GE - Give it time...

[Briante]

This concept was posted by a fellow Tip.Iter, but apparently not everyone here understands it... So here goes...

 

 

 

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The Grand Exchange in itself is NOT the reason for any economic decline you may have noticed. Although I for one have seen no price fluctuations that affect me (a woodcutter and a carpender), but I do recognize that certain other markets are faring a bit worse in the light of the GE.

 

 

 

Now, what is causing this economic decline in certain items? Well, when the GE was released, what was the first thing almost EVERYONE did? Went to the Grand Exchange and loaded their 6 slots with old merchandise to clear out their banks and get quick money in a quick fashion.

 

 

 

What happens to prices when 90 or so percent of players start selling things that were previously dormant in their banks? Well obviously they go down.

 

 

 

All those farming seeds that people complain about being super hard to sell now... well obviously, you all had them sitting around in your bank and now you expect to be able to sell them immidiately when nearly every other player is also selling them? Unfortunately there are still the same, if not less, farmers to buy them because they're all selling their fish that they don't need while farming.

 

 

 

Now, for all of you who complain about the 5% range... It's there to protect you. Without that range to slow down price fluctuation all of these rapid sellers with the same amount of buyers would cause prices to completely die overnight.

 

 

 

Give the Grand Exchange time to even out. When everyone's done rapid selling to clean out their banks the buyer-seller ratio will return to normal. Then it may be possible to remove the 5% limit so prices can fluctuate as the buyer-seller ratio changes per item.

 

 

 

At the moment the buyer seller ratio is estimated at a few buyers per thousands of sellers... So yea, give it some time and stop complaining.

 

 

 

Now, if any of you disagree, (which I'm sure isn't the case ) please say so in a mature, intelligent manner.

 

 

 

-Bri

[ayden7794]

Totally agree. The economy was already slipping without the GE so I don't see what the deal is.

[qeltar]

Heh.. I just replied to this on the RSOF and then found this here.

 

 

 

C&P:

 

 

 

 

 

Sorry, but the "give it time" argument entirely misses the point, which is that the GE is fundamentally flawed in ways that ensure it will never work, no matter how much time it is given.

 

 

 

Just one example: for the first few days, nobody could sell raw sharks because the price was too high, so all the sellers offered at the lowest price and nobody would buy. Then yesterday things evened out finally, and now today it's reversed: I can't buy raw sharks at the HIGHEST price because the price has gone back up and nobody wants to sell.

 

 

 

Most item prices vary by more than 5%. The price controls are choking and ruining what could have been a great update.

[Briante]

Also a C&P:

 

 

 

So now there are a more people buying sharks at the highest prices and few sellers. The GE is programmed to increase the market price now. What is 'flawed' about that?

 

 

 

When the GE hype dies down this oscilation effect will stabali*e and the 5% limit will probably be removed. (OR increased.)

[qeltar]

I've done this to death here so I'll just continue with you over on the RSOF. :)

[Sbrideau]

Yeah, that's what was behind Jagex head to put that 5% range. I totaly agree with this thread.

[Sharane]

... Nobody still bought any of my gold bars yet... *sneaks away with a chicken*

[Briante]

Anyone interested should join our conversation on the Runescape Official forums.

 

 

 

We have a good discussion going which includes a forum mod, partially responsible for the intelligent aspect of the discussion.

[qeltar]

Well, nobody replied directly to my long post on the RSOF thread explaining why the 5% limit may have actually made the price drops worse, so I'll repost it here in the chance that someone will find it useful. ~q

 

 

 

--

 

 

 

"Fact is, if the limit was not in place the first day when there were a million sellers and few buyers to satisfy all those sellers the market price would go way down way to quickly. The 5% range forced GE bank sales to stop lowering their price at a certain point. This did lower prices, but it also stopped them from plummeting to the ground."

 

 

 

I know you'll find this hard to believe -- because it's counter-intuitive -- but the price controls have likely *worsened* the price drops. The reason why this happens is that they drag price corrections out over such a long period of time that it allows far more "herd mentality" to become established in the market.

 

 

 

Suppose, for example, that toadflax seeds were 1k each before the GE, and when the GE was established everyone went to it, cleaned a bunch of toadflax seeds out of the bank and decided to sell them. Now, suppose there were no restrictions. Some people would offer at 1k, but then others would offer at 900, then 800, then 700.. the price would continue to drop.

 

 

 

Oh no, a crash! Well, yes and no. You see, people would be able to watch this happen in real time, and as the price dropped, more buyers would become interested in the market, and fewer sellers would feel like joining in. The guy who wanted to clear out 400 toadflax seeds to make 400k at the beginning, well, when he sees the price drop down quickly to say, 500, heÃÆââââ¬Å¡Ã¬Ã¢ââ¬Å¾Ã¢d become less interested. HeÃÆââââ¬Å¡Ã¬Ã¢ââ¬Å¾Ã¢d say ÃÆââââ¬Å¡Ã¬Ãâ¦Ã¢â¬Åoh well, the GE is useful but thatÃÆââââ¬Å¡Ã¬Ã¢ââ¬Å¾Ã¢s too cheap, IÃÆââââ¬Å¡Ã¬Ã¢ââ¬Å¾Ã¢ll just hang onto themÃÆââââ¬Å¡Ã¬ÃâÃ

[aznmidget448]

Well said =D>

[Armadyllo]

I can see a slight benefit in having the GE respond slowly to price changes. Price manipulation seems to attract a fair few complaints, presumably from people who aren't making a profit from it. With the GE updating its prices so slowly, it'll be considerably harder for players to manipulate item prices in the same way because they'll need to make their trends far more significant and long-term before the GE will notice.

 

 

 

1. Of course, Jagex didn't need to discourage price manipulation. I miss their old "we don't get involved in item costs" policy.

 

2. It's a "slight" benefit, and it's only a benefit for players who like that sort of thing.

 

3. Just now, when the design of the GE requires it to correct its prices ASAP to what the players expect, it could do with being a bit more flexible.

[Latinoking]

People here's a notice.

 

 

 

Qeltar is just going to get you back with real convincing evidence!

 

 

 

The guy sounds like he knows what he's talking about.

[Benoit4whc]

if people like qeltar would quit their [bleep]ing about everything, maybe runescape would still be working better. it's all these whiny people who keep making the game go downhill.

[Briante]

Latinoking-

 

 

 

While qeltar is quite intelligent, long posts do not make him the arbiter of all knowledge.

 

 

 

I do agree with him that the 5% limit should be removed, I, however, am defending it's existence in the early release days of the Grand Exchange, because, as I stated in my initial post, it protects price drops from completely declining.

 

 

 

Do not overestimate an argument simply because of a quantity of letters. A compelling amount of Forum posters have agreed with the validity of my argument over qeltar's.

 

 

 

The following from Horoika on the RSOF-

 

 

 

I'd have to agree with Briante. His views are more pronounced.

 

 

 

Qeltar, you're setting everything by example. Almost everything you say is "What if...". It may never happen, and thus those scenarios mean nothing.

 

 

 

With the example of players selling at 900, 800, 700, etc..This is not even a valid example because the G.E doesn't work that way. Look into it right now and tell me that you can set a custom price below the 5%.

 

 

 

Removing the 5% would completely destroy trading and the G.E, thus your examples are true, should that occur.

 

 

 

Briante is correct in saying that the 5% is to stop it from plummeting to negative numbers (lol).

[Briante]

qeltar-

 

 

 

Do not see my argument as a personal discredit of your intelligence.

 

 

 

I have thoroughly enjoyed reading some of your Truthscape articles and identify with your views in the most cases.

 

 

 

I simply defend the Grand Exchange update, and Jagex, because they DO know a thing or two about how to run their own game. I am primarily targetting the extremists who think the update should be repealed. (And I do not believe you fit into that category.)

 

 

 

As I have said, I do agree that the five percent range is too narrow, which I gather is your main point. However, I do defend it's purpose in this initial week or two as the Grand Exchange balances out.

[wild_goat_14]

People here's a notice.

 

 

 

Qeltar is just going to get you back with real convincing evidence!

 

 

 

The guy sounds like he knows what he's talking about.

 

 

 

Adding to that: Come prepared when debating with qeltar. If not there may be a immdeiate rise of "Owned" posts and more importantly "You fail" pics.

 

 

 

You have been warned.

[Dire_Wolf]

This concept was posted by a fellow Tip.Iter, but apparently not everyone here understands it... So here goes...

 

 

 

---------

 

 

 

The Grand Exchange in itself is NOT the reason for any economic decline you may have noticed. Although I for one have seen no price fluctuations that affect me (a woodcutter and a carpender), but I do recognize that certain other markets are faring a bit worse in the light of the GE.

 

 

 

Now, what is causing this economic decline in certain items? Well, when the GE was released, what was the first thing almost EVERYONE did? Went to the Grand Exchange and loaded their 6 slots with old merchandise to clear out their banks and get quick money in a quick fashion.

 

 

 

What happens to prices when 90 or so percent of players start selling things that were previously dormant in their banks? Well obviously they go down.

 

 

 

All those farming seeds that people complain about being super hard to sell now... well obviously, you all had them sitting around in your bank and now you expect to be able to sell them immidiately when nearly every other player is also selling them? Unfortunately there are still the same, if not less, farmers to buy them because they're all selling their fish that they don't need while farming.

 

 

 

Now, for all of you who complain about the 5% range... It's there to protect you. Without that range to slow down price fluctuation all of these rapid sellers with the same amount of buyers would cause prices to completely die overnight.

 

 

 

Give the Grand Exchange time to even out. When everyone's done rapid selling to clean out their banks the buyer-seller ratio will return to normal. Then it may be possible to remove the 5% limit so prices can fluctuate as the buyer-seller ratio changes per item.

 

 

 

At the moment the buyer seller ratio is estimated at a few buyers per thousands of sellers... So yea, give it some time and stop complaining.

 

 

 

Now, if any of you disagree, (which I'm sure isn't the case ) please say so in a mature, intelligent manner.

 

 

 

-Bri

 

 

 

I read only what i disliked by GE, and you are right that its not GE that changes prices. But what i hate, is that it affects me...cause GE dosent allow me to ask for 300K each spined set...they dont allow me to go over price which is 212k now.

 

 

 

I really hate that i cant. Most lvl 85, if they try to make spined set, theyll die. And jagex has said that you can ask whatever price you want...

[Sbrideau]

And it is already starting to clear out, I finally started to sell some things. Though I did put things easy to sell since the beginning (such as Runite ore).

[Briante]

SirHemen-

 

 

 

The Grand Exchange is not designed to tell you what to sell your items for. The Market Price is designed to attempt to keep up with the price that players are selling their items for.

 

 

 

The forums are still open and there's always the "old fashion" way of selling things. As I said in my post, in time the rush of sellers will die down and it will likely be changed so that you may set a price at the Exchange within a wider, or infinite range.

[Dire_Wolf]

SirHemen-

 

 

 

The Grand Exchange is not designed to tell you what to sell your items for. The Market Price is designed to attempt to keep up with the price that players are selling their items for.

 

 

 

The forums are still open and there's always the "old fashion" way of selling things. As I said in my post, in time the rush of sellers will die down and it will likely be changed so that you may set a price at the Exchange within a wider, or infinite range.

 

 

 

I guess so , but it would be nice with GE to use to sell your stuff. Also if i later use old fashion selling, then i am afraid of getting this type chat...

 

 

 

Sirhemen> Selling Spined Set 300K!

 

Player > it\s not 300k, its 200k

 

Sirhemen> Who says so...

 

Player > Grand Exchange

 

 

 

 

 

It might not change old fashion selling, but it affects it in price a bit.

[Briante]

People here's a notice.

 

 

 

Qeltar is just going to get you back with real convincing evidence!

 

 

 

The guy sounds like he knows what he's talking about.

 

 

 

Adding to that: Come prepared when debating with qeltar. If not there may be a immdeiate rise of "Owned" posts and more importantly "You fail" pics.

 

 

 

You have been warned.

 

 

 

As I have said, so far in our little debate on the RSOF, a majority identify with my way of thinking.

 

 

 

So, you may either actually read the discussion objectively, or leave. Either way this is a discussion for intelligent people. This is no place for silly pictures or childish "owned" posts. Immaturity only proves that the poster is not intelligent enough to make an actual contribution to the discussion.

[snowager286]

People here's a notice.

 

 

 

Qeltar is just going to get you back with real convincing evidence!

 

 

 

The guy sounds like he knows what he's talking about.

 

 

 

Adding to that: Come prepared when debating with qeltar. If not there may be a immdeiate rise of "Owned" posts and more importantly "You fail" pics.

 

 

 

You have been warned.

 

 

 

Your exaggerating... Qeltar is smart, true and he does have sharp tongue but he isn't the god of debate.

 

 

 

Furthermore, most people on tip it have an unfair bias towards him because of the general view people have of him being a "debater". (which he may very well deserve)

 

 

 

At any rate, The economy will stabilize what has happened has happened. The juggernaut that is JAGeX's ideas has started moving and cannont be stopped.

[Briante]

 

I guess so , but it would be nice with GE to use to sell your stuff.

 

 

 

 

That's the problem. Nearly all players agree with you there. So they're all going to want to use the GE. So that's why the prices go down. But when all this junk gets sold for cheap these bank cleaners will go back to their routine and there will be a fair amount of sellers and prices will shift back into their original position.

[Dire_Wolf]

 

I guess so , but it would be nice with GE to use to sell your stuff.

 

 

 

 

That's the problem. Nearly all players agree with you there. So they're all going to want to use the GE. So that's why the prices go down. But when all this junk gets sold for cheap these bank cleaners will go back to their routine and there will be a fair amount of sellers and prices will shift back into their original position.

 

 

 

It's really not my main problem. My real problem is that it affects old fashion selling, buyers will base their prices after GE.

 

 

 

But i hope your right that the price goes back to what it was before. If it don\t be prepared to get sued Briante, i can\t sue jagex...theyll bann me :XD:

[quitthegame]

I know you'll find this hard to believe -- because it's counter-intuitive -- but the price controls have likely *worsened* the price drops. The reason why this happens is that they drag price corrections out over such a long period of time that it allows far more "herd mentality" to become established in the market.

 

 

 

Not that I'm conceding the point, but so what? People have been bemoaning inflation in RS for years, now we have a little deflation. The point of the 5% limits is not to make the price drop less, it's to prevent manipulation. I think it's disingenuous to use the word "worsened" instead of 'increased' without providing a reason why greater price drops are, in fact, worse.

 

 

 

The current system distorts everything because it is based on faulty information. Every Joe Runescaper who opens his bank and finds a hundred toadflax seeds, sees the price is 1k and figures itÃÆââââ¬Å¡Ã¬Ã¢ââ¬Å¾Ã¢s easy money. He puts his seeds up, and of course they donÃÆââââ¬Å¡Ã¬Ã¢ââ¬Å¾Ã¢t sell.

 

 

 

Do sealed auctions distort everything? Systems that hide the current prices of goods are actually quite common in the real world. When California deregulated their energy market, they used a system quite similar to the RS GE, where utilities would put up quotes to buy energy on a futures basis and suppliers would put up quotes to sell energy, and then an automated system would match them up just like the GE does. Of course that ended up being a total failure, due to collusion between the suppliers, but all the economists' theories predicted it would work great, and I know you love the theories ;) Anyways, that collusion seems a bit more difficult in RS. Do you think that construction projects in the real world should stop using sealed bids?

 

 

 

Now, though, heÃÆââââ¬Å¡Ã¬Ã¢ââ¬Å¾Ã¢s in the market, he wants to sell those seeds. So do maybe 10,000 other people. So they sit there, day after day, watching as the price goes down, down, down.. 950, 900, 850, 800. Some of these people will eventually decide to stop selling, but others will just get frustrated that they canÃÆââââ¬Å¡Ã¬Ã¢ââ¬Å¾Ã¢t sell and will keep trying and trying. Some of them are people who never would have entered the market had it correctly quickly, so they keep the downward pressure on prices.

 

 

 

What you are missing is that the downwards pressure on prices is diffused by the 6 item limit. I personally have 40 different things in my bank I'd have up for sale if the limit were that high. If prices were floated with very quick updates, like every 5 minutes for example, then it would be like I had all 40 of those things up for sale, since everything would sell so much faster I'd put them up bang bang bang. The combination of the 6 item limit with the 5% limit seems like it might give the market time to adjust without overcorrecting as much as a faster update might bring about. Again, it's not that an overcorrection would make me sad, I'm just kinda pointing this out.

 

 

 

In the meantime, what of those who actually trust the GE prices? They end up ripping themselves off. By definition, anyone who is buying in the GE when the price is above market is paying too much; anyone selling when the price is below market is underselling.

 

 

 

By definition, any transaction in the GE is market price. There may be other markets with different prices, but the GE is just as much of a market as the forums or world 2.

 

 

 

Efficient markets require freedom and current information exchange. As presently implemented, the GE has neither.

 

 

 

False. It's hard to refute your claim when I don't know what you mean by efficient markets. Are those markets that benefit the economy the most, markets that cost the least to run, or markets that maximize both according to some efficiency function of multiple variables? In any case, I disagree. Let me not be misunderstood to imply that the GE is an efficient market. It is almost an efficient market, but what it lacks to make it efficient is not freedom and current information exchange. If it had no permanent price floors, and updated every 5 minutes, and people had an option to make their prices float with the market price changes, then it would be efficient. Probably. Of course, I believe that the GE in that scenario would cause more overcorrection, so if you include "prevents overcorrections' in your definition of efficient market, then maybe the current GE is efficient after all.

 

 

 

Of course, overcorrections in the real world are rampant, on the large scale they cause the over/underproduction business cycle. Marxists constantly denounce this cycle, yet without it, bad businesses would not be weeded out so efficiently. Let that be a lesson to us all, to be careful what we wish for, and if you can't be careful, then make like a Marxist and take care to form too many committees to make your wishes reality.