Friday, December 18, 2009

Present!

Christmas is coming, giving extra actuality to this post. You know in Christmas the people celebrate the extra discounts of the Black Friday by spending much more than they have using high-interest rate credit cards. The season reaches its climax on Dec 24 when the people give each other the loot and pretend to like the ones they got (really socials don't lie, they instantly recognize how much they desired for the 15th pair of red socks).

Of course there are some annoying naysayers who try to ruin the fun by babbling about a guy who was born in this time somewhere in the Middle East. They are completely wrong, he cannot have anything to do with the celebration of mindless vicarious consumption, as he spoiled the fun of the gift-stores (and naturally their customers).

However not this wonderful holiday inspired this post, but something that happened in the guild. Someone (let's call him Ted) asked on guild channel:
- What to do with looted blue BoE: put it to the guildbank or offer it on the gchat?
- Put it to the AH! - I replied, after deleting the original answer which was less than nice.

He offered a present to the fellow guildmembers and I found it stupid.

Let's see the best case scenario: Some other player (let's call him Bob) needed that item and would buy it in the AH without the gift. If Ted had put it to the AH for market price (you know things have value even if you farmed them yourself) then Bob would buy it. He would have the item and -price gold, Ted would have no item and price*0.95 gold. For the guild as a whole the item would stay, and the only loss would be the 0.05*price AH cut. We can live with that.

Let's see the sub-optimal scenario: the item cost more than it worths to Bob. I mean it's a fine item, but twinks pay 200G for it and its worth is way less than 200G for a leveling player. For 200G much more stats could be gained by buying greens to every slot + some cheap enchants. Bob would pay 80G for that item. This case he gains 80G value via the gift, and Ted just lost 200*0.95G opportunity cost. The guild as a whole lost 200*0.95-80 = 110G. Not much, right? Multiply it by 40 members and 20 BoEs during leveling. 88K!!! And high level BoEs worth more than 200G.

Let's see the worst case scenario: Bob is a moron. He'll be kicked from the guild in the minute I see him by the dummy as an example of what's happening with someone who can't figure out the basics. In this case all of the value of the item is lost to the guild. You can argue that if Ted is a moron, the guild gained the item. It's true, however morons have much worse chance to find useful stuff, exactly because they are morons. So the smart will give more wealth to the dumb than the opposite direction. That's why I hate welfare. Theoretically I would also get welfare if I'd be a drunken homeless, I just won't be one.

The best thing in the above is that I didn't even mention the Ted's interests. I keep talking about "the group" like a social. In best case, giving gifts is just as good for the group as not giving. In the average case it produces some waste. In worst case: wastes all value.

PS: I'm leveling JC so I'm creating lot of low level rings/necklaces. Not really great but better than an empty slot. Will I put it into the guildbank? No, I'm going to put it to the AH for dumping prices (as I don't need them) and announce on the guild channel that "leveling JC stuff below market price in the AH".

Blog update: I had to turn comment-pre-moderation on, like Tobold did. The trolls were not simply trolling, but spammed so many troll comments that made the comment section unreadable. I know that this make the blog less appropriate for discussion, but the old version became technically useless.

26 comments:

Nick S. said...

Thanks, Gev, for your insights. In one week, I've netted 30k gold by application of your explicit rules and by minor extrapolation therefrom.

I give "gifts" to the guild, but they build my social capital, which I value because I'm a bit of a social. :-P

Zeran said...

Wouldn't the 'best' thing for Tom to do as soon as you announce that you dumped them all on the ah be to flip them?

Also, I think you under value the interest that they have in making your project succeed or fail faster. This is not on their home server, and so every moment there comes at lost time on their home server, think opportunity cost. Which is hard to quantify as what would they be doing there?

Furthermore, by helping the members of the guild achieve level so they can fail the dummy test faster they help you weed out the weaklings faster, and so the guild doesn't waste as much time running them. Therefore, you must also consider the opportunity cost to the guild against the gains for the person on a tion they will likely abandon once the experiment is completed, they get bored and quit, or they fail out.

On a sidenote, what makes you think that a non-moron has better luck with random numbers than a moron? Presumably both are leveling as fast as possible, and so using similar strategies (queued while questing) thus they have the same probability to receive the random benefits of the random numbers.

Samus said...

Gevlon, why do you give people 100 gold just for signing up? It really surprised me that you did that. Leveling in WoW is extremely easy, you don't need any kind of "great gear" to do it. What's more, the smart people who can fend for themselves economically are who you want anyway, right?

Gevlon said...

@Zeran: if he want to help a guildie to level faster, give him money and he buys the best stuff (or not, showing he's a moron).

@Samus: it's a starter pack. No doubt that you can make money (that's the point of the blog) but you must farm your first golds to start trading. I saved them this farming time.

Samus said...

@Gevlon

Surely you can see the parallels with welfare, or at least the arguments for it. Nobody promoting welfare argues that you should pay people who choose not work (at least not here in the States). The arguments are basically the same, "it's just to help them get on their feet," that sort of thing.

It's just strange to see you of all people assuming the best in strangers, and giving them gold for nothing. Reading your blog doesn't seem like a very good test, you're constantly talking about the M&S who post comments here.

Gevlon said...

@Samus: they have an OBJECTIVE barrier before them, they are low level. It's like being a child. I never told that children should not get education unless they (and not the parents) pay for it. It's not their "fault" to be kids/low level.

Welfare leech have no objective barrier before them. They have the power to get money, they just don't use it (or drank the power away long ago).

Secondly they are not random strangers. They joined MY project. They shown some dedication to this project.

Thirdly, they don't DESERVE the gold, I just give them for my own reasons. It's charity at worst. Welfare is not charity. I can't choose not to pay tax for welfare. It's important because charity targets are aware that they got what they got from the mercy of helpful people. The welfare leech believes that he deserves welfare.

Anonymous said...

"So the smart will give more wealth to the dumb than the opposite direction."

If capitalism has shown one thing, then that that sentence is wrong.

Where do zhe ones called by you smart get their money from? From other smart people like you? No, from morons, i.e. dumb people. That's what you argue in other blog posts as well.

If what you said there was true, then there wouldn't be an aggregation of wealth in the hands of few and an increasing mass of poor.

Another point, if Ted was to give the item freely, wouldn't that also be charity like you defined it?

Anonymous said...

The welfare leech believes that he deserves welfare.

...or that people ignoring welfare are morons because it's some fine loot obtained through tiny farming efforts... totally worth taking!

Rolf said...

I mean it's a fine item, but twinks pay 200G for it and it really doesn't worth 200G for a leveling player

THis should be "I mean it's a fine item, but twinks pay 200g for it and it really isn't worth 200g for a leveling player"

Rolf said...

@Gevlon

I was under the impression you were appreciative of others correcting you.


I don't see why i'd make a comment when what your writing is based on sound reasoning, where what your writing is without fault. I could play the devils advocate, and come up with some obscure reason as to why your reasoning is wrong. But I happen to agree with what your writing.

What your saying is: Optimize value in the guild, which in turn optimizes leveling time.

Which at this point is the primary objective of the guild, so that you can get your raids going.

@Zeren
The way I understood Gevlons reasoning was that the morons spend more time bashing monsters due to inefficiency in the leveling process, which in turn gives them a larger amount of tries at getting said item.

Apply same process as above to farming cloth/silver whatever to make gold, seeing as those items are "free" in the morons world.

Gevlon said...

@Rolf: I'm under the impression, that you are baited by the troll "gevion". Be more careful.

The Gnome of Zurich said...

@Zeran: "Wouldn't the 'best' thing for Tom to do as soon as you announce that you dumped them all on the ah be to flip them?"

Possibly but unlikely. Greens have enough of a deposit that except for higher value (very good leveling or second/third best twink) items, they usually aren't worth trying to get full price for. Better to just make sure they sell (or better yet disenchant them and sell the mats), which means, unless Gevlon has chosen a stupidly low dump price, there won't be enough margin left to make very good profit after a 5% ah cut.

OTOH, Gevlon's cutoff for doing work (like DE or selling) is well over 1kg/hr, while a new char on the server has no 80 to make 500g/hr farming/dailies and may not have enough capital yet to do so trading, so there could be an opportunity there, which would be why Gevlon posted it in Gchat -- he's a tiny bit social after all!

Vulpina said...

Not terribly on topic, but on the subject of presents -- I live on an RP realm and gift-giving is commonplace, I buy a bunch of the wrapping paper from the vendor and put it on the AH for 2g/piece. People are eating it up! Oh so amused.

Tonus said...

@Samus: I think that there is a more practical reason for the +100 gold and bags that Gevlon is offering-- it is an incentive for people to join precisely because they won't have to worry about farming up gold/bags when they start on his server.

Whether it's money well spent is a good topic for the blog, though. Is there any way of determining a useful threshold? ie, would 50 gold and 2 bags draw as much interest as 100g and 4 bags? Or is this an occasion when Gevlon decided that sitting down to calculate the costs would have been a waste of time, given the ease with which he generates gold?

This leads to the question- are there times when it's better to skip the cost calculations?

Nielas said...

I am actually suprised at Gevlon's reaction to this. He is in fact sponsoring this 'experiment' for the purpose of getting many characters to level 80 so they could test out raiding in blues. To that purpose he is giving away gold so people could level faster.

Now one of the participants found an item that he needs but which could help another participant level faster. So following Gevlon's example he is giving it away to help speed the 'experiment' along. He obviously does not care about the gold value of the item since Gevlon is giving him more than enough gold to support his leveling.

If Gevlon does not think that the item in question is not going to help in the leveling process then he should hav told the guy that he would take it, AH it and then use the gold to sponsor more people in the experiment.

Furthermore, the people who received gold and bags from Gevlon are being sponsored. People who do not like to be leeches prefer to look at this type of sponsorship as a loan to be repaid at a later date. By offering the blue item back to the experiment the guy might have been trying to repay his 'loan'. (I know when I take stuff from the guild bank, I will try to replace it with something of similar value since I hate being a leech).

Gevlon said...

@Nielas: I'm giving GOLD, not item. The problem with gifts is usually the middle case: it worth less to the recipient than it cost to the sender.

If he want to sponsor his buddy: sell the item on the AH and give him the price.

Carra said...

Not everything is about making as much gold as possible.

Giving a 100g item to someone you know in the guild might mean they'll be happy to help you on your next instance run.

And that can be worth a lot more then a few pennies.

biz0unce said...

What do you feel about this sort of case, when it comes to welfare? After being let go from my place of work (projectionist in a movie theater), and then going on welfare for about a 3 month period due to not being able to find work (Read:Michigan Economy) until I was able to land another job. While I don't feel I quite "deserved" it, it did save my ass for that period of time, and was quite thankful.

Nielas said...

@Gevlon
My point is that the item is probably worth very little to the sender. An initial stake of 100g should be quite enough to get them to level 80. 200g is not something to sneeze off even at level 80 but the goal of this character are very limited and played properly should not need that gold to gear up for your 'experiment'. It's pretty trivial for an experienced player (which I assume your rerolls to be) to level 1-80 on quest rewards and the occasional crafted green.

Also since the player is new to the server and likely not familar with the blue twink market, he is not gonna get 'market value' for the item. He is likely to severly undersell it unless he spends time studying the AH so loses time from leveling.

If I were to participate in your experiment (can't since I am on a US server) I would consider an item like that to be truly 'farmed for free' since I got it doing and activity I would have done anyway AND selling the item for market value would have no marginal utility. Heck, I might not even bother trying to offer it to anyone and just tossed it in the bank and forgotten about it.

The way I understand the 'goblin way' is that big part of it is that you do not 'sweat the little stuff' and instead take a big picture approach. My view of the big picture here is that the opportunity cost of trying to sell the item is bigger than that of just giving it away which might be bigger than just tossing it in the bank or vendoring it.

The Gnome of Zurich said...

Here's my take. I don't have a problem with the guy who puts a 200+g item in the guild bank. But he's signaling to me that if he isn't a moron, he doesn't need my gold, he's already goblined his way to not caring much about 200g (yes it will speed leveling, but not by much more than a 5-10g green or cheaper 20-30g blue in the same spot) and not by as much as a full set of 5-20g blue and green items. If you don't have enough gold yet to make 1000g an hour in trading, arbitrage and craft industry, you should be selling those 200g items, because 200g is a not insignificant amount of time to you right now.

That said, I have more of a problem with the guy who *equips* the 200g twink item because that destroys its value. Putting in the guild bank lets somebody else pull it out and sell it (and I will do so if I see an item like that in the Undergeared US guild bank).

I don't put 200g items on my leveling characters when I have 60k in the bank, you don't need to put them on your leveling characters.

Think about the advantage. You will be of a level where that item matters for maybe 3-4 levels at most before some 10g green/trash blue is just as good (sometimes only 1 level before a lvl 20/30/40 blue is actually slightly better but much less valuable). This takes maybe an hour or two of play time at low levels. Will one awesome item save you more than a a few minutes? I don't think so. At the higher levels (60+) it makes more sense, because it might take 20-25 hours of playtime before you make that item obsolete by leveling past it.

Samus said...

@Nielas

It's important to understand why Gevlon is giving the gold. It is not to buy what you need while leveling. Unless you are terrible with gold, doing things like buying frivolous items you're going to level out of in a matter of hours anyway, the quests and loot you pick up on the way will provide you with more than enough.

The gold is for you to start making money on the AH. Once you are 80, there are plenty of large expenses. To have enough, you need to start working the AH early, and that requires gold. 100g is as good an amount as any.

However, Gevlon, I would say that you should tell your members to take Skinning and either Mining or Herbalism, at least for 1-79. They may wind up being time sinks at 80, but if you only pick up the stuff you come across while leveling anyway, the profit to time spent ratio is very high. Especially Skinning, you're already standing over the corpse.

Also, even if you are planning on doing crafting like Leatherworking, you still want to take 2 gathering professions. Simply mail all the leather you gather to a bank alt until you hit 80. That's when you can drop the other gathering profession and pick up Leatherworking, and level it all at once.

Anonymous said...

"PS: I'm going to spend around 100K on this project. So I'll have reason to make gold (= post about making gold) again." - Gevlon

What does it matter that he gave cash to other people working on his project? It is not like he values it very much anymore. It is not particularly rare or hard to come by. This is as much an experiment determining what else can be done with in game cash as what can be tackled undergeared. Buying his way into a progression guild was a similar experiment.

Lets face it. Blizzard discourages hoarding by making very little out right purchasable in the endgame save crafting orbs and its ilk and gold sink mounts.

My personal threshold is half gold cap. I enjoy playing the ah, but I loose both urgency and motivation when I can barely find use for my cash, let alone need.

Jeanie said...

There is something wrong with the examples in the post.
Let's compare what Teb and Bob got in the two scenarios (the AH cut is ignore btw): in the "best case scenario", Bob has 200 less gold and the item, while Ted has 200 more gold. In the "sub-optimal scenario", Bob has 80 less gold and the item, while Ted has 80more gold. So if you're talking about the guild as a whole, then it doesnt lose anything (while it's true that Ted has 120 less gold, it must be noted that Bob has 120 more gold comparing with the previous scenario)
That said, I think the idea of the post is correct (ie put it on the AH), however, the best case scenario should be changed : some random guy buys the item, Ted gains 200 gold, and that 200 gold benefits the guild more than the item benefit Bob.

Blade said...

The way I see it... if Gevlon chooses to give his guildmate gold, who are we to question why?
It's actually rather intelligent.
Here's why:
Gevlon gives the item to the noob. The noob equips the item, then vendors it later once he's outgrown it. We're not talking an item for lv80s here... we're talking twink garbage. Therefore, it's a wasted item on a low-level if he's NOT going to be a twink... all social interactivity aside.
If you give the noob gold, however, the noob will use the gold to possibly equip himself, buy food or whatever... perhaps even from the AH as stated (greens and enchants). Most people (admittedly myself included) don't look too closely at the names posting the items on the AH; if someone was to point our noob in the direction of the AH and he happens to buy something he needs... what are the odds that our intrepid Goblin has put something there for him to buy?
So our noob learns some basic AH useage and some useful at-level items, and our Goblin may even get a chunk of his money back!
Win-win.
There's only so much hand-holding one can do; it's not rocket surgery, it's capitalism. =)

Gevlon said...

@Nielas: running auctioneer is not a big deal. They play on a server with any goal that will need gold (on 80 the crafted items can cost 2-300G, dual spec, fly skill). They should scan the AH every day. Having a lvl1 bank alt ran to silvermoon isn't a big deal. So I don't see much overhead on AH-ing.

@Gnome: theoretically you are right, equiping the item destroys it. But selling a gift or something you took free from the gbank is considered "ninjaing" by most people and don't do it. I do cleanse the gbank from trash and sell it, but I'm anti-social.

@Samus: I already told them to be dual gatherers.

@Jeanie: "some random guy buys the item, Ted gains 200 gold, and that 200 gold benefits the guild more than the item benefit Bob." is absolutely correct, however it is equal to saying: "Bob would pay 80G for that item. This case he gains 80G value via the gift, and Ted just lost 200*0.95G opportunity cost."

Nielas said...

To each his own, I guess.

I simply do not consider 'working the AH' to be a necessary part of this exercise and just distraction. For me the requirements of the experiment can be easily met without touching the AH so it seems like a waste of time since you are not going to need the extra gold at 80 anyway. I am not gonna save it up for a chopper or mammoth. :)

But then I guess I might just be too hyper-efficient with my gold compared to other players. For me the opportunity cost of that extra 200g is just too high. Others might not be so good with their gold or simply lack the game knowledge I have accumulated over the years.

So I guess for the Tom in your scenario, selling the item on the AH might have been the proper action if he was not like me.

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