Is the Grand Exchange Fueling Deflation?

[giantgerbil1]

Just a quick thing i noticed, prices seem to be dropping on several very common items. Things like whips, potions, and armor.

 

 

 

Before the GE came out, super attacks could be sold consistently for 1k each, not much of a problem. When the update was released with the Grand Exchange, the average shop price (Set by Jagex) was roughly 800gp. So i went and tried to sell 100 super attacks for 800 each, i noticed it was lower than normal, but i knew it would stabilize.

 

Or would it... :?

 

 

 

2 days later, I go back to check on my pots, none have sold, so i take them out, and decide to put them back up for sale at a lower price. The new average price for super attacks is 650! 800gp is even OVER the max price now.

 

 

 

Ok, we know the GE average prices change based on whether the item is selling for higher or lower than the average price, so this drop means that super attacks have been selling for less than average prices.

 

 

 

At the time of release, the GE average for whips was 1.4. At the time i went to resell these pots, they were 1.25

 

 

 

I thought a little about how drastic the change was in both the potions, and the drop in Abyssal Whips... Imagine this scenario...

 

 

 

We know the GE automatically buys the item you want at the lowest price possible, and we know it automatically updates.

 

 

 

Person A wants to buy 1,000 Rings of Dueling, for 2.5k each

 

 

 

Person B, C, D, and E are all selling 200 Dueling rings each, for 2k each.

 

 

 

The GE automatically buys out the stock of Persons B, C, D, and E and saves the buyer quite a bit of money

 

 

 

Even though there may have been several other sellers out there selling for prices at or around average, the GE bought from the lowest sellers.

 

 

 

The GE "sees" that Rings of Dueling sold for lower than average that day, so it LOWERS the average.

 

 

 

A new cycle starts the next day, when someone goes to put something up, they decide to put it up for a little less than "the market average" in hopes of getting a buyer quicker and beating out the competition

 

 

 

GE adjusts prices again, to be lower. The cycle continues

 

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~`

 

 

 

Given, this isn't exactly what's happening, but on a smaller, simplified scale, it's an accurate idea of what's going on.

[tintin113]

I think that this is just a temporary thing - people are dumping all of their stuff into the grand exchange, thus fuelling dpereciation of prices that were going down before ge simply because of what merchants thught would happen to prices.

[transcript80]

I think you have a point, but you have to take in account that at the moment, the GE is FLOODED with junk people drastically want to sell.

 

 

 

Once the bulk has been cleaned out (may take a month or more), prices will head back up. Not to the level of pre-GE, but they'll rise for sure.

[mchainmail]

Once the bulk has been cleaned out (may take a month or more), prices will head back up. Not to the level of pre-GE, but they'll rise for sure.

 

 

 

Why? Because the prices you will now BUY for are equal to the prices people would SELL for. There is no longer a middle-man merchant driving up the prices.

[joker202]

Don't know,

 

 

 

But I do know that I bought torags at a steal price from the GE.

 

 

 

 

 

PLate 400k

 

 

 

Legs 320k

 

 

 

Keep it coming.....

[tryto]

Yes, things seem to be stabilizing now. Yesterday i sold 10k airs for 11ea within 5 seconds. At first, everyone was selling, and the sudden influx has now been mostly sorted out.

[quitthegame]

Your example assumes that there are loads of sell orders in the GE, and that the buyer gets his goods instantly. Yes, in this example, the GE will send the price downwards.

 

 

 

In an example where there are loads of buy orders in the GE, and a seller gets his money instantly, the GE will send the price upwards.

 

 

 

This is supply and demand working as designed.

[alcoolj]

What is happenening is that the players are determining the 'value' of items, rather than merchanters. Supply and demand is more fluid now, and items with an oversupply (sup attack pots, whips) are dropping in price.

 

 

 

There are items that have plateaued at a steady price. Archer helms cannot be bought at the lowest price, nor can black masks. Why? Because the sellers are not willing to put up the items for the lowest price even if it means waiting a few days for the goods to sell. Until this happens with the oversupply of stock, prices will continue to fall.

 

Look at cooked sharks, and monks - 650ea for cooked sharks, and 230ea for cooked monks. Oversupply of both products means the only way to get rid of them is to sell at the lowest price.

 

 

 

The GE was not flooded with junk, never was. People were simply trying to sell product they did not have an immediate use for, and saw many items in their bank that were previously difficult to sell. With GE, the items are very easy to sell at minimal effort. Take clean herbs as an example. I had over 1k kuarms/lants/clands etc of clean/unclean variety. I can't use any of them so was happy to sell them on GE at lowest price. A good cash boost for me, and a herby was happy with lower than usual prices for herbs - we are both happy.

 

 

 

So who is moaning that prices are lower today than 2 weeks ago? Merchanters are, thats who. They no longer control the prices, and are at the mercy of the GE. Merchenters who bought at high prices prior to GE have lost a ton of cash, while normal players are happy to be paying 2k less per prayer pot than previously and skillers are happy to pay 2k less per rannar weed.

[fat_klutz]

I enjoy the fact that prices are going down so much, however, if they go to low then I have a feeling the market will just kinda explode and things won't be good.

 

 

 

I think Yew logs are basically the only thing that are going up on a daily basis. Anybody know if I am right? They were like 380 originally and are now like 390+ or something

[Duke_Freedom]

A (more sophisticated) trading system itself can't be responsible for changing the fundamental (read: theoretical, based on perfect market assumptions) equilibrium prices at all.

 

 

 

However, due to the more efficient trading possibilities provided by a better trading system, the actual market prices will be going more towards their fundamental equilibriums.

 

 

 

That is what is currently happening with various previously hard-to-sell-in-bulk items.

[alcoolj]

I enjoy the fact that prices are going down so much, however, if they go to low then I have a feeling the market will just kinda explode and things won't be good.

 

 

 

I think Yew logs are basically the only thing that are going up on a daily basis. Anybody know if I am right? They were like 380 originally and are now like 390+ or something

 

 

 

A market like RS cannot "explode". With a 5% max shift per day, it will merely self correct any massive error slowly over time.

 

 

 

Yews were 300-330ea not that long ago, and yes they are around the 400ea mark now. Partly due to the decrease in nats price, and partly due to the irritating nature of getting them yourself. Yews are the best way to raise cold hard cash while getting experience at the same time - so it's understandable that the demand for these has risen. Becasue your cash can buy a whole lot more, high alching at a profit is in higher demand, hence higher yew prices.

[fat_klutz]

I sold yews 380 ea before the exchange, so if you were selling 330 ea you were getting ripped off, and I don't mean explode but people like skillers who mine ores and stuff will get so fed up with selling for nothing they will just start to use the ores themselves which will kinda stop the flow of money from the rich people buying the ores and stuff. Or am I wrong?

[wild_goat_14]

Doesn't money have to leave the ecoomy for deflation to occur?

 

 

 

All you are seeing is the skillers not move thier prices, and the buyers buying lower instead of the merchants.

[Smapla]

We are moving away from a money-oriented game, to a game based on skills, FUN, and less repetitious activities such as merchanting, etc.

[TeeBeaun]

We are moving away from a money-oriented game, to a game based on skills, FUN, and less repetitious activities such as merchanting, etc.

 

 

 

Sounds like an awsome game to me!

[wild_goat_14]

We are moving away from a money-oriented game, to a game based on skills, FUN, and less repetitious activities such as merchanting, etc.

 

 

 

Yay!

 

 

 

Your posting reminds me, how long until CW high scores, if ever?

[Atroxide]

I sold yews 380 ea before the exchange, so if you were selling 330 ea you were getting ripped off, and I don't mean explode but people like skillers who mine ores and stuff will get so fed up with selling for nothing they will just start to use the ores themselves which will kinda stop the flow of money from the rich people buying the ores and stuff. Or am I wrong?

 

guthan spears are going up too.

 

I currently have the max put up to buy a guthans spear, been a day and still no offer.

[alcoolj]

I sold yews 380 ea before the exchange, so if you were selling 330 ea you were getting ripped off, and I don't mean explode but people like skillers who mine ores and stuff will get so fed up with selling for nothing they will just start to use the ores themselves which will kinda stop the flow of money from the rich people buying the ores and stuff. Or am I wrong?

 

 

 

Last time I fletched, I bought Yews at 300gp each. I have never sold a yew in my life!

 

 

 

People getting base resources, are selling for a lower price than 2 weeks ago BUT they have more pruchasing power per gp as well. Deflation in RS means that people with cash have more purchasing power, and those who have thier wealth stored in goods are losing money. There are exceptions of course, but the majority of goods that are in high supply are falling.

[Slick_cat]

Yes, part of the whole point of the Grand Exchange is to increase market fluidity.

 

 

 

Before the GE, what you were paying for was the item + the merchant's commission for having the item.

 

 

 

In introducing the GE, fluidity (availability of many items) has gone up - thus generally lowering prices on most objects.

 

 

 

This squeezes: merchants and by extension bot-pimps who hide amongst the merchants. Bot-pimps being those nasty people that run chains of bots.

 

 

 

Better still, lower level players (that Jagex is trying to attract and retain as customers) are able to afford more stuff.

 

 

 

This of course means that the rest of us have to work to earn our coin, instead of merchanting.[/b]

[icecube]

I sold yews 380 ea before the exchange, so if you were selling 330 ea you were getting ripped off, and I don't mean explode but people like skillers who mine ores and stuff will get so fed up with selling for nothing they will just start to use the ores themselves which will kinda stop the flow of money from the rich people buying the ores and stuff. Or am I wrong?

 

guthan spears are going up too.

 

I currently have the max put up to buy a guthans spear, been a day and still no offer.

 

Most people don't sell those sorts of items to the GE.

 

 

 

I've had a lot of money in my GE trying to buy barrows, but never a sale, the same with some other rarer armors.

 

 

 

Of course there are exceptions but I think most people still use forums or in-game (W2) to sell these sorts of items.

[kunasako]

Its finally coming to the point where what you pay for an item is what its worth, and what someone is willing to sacrifice to get that item to you.

 

 

 

Think about this: since forever mass items were practically only available if you "overpayed", and that overpayed amount was considered to be the going price. But merchanters had to get the mass items in un-mass quantities from players that would sell to them but for lower. NOW, everyone has access to these players willing to sell for lower prices.

 

 

 

Bottom-line? The G.E. gets rid of the middle-man and the fee associated with it, so what you pay (or sell?) is what the item truly is worth.

 

 

 

A simpler explanation would just be that people are filling the exchange with all their junk, like its been mentioned already on the thread, and it'll just take time for prices to properly stabilize.

 

 

 

I wouldn't be surprised if its a little bit of both effects.

[casthewiz]

I'm getting fed up with the grand exchange...

 

 

 

I just fished around 2k lobbies and sold them all for 200 ea. Note that this is when they are cooked. As Opposed to the 500-600k i would get before the exchange... And I really don't see how you can justify a stack of lobsters as Useless Junk that people want to clear out of their banks.

 

 

 

I'm not willing to Sell for that low, but I literally have no choice, all the undersellers are driving the market down and I cannot sell my lobsters for the prices I want. More people are conforming to the normal, or what they percieve to be normal, the low price. I can't even sell directly through trade, for all of you who start saying go through trading regularly.

 

I've seen people buying lobsters for 180 ea on World 1.

 

 

 

This is half good, because the prices of potions and bolts I've used for training have gone done. On the other hand, the manufacturable items I make and fish for are going down, resulting in me having less money. And with the way the system is, prices can't stabilize correctly. Why? Sellers sell low to beat the competition. Buyers buy from the GE and get the lowest price available. This means that the undersellers keep driving the prices down.

 

 

 

 

 

Phew, long post.... :P

[Celestrana]

Once the bulk has been cleaned out (may take a month or more), prices will head back up. Not to the level of pre-GE, but they'll rise for sure.

 

 

 

Why? Because the prices you will now BUY for are equal to the prices people would SELL for. There is no longer a middle-man merchant driving up the prices.

 

 

 

Thank god for that! Good bye middle-man!

 

 

 

*walks away, grumbling about stinky merchants making item prices ridiculously high only for their own greedy gain*

 

 

 

Merchants are all middle-men (-women) that constantly drove the price of resources and other items to ridiculous heights to the point where Jagex had to introduce a game system that would put some reins on the chaos. The lower prices is probably Jagex's attempts to controlling the influx of real-world traded gp; lower item prices would have the retroactive effect of decreasing the need for huge amounts of gp.

[icecube]

"Middle-men" still do exist of course, many trades still take place outside of the GE, for more expensive items usually.

 

 

 

But yeah, the GE did help deflation but mainly because of all the supply goods that became instantly visible and easily obtainable. Competition becomes more fierce through the GE.

[sithlord_man]

Well, you could say it is the player because they set it at the lowest price. I try buying at the highest but i always get money back...