird as that is. He doesn't sign his posts, but I do. Neither of us is particularly good with web design, so we are using a template right now, and it doesn't have a spot for the author's tag. I just sign mine at the end. is his site. He was kind enough to allow me to be a contributor there.

Kurt said...

"You didn't understand because you didn't take the time to think it though is all. It is dependent on an old psychological trick that you can play on people. A form of manipulation. Basically it amounts to letting the other person think they won, so that they forget about whatever it is your doing and this in turn, lets you go ahead and do what you were doing."

I did actually take the time to think it through, and it's pretty obvious that you are being emotional instead of rational here. You are responding to the emotional content of Gevlon's post, and so you fail to say anything about how you would distinguish between people just normally putting up items under your monopolist price when they see the price has gone up, and someone who's perceived your attempt and will persistently farm/craft/etc more items until your attempt fails. As far as I can see, you are arguing under the premise that someone will see your attempt to corner the market, send you an ingame mail taunting you, and then undercut you. Either that, or you are a psychic. Since in actuality, people don't give away what they are thinking, they do the opposite, using alts to disguise their actions, none of your points make any sense whatsoever. You're even making an analogy to the wrong game, chess is about full information and 2 players, the AH is more like poker, many players, disguise and bluff is possible. Basically what you are saying is that if someone starts to poach your big blinds, you will run away folding every time until he gets tired of the game and stops taking them. But that is nonsense, he will just keep taking them every time it comes up, the only way to stop someone like that is to stand up to them when the time is right. In fact, if I had to construct a chess analogy to this situation, it'd be that someone researched a counter to your pet opening, but instead of taking this in good humor as an opportunity to learn, you stopped going to the chess club for 3 months in hopes that he would forget the counter. I'm sure you had some other chess analogy in mind, but I don't see it--if you're just referring to someone forgetting where a piece is, that could only work vs. a horribad player, so I don't see the point.

"Frankly Strange Dust is chump change, so to stoop to disrupting someone who is manipulating said market is what? Spiteful? Nasty"

Why is it not similarly nasty and spiteful and stooping to manipulate the Strange Dust market in the first place? Don't get me wrong, I don't think either side is nasty or spiteful, I merely think one person is kinda dumb, and the other one is taking advantage of that. But since the only argument you present against entering the Strange Dust market is that it is chump change, shouldn't you be calling them both nasty and spiteful? I mean you said this "you so rudely intruded into MY market squeeze. ", which demonstrates you think cornering the market is not only good but somehow establishes dibs on the market-- I don't even know how to respond to that except to say it makes no sense to me. How about this quote--"It's an open market, and the OP was wrong to even voice his opinion about this behavior. Afterall I have seen much worse scams both in WoW and RL. Open market means just that, you can price your stuff however you want to, and if you make a profit on it then...SCORE, if not then you suck."

So, it's an open market, except when it's YOUR MARKET, and it's wrong to voice one's opinion about the open market, unless it's YOU DOING IT. Got it.

"OBTW? Another thing I learned was to not stick my nose into other peoples business, but the fact that you are defending Gevlon's article is commendable, to say the least."

It's not really accurate to say I'm defending his article, I'm mainly just criticizing your points. Similarly, your post is critical of his, and his post originated as a criticism of someone else's. Since you are the only one maintaining that this is a bad thing to do, that makes you the only hypocrite, though :( It's kinda sad that you keep getting exposed as a hypocrite, when you are the one who raised that accusation first, doesn't that bum you out?

jmurphy said...

So I got an email sent to me about this thread and figured I would come on over check the post out.

First, this has to be one of the most emotional post and threads I've seen on the a wow economy subject since I started blogging back in October. It's pretty exciting to see some many people active in the topic.

Second, it might bode well for everyone to maybe step back a bit, we're all friends here in the game and enthusiasts of the subject.

Third, for you commenting and chiming in for defense of my post, thanks its appreciated but don't fret too much. Greedy runs this blog, he has an audience that he caters just like I do as a blogger.

Fourth, I'm not one to consider myself always dead on right in the subject matter. No one is an expert on the subject of the WoW Economy. It's terribly hard to talk in terms of Economics without trying to correlate against substantive hard data. I consider myself a student of the subject and the WoW economy -hopefully you do too.

Fifth, yes we both write very differently. One is not necessarily better than the other. Just different and its the readers choice on preference style. Personally I enjoy trying to craft my blogs in a manner that trys to engage to readers. My goal is to have fun and hopefully get to learn something along the way.

Finally, point number six. Sometimes a blogger's post can get lost in translation. The post was really about denial of entry to a market and possible consequences. I didn't bash anyone because there really was no one to be bashed. The guy I saw in the Auction House was the same guy I've seen over the years and I thought it would make for an engaging topic. By this post and thread, I pretty much nailed it ha ha.

Anyway, that's my 2 cents regarding this post and subsequent thread. I thought chiming in was warranted based on how things were playing out in the comments.

Remember: Some days you can be 100% right, some days you can be only 90% right, some days you may be only 50% right or some days your opinion can be totally different when looked through the eyes of another. But at the end of the day, opinions and academic discussions are exactly that. Have fun with them.

The WoW Economist

Geen Lepel said...

For some reason they have removed that post. I think you bashing them has made them a bit butthurt,