lcpltom wrote:
> I worked for resturants, telecommunications, and now for a
> transportation technology company.
Yes, and? It's possible to work all your life and never study economics.
> Trust me, when the cost of an ingredient or service required to
> complete a product goes down, the savings isn't passed on to the
> customer.
It's not always passed along to the customer. It's often passed along to
the customer. That's why I can buy a gigabyte of RAM right now for about
40 bucks, when back in the late 90s I spent $450 for 16 megabytes. That's
why aluminum is cheap enough to use for disposable soft-drink cans,
instead of being reserved for ultra-special occasions like plating the top
of the Washington Monument. That's why cotton shirts from China are
cheaper than cotton shirts from a Seville Row tailor.
> something before I put my own item up for sale. If the cost of the
> mats to produce something comes down, but the comparable sale price of
> the finished product stays high, you better believe I am going to keep
> my price the same as everyone else's.
Sure. If that's the price the market will bear, better to keep making
money off it. There's a risk your product won't sell, and you can
minimize your risk by lowering the price a bit, but that's an individual
judgement call.
> If you are basing your prices on the cost of mats used to make it, you
> are probably underselling yourself. If instead you did what th real
> world does and keep prices comparable, you would make a lot more on
> the AH.
The real world doesn't do that. In the real world, everyone tries like
hell to differentiate their product from the competition in some fashion
so that they can command a price that's higher than the marginal cost of
production. When that's not possible, as when you have a commodity good,
you find that the end price to the consumer tracks extremely closely the
price of the raw material. And, of course, in the simplistic economy like
WoW, it's not possible to differentiate one guy's stack of mageweave from
another guy's, or one Primal Might from the next. And hey, guess what you
see? You see competition driving the price of manufactured goods down to
the marginal cost of production.
> If you set your buyout price to the same price as everyone else, but
> lower your starting bid, even by 1 copper, your item by default
> becomes the first one to come up whenever anyone else searches for
> it. This increases the chances that it will be bought, especially if
> you are selling mats, as most people will click the first one and just
> start buying everything from that one down.
Yep.
> Your idea of success is selling the product no matter what, my idea of
> success is selling the product for the highest profit.
The economy doesn't really care what your idea of success are. So stop
saying "Hurting the economy" when you really mean "Decreasing my profits."
> Then theres the issue of gathered mats. These items typically cost
> nothing to obtain in the first place,
Speaketh again someone who doesn't understand how an economy works.
There are two costs to gathered items. One cost is time. The second cost
is the opportunity cost - all the stuff you *weren't* obtaining when you
were out gathering those items.
> skinning knife and training. The cost involved with gathering these
> mats will never change, so according to you, the cost to sell them
> should never change either. Why then, would someone undercut the
> competition and lose out on profit for themselves?
To avoid the risk of not selling the item, and losing out on profit for
themselves.
> matter what. Mats especially. If everyone worked collectively to
> keep the price of mats steady, then collectively, everyone would make
> more gold than if they tried to compete with each other.
Yes. Now all you need to do is come up with a way to measure how much
items are "really" worth, other than by observing what people are willing
to pay for them. Then you can start cranking out Five Year Plans.
>> Stay informed about: nytimes article on gold farming 
FAQ
Search
Profile
Private Messages
Log in
