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10-28-2010 @ 2:24PM
I would just like to point out a complete understanding of the Prisoner's Dilemma game would allow one to realize it is disadvantageous to be a "third derivative of the position function." There is opportunity for collusion in WoW. I suppose the resulting game would be a Stag Hunt type scenario, or defection. Would be interesting to figure out the equilibrium and toy with some economies.Alas, I definitely fall into the "make stuff for friends for free, tips for strangers" category so I am really out of my league here. Every time I read one of these articles, I consider it more strongly each time.
10-28-2010 @ 3:20PM
Too many big words.......brain hurt.....
10-28-2010 @ 8:00PM
This would correctly be modeled in game theory as an n-firm Cournot competition game. Profit from the model for a given player i is (a - qi - q~i)((a-c)/(n+1)) - c((a-c)/(n+1)), where a is a fixed demand parameter, c is marginal cost, n is the number of firms, assuming symmetric costs and demand. You can see that profit goes to zero as n goes to infinity (keeping in mind that cost includes opportunity cost).That's what Basil misses in his analysis. The magician metaphor is not a good description of why some auctioneers don't like gold guides widely available. It's rather that auctioneers know (even just intuitively) that as the number of players on the AH increases (n in the model above), their profits go down. The best example of this is when mmo-champion.com posted their gold addons guide, profit in the industries mentioned in the guide decreased by approximately 30-50%.Basil writes, "More to the point, the more auctioneers there are, the more fun we all have." That is most certainly not the opinion of everyone in the market. And finally, it is not that Basil is providing secrets, but rather he is just popularizing already well-documented concepts. He's not adding anything new, but just voicing it on a larger audience website. Nonetheless, popularization such as this affects the profit of AH players, and so it should be taken as unexpected that AH players might not like this sort of column.
10-28-2010 @ 8:48PM
wooo Roboticus you made my evening, thank you. However, in simple economic terms, it's a purely competitive market (a rare occurrence in the real world!) and thus, Average Total Cost=Price. Over the long-run, the cost of the barriers to entry (leveling profs) are negligible.
10-28-2010 @ 9:29PM
You're right that if it truly was competitive, new entrants wouldn't matter to an individual's profit. However, I think that analyzing the number of players on the AH suggests it is most definitely not competitive. The major thing lacking is having "unlimited number of sellers." Take the glyph industry, which is probably the closest to competitive of the sectors. Export the data, sort by poster name, and do a pivot table to count the unique sellers. There are 18 on my server, most of which are not big players. Every other market has fewer posters. Using the Cournot formula above, adding a 19th glyph maker of average productivity (say he just read Basil's post and got super excited by free money!) would decrease the average glypher's profit by 5.2%. In other words, the number of sellers on a server is small enough that p =/= ATC, and so Basil's posts do decrease profit of the Auctioneers.
10-28-2010 @ 9:40PM
Yes...you are quite right. Was that data taken into account over a period of time? The fact you only have 18 (or 19) sellers at that point in time is not indicative of the total number of players. In THEORY anyone can post an item, which we definitely agree on. I just feel like 18 is a really low number.But we agree, I know, and I am just jammering on. Game theory makes me nerd out.
10-29-2010 @ 9:37AM
Cry me a river, Roboticus. There's a demand for the popularization of this information, and if it wasn't me writing it, someone else would. In fact, many others do. Some with as many readers as I have. I reject your criticism that I'm not contributing anything- I contribute no less than any other non-coder in the community. Also, every time I introduce a bunch of new people to the community, there's a chance that one of them will be another addon developer who can add all kinds of tools to the auction house addons category. As for whether the people who are facing more competition like this column or not? They don't have to read it. I certainly don't care.
10-29-2010 @ 10:51AM
(Getting this where I meant for it to be posted)Basil, you have written a lot of informative articles, from which many (including myself) have gleaned helpful tidbits of information. I thank you for your contributions in that regard. That said...The beauty of the Internet is the ability for all of us to post whatever we want, whenever and wherever (within reason). But while embracing that freedom, to imply that there is no correlation between articles published (both here and elsewhere) about certain AH markets and increased competition in those same markets is folly. After that, it is Economics 101: the inevitable result of increasing supply against an unchanged demand pattern is falling prices, and thus, falling profits. Do I have reams of data gleaned from Auctioneer in spreadsheets for analysis? No. But the anecdotal evidence, seen in various forums scattered across the web, and my personal observations (on more than one server, on more than one battlegroup) are sufficient."The real fun comes from talking to other players about this particular facet of the endgame -- comparing notes and strategies, telling stories and having rivalries."Places for that already exist - you linked to them directly. If this nebulous "demand for popularization" were as strong as you make it appear, JMTC's forums would be overflowing with users.And so it goes... the long-term players will ride each successive wave of wild-eyed newcomers who saw what appeared to be a can't-miss gold-making operation, and drive them out once they realize they are in over their heads. Sure there will be one, on occasion, that sticks around for while - but for the most part, the "new competition" simply serves as a major source of irritation and temporarily-stunted profits, with no positive impact on the market (from the seller perspective).
10-29-2010 @ 2:53PM
I think the analysis of profit vs # sellers that have been mentioned in these comments is based solely on assumptions of rational actors all motivated by the same factors. I think that those assumptions fail in at least some extent.For instance, an actor for whom opportunity cost is nonexistent (or equivalently, not considered) will have a greater effect upon prices than several who do not.Similarly, a single actor who does not consider profit a motive can drive prices to or below opportunity costs. This includes both attempting to drive other actors out of the market as well as people simply desiring to control the market.I'm not a trained economist, though, so that's as far as I'm willing to take these thoughts. Maybe you folks HAVE considered them, and I just missed the signs.
10-29-2010 @ 4:50PM
Basil, I'm a little surprised you resorted to "Cry me a river" as a retort, especially when I am not at all bothered by this sort of post (quit the AH a looong time ago after additional gold became worthless). Note that I am only arguing that AHers do have a rational reason to be against posts such as yours. Regarding claims of originality, there are ways to contribute without coding, such as comments on emerging markets, patch note changes, or a wide variety of other types. Perhaps you do mention things not already listed in detail on JMTC forums, but nonetheless, the notable thing about this post is not the ideas, it's the size of the readership.So please, no need to go the "QQ moar" approach to respond to me. I just find it a bit strange that the reasons you list for being against popularizing AH strategies don't include the most obvious one, that of basic self interest.
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