Pure Essence: What happened?

[qeltar]

The story you tell could just as easily be retold without price limits with the only difference being that the price rises and drops would be much more dramatic and frequent.

 

 

Wrong. You've bought into the myth.

 

 

 

Look at properly functioning stock markets. Prices do not usually go up and down rapidly *unless* there's a reason.

 

 

 

The 5% price ranges are what cause people to fixate on the price being "stuck up" or "stuck down" day after day. They also *dramatically* reduce trade volume, which makes price fluctuations far worse.

[Flobberdude]

You would probably get more money by just selling the raw items. If you make loss by buying the raw items, you also make loss even if you get the raw items yourself (compared to selling them).

 

 

 

I think that xp takes priority over money (in this case), just that the person wants a bit of money on the side.

 

=================

 

Also, the price limits cause:

 

 

 

CONS

 

--

 

1) Bad prices to stay that way

 

2) Good price changes to be stuck in slow-motion

 

 

 

PROS

 

--

 

1) Made investments a lot easier, as per con #2.

 

2) Made the market more reliable, which matters a lot to anybody but merchants, as far as I know. If there's a change occuring, I know about it before it's too bad.

 

 

 

Qeltar, what other cons are there? If those are the only ones, I don't think it's as bad as you make it out to be.

[dynastyfan0]

if it stays at a constent 150 each, it will become a nice money maker while getting your mining up. when that happends, lots of people will start doing it, then there will be over supply, and the prices will go down.

 

i know i might mine it to get 85 mining later this year

[magekillr]

i agree with monte about a new form of merchanting...a new form of merchanting that i spoke about long before any of this happened...immediately when the GE came out i saw it.

 

 

 

i'm glad now...cause it'll actually take timing about knowing when to sell and when to buy.

 

 

 

told you guys it'd top at 170 max (it maxed at like 165) and then plummet...look at it now :shame:

 

 

 

qelter...about your stock market reponses...the GE actually imitates the stock market. you say "rapid", but in reality it's the same concepts. things in runescape of course will occur more rapidly than they do irl..i don't know many who can build a table in a day :lol: .

 

 

 

stocks in the real world will hit huge marks and very low marks...and either middle out at the end of the day, or stay low or high. for the most part, they'll reach that middle ground with a slight increase/decrease....that is until a major blow hits the economy that surges a rapid sell or buy for that particular stock.

 

 

 

the same is occuring in rs...except in "runescape" time, and not real world time....and it's gonna take the same market savviness to become good at it (in a simplified manner so to speak).

[gempoult]

if you look at the skill you see pretty good there won't be any life runes so lot of ppl will get burned :-w

[monte]

The story you tell could just as easily be retold without price limits with the only difference being that the price rises and drops would be much more dramatic and frequent.

 

 

Wrong. You've bought into the myth.

 

 

 

Look at properly functioning stock markets. Prices do not usually go up and down rapidly *unless* there's a reason.

 

 

 

The 5% price ranges are what cause people to fixate on the price being "stuck up" or "stuck down" day after day. They also *dramatically* reduce trade volume, which makes price fluctuations far worse.

 

 

 

While I see your point, I still don't agree that removing price ranges make a difference. So unless I'm missing what you are saying the scenario could just as easily play out like this:

 

 

 

A player looking to sell 10K of p ess throws out 500 at 130 and sees they sell quickly. Seeing a demand, he offers 500 more at 140 and once again they sell fast. He now looks toward 150 and higher.

 

 

 

Other sellers sit back loving the fact prices are rising and wait for the time they too want to jump in. They quickly push the price of p ess up to near 170.

 

 

 

Then, as you mention, prices reach a peak and they start to slide. Now, sellers are under-cutting each other even faster and potentially more dramatically then prices were rising. Seller A sells at 150, Seller B decides to undercut at 140 but Seller C can go as low as 100 because he's not 'restricted' and he needs money fast for his new dragon boots.

 

 

 

The resulting price roller coaster sees the price of p ess go from 130 to 170 and back down to 130 in a matter of a day. How is that better or at the least, less confusing for sellers and buyers alike?

 

 

 

The problem we are facing with p ess right now as I mentioned and other have as well is that noone knows what the price should be yet. The recent changes have made it difficult to predict. RCing is generally considered one of the better remaining money-makers in the game and yet the recent updates have crippled the resources for that skill.

 

 

 

It looks like the price for p ess will settle somewhere between 120 and 170 since that's where it has been trading for the last few weeks. Eventually it will find its price. I just don't see how unrestricted price limits would have made finding that price any easier and I certainly wouldn't buy the argument that it would have gotten there less chaotically.

[Ravenkana]

The story you tell could just as easily be retold without price limits with the only difference being that the price rises and drops would be much more dramatic and frequent.

 

 

Wrong. You've bought into the myth.

 

 

 

Look at properly functioning stock markets. Prices do not usually go up and down rapidly *unless* there's a reason.

 

 

 

The 5% price ranges are what cause people to fixate on the price being "stuck up" or "stuck down" day after day. They also *dramatically* reduce trade volume, which makes price fluctuations far worse.

 

 

 

While I see your point, I still don't agree that removing price ranges make a difference. So unless I'm missing what you are saying the scenario could just as easily play out like this:

 

 

 

A player looking to sell 10K of p ess throws out 500 at 130 and sees they sell quickly. Seeing a demand, he offers 500 more at 140 and once again they sell fast. He now looks toward 150 and higher.

 

 

 

Other sellers sit back loving the fact prices are rising and wait for the time they too want to jump in. They quickly push the price of p ess up to near 170.

 

 

 

Then, as you mention, prices reach a peak and they start to slide. Now, sellers are under-cutting each other even faster and potentially more dramatically then prices were rising. Seller A sells at 150, Seller B decides to undercut at 140 but Seller C can go as low as 100 because he's not 'restricted' and he needs money fast for his new dragon boots.

 

 

 

The resulting price roller coaster sees the price of p ess go from 130 to 170 and back down to 130 in a matter of a day. How is that better or at the least, less confusing for sellers and buyers alike?

 

 

 

The problem we are facing with p ess right now as I mentioned and other have as well is that noone knows what the price should be yet. The recent changes have made it difficult to predict. RCing is generally considered one of the better remaining money-makers in the game and yet the recent updates have crippled the resources for that skill.

 

 

 

It looks like the price for p ess will settle somewhere between 120 and 170 since that's where it has been trading for the last few weeks. Eventually it will find its price. I just don't see how unrestricted price limits would have made finding that price any easier and I certainly wouldn't buy the argument that it would have gotten there less chaotically.

But the increased randomness would make it harder for merchants to jump in and coast the... um... coaster... The price controls were set SO that merchants couldn't take advantage of price trends. In the current situation, the market is VERY predictable in certain areas. Also add in the floors and ceilings and... well... All hail Vladimir Gow- I mean Andrew Gower!

[Andrew_s_2]

I noticed p ess is starting to drop again.

[epeeflecher]

I noticed p ess is starting to drop again.

 

 

 

Yesh.

[CYBERFROST]

I noticed p ess is starting to drop again.

 

 

 

Yeah, a day after I brought 8k for top price. ÃÆââ¬Å¡ÃâìÃÆââ¬Å¡Ãâì

[eyehawk78]

Surely its the lack of supply of essence, due to bots leaving the game after the RWT update?

[Ginger_Warrior]

Surely its the lack of supply of essence, due to bots leaving the game after the RWT update?

 

No you thilly Crewbie... Jagex are on a never-ceasing conspiracy to destroy our RS way of life, honestly! :roll:

[qeltar]

Surely its the lack of supply of essence, due to bots leaving the game after the RWT update?

 

No you thilly Crewbie... Jagex are on a never-ceasing conspiracy to destroy our RS way of life, honestly! :roll:

 

 

 

I guess it's easier to just hand-wave the whole thing away with jokes about conspiracies. The truth, though, is that it is not bots nor conspiracies that is responsible for the problem -- just economic ignorance on the part of Jagex and most RS players.

[alcoolj]

 

The truth, though, is that it is not bots nor conspiracies that is responsible for the problem -- just economic ignorance on the part of Jagex and most RS players.

 

 

 

Economic ignorance by most RS players? A tad harsh, and untrue.

 

 

 

The truth is that most RS players just do not care about whether the price has gone up/down of a certain product. If they need it, and have the gp, and the price suits their need, they will buy.

 

 

 

They realise that the price has risen/fallen, or that they could have bought x amount for a lot cheaper a year ago etc, but they just do not care! It is not as though they have lost real money, and provided they have enough gp to be self sufficient - meh buy that ess at 160gp ea (or whatever it is)

 

 

 

So it is not economic ignorance, it is that RS players (non-merchant ones anyway) play for today, not for how much gp they will make tomorrow.

 

Once the price of a product gets to a point that it becomes uneconomical to buy or the loss is too great to bear, they will not buy it and move on to another skill or get the product themselves.

[qeltar]

 

Economic ignorance by most RS players? A tad harsh, and untrue.

 

 

You're right -- events of the last few weeks indicate that I really should have said "nearly all".

[monte]

 

Economic ignorance by most RS players? A tad harsh, and untrue.

 

 

You're right -- events of the last few weeks indicate that I really should have said "nearly all".

 

 

 

Man, your smugness is just disgusting sometimes.

[alcoolj]

Being ignorant of the RS economy, would imply that you are syaing that almost all players are unaware of what happens, and that is the point I disagree on. I suggest that most players are well aware of how, and why the GE prices change, and they buy materials when prices suit thier needs irrespective of the price of the same item yesterday.

[Ginger_Warrior]

The fact is qeltar, most people who play RuneScape just don't care about the RuneScape economy. If to you that's ignorance, then fine. It's different to real life - whether the economy is doing well in RuneScape doesn't equal the difference between having a house to live under or not like it does in the real world.

 

 

 

Most people who come onto RuneScape do so as a form of escapism from the real world; if paying higher prices means removing themselves from the stresses, strains and complications of real life then to them that's a price they don't mind paying.

 

 

 

Don't hold the fact we have more important things to worry about over how Jagex operates RuneScape's in-game economy against us. Yes, they messed up on certain items. We've established that.

[ashozzy2]

 

Economic ignorance by most RS players? A tad harsh, and untrue.

 

 

You're right -- events of the last few weeks indicate that I really should have said "nearly all".

 

 

 

Smug alert.

 

 

 

Im with duke freedom on this one.

[qeltar]

If people don't care about the economy, that's fine. But when people like myself, who do care about it and also happen to know something about, it try to show what's going on only to have their explanations dismissed without a single thought, that's ignorant.

 

 

 

And sorry, alcoolj, but I do think most RS players have absolutely no clue what is going on in the markets, or why prices are moving around as they are. And Jagex is very happy for it to be that way.

 

 

 

As for smugness -- I've been called worse. Only so much time one can spend banging one's head against a brick wall before it starts to get on one's nerves.

[reaper88888]

Bai goldfarmers = less pure ess.

 

 

 

 

 

And rcers; don't complain that you 'only' make a ~100gp profit per ess now, most skills lose money.

[alcoolj]

And sorry, alcoolj, but I do think most RS players have absolutely no clue what is going on in the markets, or why prices are moving around as they are. And Jagex is very happy for it to be that way.

 

 

 

 

Don't be sorry for having an opinion, we are all entitled to one!

 

 

 

I am completely ignorant of the sharks/barows/3rd age/rares/TT markets (and many more) as I either have no use for them or cannot afford/want them. I would assume that almost all RS players are ignorant of some aspect of the market BUT they are well informed on products they make/buy/sell on a regular basis and the price trends in GE. This does not make them ignorant of the economy, or how it works, only ignorant of aspects of the economy that does not affect them at this point in time.

 

 

 

ThatÃÆââââ¬Å¡Ã¬Ã¢ââ¬Å¾Ã¢s my opinion, and I like it :)

[Duke_Freedom]

i agree with monte about a new form of merchanting

 

 

 

Technically it's not a form of merchanting, but speculating / investing. Either way, it is indeed one of the neater aspects of the GE. Speculating in materials never used to be worthwhile before the GE, because buying and selling huge amounts of materials was impractical and too time-consuming.

 

 

 

Since there seems to be some misconceptions on the effects of the restrictive 10% price range I guess I'll forward my thoughts on that here too... It surely does not cause the market to behave differently than it would have without the limitation. I'm confident that pure essence would have [bleep]ed up just like it did now without the limitation. At its peak it would have then reached similiar heights, probably even higher for a very short amount of time.

 

 

 

However, without the restriction the price increase as well as the fallback would have taken place much faster. The downside of the price limitation is that the GE-price "lacks behind" the 'real' price based on 'real' demand and supply. When a (major) price change takes place, the GE does not accurately reflect 'real' demand and supply, mainly because the Adaptive Pricing System does not update the market price often enough.

 

 

 

Some people might note that this seems desirable as it suggests that the market is more stable as price changes take place more gradually and that the real excesses don't happen.

 

 

 

While that might be true to some extend, it ignores the fact that the restriction makes the market inefficient. Once the hype starts, trading volume is likely to plumment, because demand will exceed supply at the max price of the GE - there's a supply shortage which is not (immediately) corrected by a higher price. I think this situation remains till the peak price is reached, at which demand equals supply. However, at that point, it is likely that a fallback will follow, which will result in supply exceeding demand at the lowest price of the GE - leading to a situation of oversupply which is not (immediately) corrected by a lower price.

 

 

 

In the worst case and depending on how well the Adaptive Pricing System works, the peak price situation may even result in a market failure where near to no trade takes place at all. I suppose the chances of that actually happening to materials (which have huge trading volumes) is nihil though - there will always be some people who will buy or sell at extremely high or low prices.

 

 

 

As I already noted earlier: the price limitation also causes the hype to last longer. Ofcourse that also implies that it takes longer until the market equilibrium is reached.

 

 

 

Anyway, I do think that alcoolj has a point in his posts. Formulated more in economical terms, he basically states that the price elasticity of demand and supply is quite inelastic. While I would strongly disagree with that on the long-term, I do think it has some credibility for the short-term environment that we are talking about here. It implies that the trading volume decline that the restricitive pricing causes is not as dramatic as would be expected otherwise.

[qeltar]

Agree with some of your comments, but...

 

 

 

 

It surely does not cause the market to behave differently than it would have without the limitation. I'm confident that pure essence would have [bleep]ed up just like it did now without the limitation. At its peak it would have then reached similiar heights, probably even higher for a very short amount of time.

 

...

 

While that might be true to some extend, it ignores the fact that the restriction makes the market inefficient. Once the hype starts, trading volume is likely to plumment, because demand will exceed supply at the max price of the GE - there's a supply shortage which is not (immediately) corrected by a higher price. I think this situation remains till the peak price is reached, at which demand equals supply. However, at that point, it is likely that a fallback will follow, which will result in supply exceeding demand at the lowest price of the GE - leading to a situation of oversupply which is not (immediately) corrected by a lower price.

 

 

...I think these two paragraphs contradict each other. The second one is essentially what I am trying to get across; that the price controls substantially curtail volume. I do not see how you can argue that a dysfunctional market with most people standing on the sidelines would not result in greater price swings than one with lots of active participants. It is well known in market theory that volatility is inversely proportional to transaction volume.

[CYBERFROST]

Bai goldfarmers = less pure ess.

 

 

 

 

 

And rcers; don't complain that you 'only' make a ~100gp profit per ess now, most skills lose money.

 

 

 

World 66 - non stop moaning from runners.

 

Before they would make about 8100gp per run. (27 Laws @300ea)

 

Now their getting about 4050gp per run, thats still bloody good money, considering the RCers are basicly just throwing money at them.