Gaian Economics Essay

[engineer-of-doom]

Fukiomoi

You’re essay explains a lot. What popped into my mind is that the marketplace can be compared to a convenience store. Some items will always be in stock, some items may or may not be there, and every once in awhile you’ll find a deal. But mainly things cost more because it is convenient.

That is quite an apt comparison!  

[wiki bean]

engineer-of-doom

Absolutely correct! Interestingly enough it looks as if right now we have a period of inflation despite the tightening of the gold given out. I think this is because other activities like posting and polling are not as interesting because of the lack of reward for doing so. However, as people realize that they don't have as much gold coming in, they will clean house and sell more of their inventory. So in the long run I'm expecting prices to come down.

However, I think it is prudent to wait and watch for a while to see before rushing into strange marketplace behavior.

It's going to take a very long time for prices to go down.

And after hanging in the site feedback, I'm under the impression that the inflation has been caused for a slightly different reason. With the depleted amount of gold being circulated, people are most likely inflating their prices so that won't have to work as much. Why work when other people can do it for you?  

[Chocolate-y Goodness]

I applaud you on a very well written essay, gave me a few insights into the workings of the marketplace. I only started this character 4 days ago, with 10000 gold, I love the market place.

Thanks for the invite biggrin  

[engineer-of-doom]

wiki bean

engineer-of-doom

Absolutely correct! Interestingly enough it looks as if right now we have a period of inflation despite the tightening of the gold given out. I think this is because other activities like posting and polling are not as interesting because of the lack of reward for doing so. However, as people realize that they don't have as much gold coming in, they will clean house and sell more of their inventory. So in the long run I'm expecting prices to come down.

However, I think it is prudent to wait and watch for a while to see before rushing into strange marketplace behavior.

It's going to take a very long time for prices to go down.

And after hanging in the site feedback, I'm under the impression that the inflation has been caused for a slightly different reason. With the depleted amount of gold being circulated, people are most likely inflating their prices so that won't have to work as much. Why work when other people can do it for you?

Well, that's probably what they are trying. But in the long run, it won't work. And let me distinguish between rare items and store items. Rares may never actually go down in value. Store items though, are frequently inflated for the convenience factor. If it's easy to get gold you don't mind forking over an extra 10% just to avoid looking through the stores for the item. If you have less coming in, well, suddenly you need that item to be priced closer to the store price or you will spend the time rather than the gold to get it.  

[kyosuke01]

very interesting and compelling essay. its well put together and answers many questions. great topic. i hope to hear more. and thank you for the invite. i am greatful for the invite since it sure was a good idea for me to join.  

[Gameroo]

Yes, this was an interesting read. Yo've spent alot of time studying this, haven't you? Very cool stuff. I do remember when the credits were first introduced, and how expensive they were originally. In fact, I have a PM saved with an "outrageous" sale I had made.

For someone like me, the MP can be a bit tricky to understand. I haven't spent enough time figuring out the basic prices of certain items, there have been times that I've seen something being sold, wondering, "is this a bargain?", and by the time I click on it to see the price, it's already gone. This is interesting stuff, I wish I could spend more time figuring it out.  

[stukasa-chan]

Thank you, that was the most interesting thing I read all day! 3nodding

The Gaian economy is definitely an interesting and complex place, probably more complex than we can understand. One thing that struck me is that there is also a hierarchy of sellers and re-sellers within the market. I try to buy my items at the lowest price possible, then I re-sell them at a price low enough for other re-sellers to buy. Those re-sellers then turn around and sell the item at an even higher price! Sometimes I wonder how many times the same item is bought and sold before it finally finds a permanent home! rofl

Anyway, great essay! ^_^b  

[Vedol]

great essay thanks for the help  

[( Joker_O_Hearts )]

Bravo! very well written! mrgreen  

[V. Wolfe]

The convenience aspect of buying on the market certainly explains why something can have a (for example) 10% mark-up.

But I've never understood why tokens go above 1 gold each. Buying from the casino is actually easier than buying on the market because you can buy the exact amount you want in one transaction. Yet you rarely tokens for less than 1:1 in the marketplace.  

[ShyGuy2]

Your essay seems right on. Personally, I think the marketplace is the best thing that happened to gaia (now, if they were to add Texas Hold'em to the casino games, then there might be a little competition XD). For those who are smart enough to see it, the marketplace is a way to make some quick and easy gold that doesn't involve the mindless clicking and typing of "bumps" in the forums. The game of buying and selling actually causes you to think, and it can be quite challenging at times (especially if your browser takes more than a second to load a page).

As for the inflation problem, I can see no discernable end to it outside of moderator intervention. As long as there are little to none of a certain item on the marketplace, people will charge whatever they want for it. Provded that it is not sold in stores, nobody offers it for a lower price, and there are at least a few people on gaia that will pay ANYTHING to get that item, you can set the price as outrageously high as you like. In all of my time spent on gaia, I have not once seen the prices on the "impossible" items like halos, angelic sashes, devil tails, minis, etc. ever go down. I've only seen it go up. Therefore, I can only assume that it will continue to do the same until some outside force causes a change.

A good example of what I mean by "moderator intervention" is the G-pin. When it first came out, it was part of an event, the first gaia anniversary ball. Everyone could get one just for posting in the ballroom a certain amount of times. Since then and shortly after they were essentially available to all, they went for reasonable prices. As time went on however, people were less and less willing to part with them, and as a result, the supply went down and demand went up, and thus the prices began to increase, and they kept increasing up until a certain point. That point was the second gaia anniversary ball, another event put on by the moderators. During this event, the G-pin was given out essentially for free once again, and when they were available to anyone, why would anyone want to pay high prices for them? The result was a sharp decline in the cost of G-pins, that brought them close to their original price. Since then however, the same trend started all over again. After the event, as more people with G-pins decided to keep them, their price started showing a steady increase, and that increase has continued to this day.

So, it is my theory that unless the moderators decide to start throwing out original halos for free, the prices on items such as these will never go down.  

[spencetrix]

Every donation Item, will go up to a Decent price. Like the Gwee's and Angelic Mic. are about 10k, If you Can wait long enough the price will go up. Every item start's this way.

neutral Spence.  

[Minomi13]

eek wow, i could never wright something like that, i applaud u.  

[V. Wolfe]

I've been holding onto some Elegant Veils recently, and I noticed they took a steep price dive (about 2-3K or about 15%) when the new donation items came out.

Coincidence? Or possibly due to people dumping older donation items in an effort to buy up the new ones.

I've also noticed that new donation items start around 12-13K (popularity having some effect on price, obviously), then dive a bit after a few days. Is suspect there is some prestige to being the "new kid on the block" with the donation toy. I noticed this most dramatically with the Gwees (personally, I love my Gwee as she's so cute, and don't care if she costs 1K or 100K. heart )  

[Espyr]

wiki bean

Indeed, I agree with everyone! You did a great job. But I believe Sargun Peaceheart is right too. Overpricing is seen very often in the marketplace.

A tiny bit more than "very often", really.. <_<

That's about all you ever see, if only half of all you ever see.

And on what ShyGuy2 said:

Personally, I like inflation. It makes the expensive items I DO have worth more, and it makes the ones I DON'T have worth more.
The first one means I'm just a bit more rich, and I have the satisfaction of having some rare, nice items.
The second means that when I DO get those items I don't have but want, I have the satisfaction of saying I worked hard-- and it paid off.

As for going down.. they do sometimes. The ninja bands just dropped about 50k over the last month or so. They inflate, they deflate, for various reasons..
And I believe the admins have stated at one point or another that they'll never intervene in matters of inflation or deflation unless there's a glitch somewhere in it.

/ramble