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Originally Posted by Boomstick
The average raise in TC price is about 10.5k a month. Get use to it.
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Not a bad prediction. Not perfect, but fairly close, if, fortunately a bit of an overestimate. At the time, end of January, the price was close to 155k, trending to 160k. Now it is 170k trending to 175k. Call it a 15k increase in 2.5 months.
The thread includes a fairly good and accurate discussion of supply vs. demand on an open market, so I won;t reiterate those points, except to agree. But I'll add somethings I hope people will find interesting.
Now, I know that some people will flame me, just because I have an opinion or because I will posit some things as fact. To them I say : "Bring it."
1) Resellers are essentially market makers, whose economic role is to provide liquidity.
Resellers neither stabilize prices, nor unstabilize them, overall on the large scale. They do so for the individual seller, at a particular moment, because what they actually do is provide liquidity to the market at or near the 'real' price. Yes, they are happy to buy a cheap item cheaply.. Aren't you? But their 'service' to the overall economy is providing a quick outlet for a seller and a supply for a buyer, by stepping in with their own cash, to provide either side of the equation (subject to the limits of the size of the market, or their own capitalization. If there are NO sellers of TC's at any reasonable price, both buyers and resellers go hungry.. likewise on the buy side. However, if you want to sell a TC quickly, the reseller will accommodate you. Likewise if you wish to buy).
2) Resellers do raise the overall price relative to the market, but only modestly. Why? They snap up cards below a certain threshold, and sell them at or slightly above that threshold. This is a lot like any retailer... although it is most comparable to the floor agents on a market or commodities exchange. The spread between the bid and ask price is the trader's margin. That margin ins the incremental price that people pay.
To be effective such agents have to be sensitive to the changes in demand that result in 'actual deman' price changes. This is easily seen when you consider stock prices (yes, those are mostly handled by computers, these days, although the NYSE floor is still stocked with floor traders)
3) In real life, resellers.. or as they are actually known, 'market makers' are a form of speculator. They assume that they can buy and sell inventory, including, and particularly such abstract inventory as TC''s, or equity shares, or commodities, or warrants or options, or ... ) without suffering catastrophic losses (say, due a sharp decrease in demand that causes prices to plummet. Say, if the game got amazingly boring for capped players, and those all retired and sought greener pastures to explore, without passing their characters on to poeple who would buy tc's for gold.... Not gonna happen I think, but you get the idea.
4) Market-making can be exciting. It;s NOT everyone's cup of tea. However, there is a very real thrill to believing that you understand the demand / supply dynamics of something well enough to jump in with your own money, buy something, resell it to someone who is willing, if not happy, to pay that price and thus 'be right'. Of course the market maker can also be wrong, and be stuck with an item that has no intrinsic value to them.
I have done truly truly minor speculation (not on TC's), and while the money I made was trivial, it was a hoot to be right... I also mistyped a price yesterday on a potion I made, and watched as seconds later, before I could correct it, someone bought the thing from me for 1/10th of what I believe to be its 'value'. Ah well.)
Am I defending people who get a kick from trading? No, I am marveling at the depth of experience and richness of an economy in the game. There is lot going on in Nod for a game considering its trivial and repetitive game play.
5) People who talk about buying or selling tc's for 12k or 130k to/from friends / clannies / poor N's etc should feel free to do so, but realize that they are acting outside of the Nod economy. There is not wrong with this of course... it's is analogous in the real world to a private placement / sale. However the price of that sale was influenced by what the market was willing to bear, so it's kind of irrelevant to the discussion.
6) People are going to have bad feelings about anything to do with valuable items or 'moeny' in any real sense. There are great people who have lots of time and no money, and play Nod... but cannot (or will not) afford to shell out material amounts of $US. Other's ca buy and burn tc's like they were dirty paper. For good or ill, that is how it works irl. There are wonderful people who simply cannot afford to be a BMW, too.
7) The prices of tc's increase because the supply and demand curves are shifting. Prices were low, early, because the amount of money in the game was low.. There were few or no capped players, and the average earnings of the highest level players was much lower. Guess what, though, I bet back then, 12k or so was about as hard for a high level (not capped, but high level) player to come up as is the 170k or so for a tc today.
Prices will continue to shift, in response to the supply / demand curve. If the number of high level / capped players increases, and the number of low / mid-level players with some money to spend does not increases proportionally, the price will rise, as the large pool of available gold chases the limited stock. What are the welathy players going to do with their gold? After theyhave bought all the epics or gems the want, or need or can use? THey will give some away, use it to buy rine power... and with the excess (or first, before these purchases)? THey willbuy tc's... because what better thing will they do with it? If Ihave 200k and nothing else that I want to buy, then the only thing that matters to me is that a tc costs less than 200k (all right, I would prefer to pay less, cuz then I have some left over for the next one....)
If the number of players with $US to spend rises very quickly (well, Jeff will do a jig, and then), the prices will drop, since sellers will quickly realize that they have to underbid the low bid to get theirs to sell.
By the way, market makers can indeed stabilize the prices at this point, by buying up all the cheap tc's, and putting them back out at their standard price. However, everyone (except Jeff) is limited.. there is a point where their capitalization cannot absorb the available capacity. At this point prices simply will drop.. and the market makers are stuck with some very 'overpriced' tc's.. that is part of their risk and their thrill. In this manner they are analogous to a buffer solution in chemistry, or the actions of the U.S. Fed, in buying up all the toxic mortgage debt and capitalizing Fannie and Freddie.
OK. Finance dissertation over. Those that stuck w/me, thanks for reading. Those that want to argue. Shrug.
Those that want to yell at me for resurrecting a 2-month dead thread, go ahead.
Finally, as you may imagine I have nothing against Zanthyr.. I have bought an epic from him, and I admire his enterprise and cojones. It's his risks... so it's his profits...and I'll wager he's gotten burned once or twice, along the way, too.
