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Grand Exchange: Your thoughts?


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#21
ego_scorpion
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I would like to redirect the conversation to the other thing I posted, manipulation of the grand exchange and monopolies.



I feel that given enough rich people (1 billion + wealth) they can take complete control of the great exchange.



Things such as Treasure Trail items, rares, and anything else with scarce or limited supply.
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#22
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It's only possible to have a monopoly on rares (and for rares it's nearly impossible).
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#23
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I strongly disagree. A coordinated effort of many rich people can be enough to monopolize anything and temoprarily offset the price in order to make large profit.
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#24
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Threads like this amuse me.. they are all so reminiscent of the proverbial blind men and an elephant.



The reality is that it is absolutely impossible to predict what impact the GE will have, because the impact depends entirely on how it is implemented. Even small changes in operation will make a huge difference in how, when and even if it is used.



A few specific comments....

The first thread I made about grand exchange turned into a flame war unfortunately. Please, try to keep this thread civilized, nobody cares about your opinion of my 24 burger king hats. What I earn and what I do with it should not concern you in the slightest eh?


When you deliberately mention your Burger King hats in your sig and then rub other people's faces in them -- as you did in the prior thread -- then people respond. You have the power to avoid these situations: stop showing off.

I anticipate same thing happening with armor, weapons, treassure trail items, and just about everything. When the market is flooded the only logical outcome is the collapse of prices.


False. Because what you are forgetting is that economies have self-correcting mechanisms, including that of RuneScape. As prices drop, sellers become less motivated to sell, and buyers become more motivated to buy. More buyers enter the market, more sellers leave, and a new equilibrium is reached. It won't be the same equilibrium (at the same price as before) but it WILL be an equilibrium.



There will be no collapse.

The last stage of the collapse is the collapse of the rare market, the backbone of the economy.


:lol:



Saying that rares are the "backbone of the RS economy" is like saying that 50-foot yachts or gold toilets are the backbone of the real world economy.



It's beyond silly. Rares only matter that much to the people who are obssessed with them. To everyone else, they are a non-issue.

Lets say 10 wealthiest players int his game all get together and dicide to take control of the grand exchange. With coordinate effort, these said 10 people can all begin buying out a particular item, for arguments sake lets say a santa hat, with x-mas around the corner.


This is called cornering a market. It can be done, but it is very difficult to do. And very risky.



If you attempt to corner a market and succeed, you can make a fortune. But if you attempt and you fail, you lose your shirt.



The first thing is that you must have enough liquidity to buy up nearly all of a particular item being sold. I doubt that even 10 wealthy players in the game can do that. If you start buying stuff and can't keep it up, guess what happens? The whole thing unravels and you go broke.



Second, it usually has to be an item with intrinsic worth and demand. Rares have no intrinsic worth -- they are pure luxury goods, showoff items. If the prices go too high, many buyers will just shrug and buy something else. It's not like anyone NEEDS these things.



Third, the main area where RS differs from the real economy is that Jagex has control over it. They are not going to allow the sort of scenario envisioned here to take place. In particular, price manipulation and collusion (which is what is described here) is illegal in the marketplace forums, so I am sure it will be deemed illegal here too. And it would be VERY easy to check for.

Holding 10 santa hats means you hold over 200m in buying power. If you add the value of all the rare items in the game, it is enough to trade for a significant portion of the money currently in game, if not more. Someone with a rare item can buy a LOT of stuff. When people have too much money, a lot of them place it in rare items. I realize not every item can be sold right now, but it still places a lot of power in people who hold rare items, and a lot of value in those items themselves.


What you are saying is that rich people are important, not that rares are.



I own items and cash worth more than 10 santa hats, but I don't have any less ability to do what you said than someone who has the rares.

Tell me what a necessity is in Runescape? After you buy the basics (which none really cost over 20m) any money you have left is extra. In real life, people start spending on bigger houses, cars, huge parties, etc. In RS, people spend on rares.


Nothing's a "necessity" but some items are clearly more important than others. Rares have absolutely no function in the game.

Since there are thousands of people saving for rares, you'll be seeing higher prices on EVERYTHING.


Doesn't really follow. Most people who are saving for rares will continue to save for them, and the prices will go up or down depending on whether more buyers or sellers come into the market. My inclination is to believe that prices on most goods will initially go down, not up.
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#25
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Almost every mmorpg has some form of the grand exchange and their economies are not "collapsing" so I don't know why some people are so paranoid about runescape.

#26
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Almost every mmorpg has some form of the grand exchange and their economies are not "collapsing" so I don't know why some people are so paranoid about runescape.




Because every game's economy is different, in ours, it's quite possible that this will actually happen.
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#27
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Threads like this amuse me.. they are all so reminiscent of the proverbial blind men and an elephant.



The reality is that it is absolutely impossible to predict what impact the GE will have, because the impact depends entirely on how it is implemented. Even small changes in operation will make a huge difference in how, when and even if it is used.




Responces like this amuse me as well, an attempt to sound important. It was already established that you have a tendancy to lie and make empty insults, please stay out of my future posts.



A few specific comments....





When you deliberately mention your Burger King hats in your sig and then rub other people's faces in them -- as you did in the prior thread -- then people respond. You have the power to avoid these situations: stop showing off.


I show off my achievement, others show off their 99's or whatever else, its my achievement. Just because you cant stop drooling doesnt mean you have to start making up lies and throw insults, grow up.





Rest of your repetative nonsence doesnt deserve a quote, so just read and learn.



Real life and runescape can not be compared. Rares ARE the backbone of the economy and if you knew anything about anything you would know that. You disagree? thats your right, but you can disagree in a civil manner without making a fool of yourself.



You are aruging about something you know nothing about and talking about rares when you dont have any. My theory is my theory, you do whatever you want in preparation for the great exchange, this thread was intended for intelligent people to discuss what they plan to do in anticipation.
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#28
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I strongly disagree. A coordinated effort of many rich people can be enough to monopolize anything and temoprarily offset the price in order to make large profit.




anything you say? Not a chance! Besides, the situation you described isn't even a monopoly.



Take nature runes, for example. There is no way you can ever have a monopoly over the nature markets. If a bunch of freak decide to buy off all the nature runes off of everyone, they will not gain a monopoly. Why? because a monopoly is when there is only ONE seller in a market and in this situation, there is nothing that stops either me or thousands of other people to make and sell nature runes.



Basically, since runescape is built in a way in which the barriers to entry into all the markets (except rares) are accessible by anyone, you can never have only ONE person with the selling power since tons of other people can easily compete with his price. Notice also that, in real life, our resources will run out, therefore it is possible for one person to get all of that resource. The resources in runescape are scarce* however they are infinitely replenishing meaning that, theoretically, there will never be only one buyer because nothing stops a second person from getting the good themself.



The only exception, and thus the only good that can be monopolized, are rare items but to do that, ONE person must be in control of ALL the partyhats/masks/whatevers in the game. Not only would that be completely unreasonable and unrealistic with the current price but as word spreads, people will be more reluctant to give up their discontinued items thus making the price even higher.



What you're describing anyways isn't even a monopoly but a cartel, which is a mutual agreement between parties to keep the prices high (and can only be attempted in runescape on discontinued items for reasons I have explained above). Considering the insane amount of money needed to make even a slight difference and the ongoing competition from other people, the amount of money needed to make a noticeable effect is immense.



So no, you're wrong. You cannot have a monopoly or any form of cartel over any of the goods in runescape except discontinued items.



*: scarce goods in the economic context are the opposite of free goods and thereby are defined by having a price as opposed to free goods that satisfy everyone's given needs at every given time and every given place. Common Misconception: rune essence, or any good that can be created infinite times, is in fact scarce because it doesn't satisfy everyone's needs at every given time. This is why rune essence, along with all other such goods, has a price.
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#29
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Real life and runescape can not be compared.


They can, and they are. They aren't the same but there are many similarities, especially with respect to the economy.

Rares ARE the backbone of the economy and if you knew anything about anything you would know that. You disagree? thats your right, but you can disagree in a civil manner without making a fool of yourself.


I believe I already did that. You are the one who is frothing at the mouth here, not me.



If you feel that rares are the "backbone of the economy" then try to make a convincing argument to that effect.

You are aruging about something you know nothing about and talking about rares when you dont have any.


Once again, you don't know what I do or do not have or what I can or cannot afford, and it has no relevance to the discussion either way. (Do I need to own a baseball team to discuss what I think my favorite team should do? Etc.)



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#30
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People way overestimate the effect of the grand exchange.



Ego is a merchant who apparently sold his rares or is going to do so and now wants rares to drop as a result of the grand exchange, while there is no reason why they should drop due to the exchange. The arguements he comes up with are extremely contradictionary as well. He argues that people will be selling of their banks to raise money and that merchants will sell rares to buy the cheap materials on the market, however, he completely forgets all the money raised from the bank sales by "normal players" is quite likely to be going INTO rares - thus rather an argument why rares are going to rise.



Again, I don't think the effect of the grand exchange will reach all that far anyway. IF there will be any effect at all, it will mostly be based on nonsense speculation that the update will have an effect. Wishful thinking.



It won't make price manipulating any easier at all either. Individuals aren't able to influence prices by just buying one specific item, the markets are far too large for that. The only reason why price manipulating worked in the past is because the people involved were spreading false rumours and lies (which is against the rules) to create a market hype surrounding one rare. Buying up 50 - 100 phats of one colour alone has no effect at all.

#31
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Responces like this amuse me as well, an attempt to sound important. It was already established that you have a tendancy to lie and make empty insults, please stay out of my future posts. To be honest you make just as much empty insults as he does. Infact he makes less.





I show off my achievement, others show off their 99's or whatever else, its my achievement. Just because you cant stop drooling doesnt mean you have to start making up lies and throw insults, grow up.

- Yes, you are entitled to show off your achievements, but you use them as an argument to make your point clear. Wich still isn't clear.





Real life and runescape can not be compared. yes it can, Runescapes economy can be compared to Runescape's one, but it should be taken with a grain of salt.



You are aruging about something you know nothing about and talking about rares when you dont have any. My theory is my theory, you do whatever you want in preparation for the great exchange, this thread was intended for intelligent people to discuss what they plan to do in anticipation.

If you think he isnt an intelligent person, then you wouldn't reconize one from miles away. Just because he undermines your facts, doesnt make him less intelligent.



One last thing, please make your point clear. I've read numberous posts of you and Im quite confused. And please be reasonable, I just want to know your point. Then Ill be gone with the wind


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#32
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If anyone is interested in reading some real-world history, a classic example of an attempt to corner a market occurred when the Hunt Brothers attempted to corner silver in the late 1970s.



It sounds a lot easier to do than it is.



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#33
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Rest of your repetative nonsence doesnt deserve a quote, so just read and learn.




Think of a better excuse not to respond to his quotes. They are valid and if you think they are not then prove them wrong instead of doing such a blatantly obvious evasive action. I really don't appreciate this sort of behavior in a debate.
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#34
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I want to add that I agree with qeltar that the exact effect of the Grand Exchange will still completely depend on the EXACT implementation of the Grand Exchange, as I have been pointing out in most posts I made on it already.



For example if the Grand Exchange has some sort of transaction fee like 1% of the value, many people will already evade it to sell their expensive rares (1% on a 500 mil item is a whooping 5 mil....). Not to imagine when transaction fees are even higher.

#35
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[quote name="qeltar"]If anyone is interested in reading some real-world history, a classic example of an attempt to corner a market occurred when the Hunt Brothers attempted to corner silver in the late 1970s.



It sounds a lot easier to do than it is.



~q[/quote]



That's a perfect example of a speculative bubble bursting. Some guys wager everything they have on a good, they assume the good can only increase in value. After a while, as people find close substitutes for the good, it all falls apart and the guys lose everything.



In my economics class we've discussed a similar situation, but it was with the government of an entire country that bought huge buffer stocks of tin, taking out loans using the capital of the tin. Since nobody could buy tin, people found ways not to use tin and then eventually didn't care about tin anymore making the price fall, making all of that tin worth a lot less. It took the entire country 10 years to recover from the loss :XD:



[quote name="Duke_Freedom"]I want to add that I agree with qeltar that the exact effect of the Grand Exchange will still completely depend on the EXACT implementation of the Grand Exchange, as I have been pointing out in most posts I made on it already.



For example if the Grand Exchange has some sort of transaction fee like 1% of the value, many people will already evade it to sell their expensive rares (1% on a 500 mil item is a whooping 5 mil....). Not to imagine when transaction fees are even higher.[/quote]



Agreed and I'd like to add there are other limits as well on the supply side that could reduce this "flood" of supplier. For example, quotas (maximum amount of stuff that can be sold), time limits (must wait 24 hours before next deposit etc....). Not that fees are a bad example, they're just a scary one.[/quote]



Something that I'm particularly curious about is how the structure of GE will affect or even determine the demand side. For example, if there is a method for buyers to quickly find the goods they need (note: this can be accomplished by players too), then that will create more incentive for buyers to use the GE. We already know that this GE is aimed at facilitating the selling of items and it's possible that the seller has the advantage, but to what extent will the buyer be affected? Automatically I can tell that a place where he can buy the good IMMEDIATELY creates more incentive but beyond that it will all depend on the structure of the GE.
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#36
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I think prices will definatly go crazy!!! all over the place!!!!

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#37
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Solidus_77, im not going to quote your long post ill just answer you this.



It is very much possible to have a monopoly. Obviously, you cant have monopoly on air runes,, or nature runes, just not gonna happen, however... consider the rate at which some items are introduced to hte game.



Treassure trail items and rare drops from monsters can infact be monopolized to an extent and their prices can in fact be manipulated.



When the exchange comes out ill actualy do it to prove it :)
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#38
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Treassure trail items and rare drops from monsters can infact be monopolized to an extent and their prices can in fact be manipulated.


There's virtually nothing in the game that is important enough or in short enough supply that it can be monopolized to any meaningful extent. And anyone who tries to do so will be taking very large risks.



Think about all the people who lose money by sinking millions into exploits that Jagex later closes. Remember all the people buying maple longs to sell to stores that one day changed?



The price elasticity of demand of most things in Runescape is relatively high. If you or someone else tries to buy up all of something like treasure trail items, you will very soon find yourself sitting on a pile of items nobody wants, and you will lose money to get rid of them.
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#39
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Solidus_77, im not going to quote your long post ill just answer you this.



It is very much possible to have a monopoly. Obviously, you cant have monopoly on air runes,, or nature runes, just not gonna happen, however... consider the rate at which some items are introduced to hte game.



Treassure trail items and rare drops from monsters can infact be monopolized to an extent and their prices can in fact be manipulated.



When the exchange comes out ill actualy do it to prove it :)


Well goodluck with that. You will need it, but what if you will lose most of your cash? Ofcourse there is some chance of you getting huge amounts of cash, but also there is the chance of going bankrupt.



If you are going to try and prove it I suggest not selling all of your rares. So you wont lose it all if it goes wrong.
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#40
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Ok, to answer the last bit of replys.



There is no point that im trying to make, simply guessing at what will happen.



The implimintation bit, I should clarify, I am assuming that the imlimintation will be that very much similiar to world of warcraft and vanguard, ill explain



You put up an item (quanitity). You set price at which people can start bidding and a buyout price. People can either bid up or simply buy out for the price you set.



Also, my guess is everything will be divided into categories.



Furthermore, the argument in regards to rares being the backbones of the economy, somebody already asnwered that in detail and did a good job at it, if you bother to read at all then you would know.



Lastly, duke, please stop being high and mighty with manipulation, cheating, rules. Beating a dead horse while being banned for the very same thing... come on, let your grudge go, its been 3 years since we last talked.



Also, I did not sell my rares, nor do I intend to, I am 100% self sufficient and will be fine even if I never buy or sell anything again. I am aruging in general over the impact the implimintation of the great exchange (as I described it) will have on the game, for example...



1000's of people selling raw materials. Instead of 1000 people just in W2 suddenly everyone puts up their items for sale. Now, an intelligent person will first look up prices to see how much the item he is selling for is going for, to make sure he chooses the correct price, instead of just randomly putting things up for sale.



Now, when that said person sees 10000 people all selling same thing what do you think, is he gonna put it up for higher price than they are selling for or cheaper? Now imagine that on a very large scale, all those people undercutting each other, well, thatss what I am describing.



That can in turn cause a chain reaction, or may not, just my argument, doesnt even have anything to do with merchanting.



Duke, when you say your merchants what do you mean, I was just pointing out an example of what someone can do, like it has been done in the past.
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