Auction House fees: is there any point?

[QuiJon]

On 1/28/2021 at 6:30 AM, Coyote said:

Okay, to give a serious answer.... a lot of IOs are transferred all the time. Each time they do, they drain some INF into nothingness.
I have seen prices as being pretty stable. LotGs have been at a stable level for a long time, as have Positron's and a few others I use as benchmarks.

I feel that we would be seeing a lot of inflation without the inf sink of the fees. Even if it doesn't seem like much, a 10% drain that would be released into the economy would probably result in prices increasing by that much in a time period based on how fast IOs are churning... definitely faster than yearly. Considering how fast IOs sell at normal prices, I wouldn't be surprised if we'd get a 10% monthly inflation.

I dont see this as true at all. Taking your example a LOTG recharge runs normally around 4-6million depending on how quickly you want it. And as you have said even paying (essntially lossing) a 10 percent fee on the sale of that item, those prices are steady in that relm. This fee doesnt effect the buyer at all, they are paying a set price no matter what. But as i said that cost can swing within a set range based on what people post them at and what people will stand to pay. So every seller of a LOTG already assumes if they post it for 4 million they are going to lose 400k of that to fees and have accepted that. If that fee was taken away it would stand to reason that perhaps the costs would go down 400k because the seller is still getting what they consider an acceptable return on the purchase now that they dont have to pay the fees. It also stands to reason that if the fees were increased say to 25 percent, that the selling prices would go up 400-500k so that the sellers again would be remaining in their comfort zone for profit off their sell. 

 

So frankly i agree, this system takes little out of the market. and likely  would not have a substantial impact on anything if it was removed. 

[Grouchybeast]

12 hours ago, QuiJon said:

I dont see this as true at all. Taking your example a LOTG recharge runs normally around 4-6million depending on how quickly you want it. And as you have said even paying (essntially lossing) a 10 percent fee on the sale of that item, those prices are steady in that relm. This fee doesnt effect the buyer at all, they are paying a set price no matter what. But as i said that cost can swing within a set range based on what people post them at and what people will stand to pay. So every seller of a LOTG already assumes if they post it for 4 million they are going to lose 400k of that to fees and have accepted that. If that fee was taken away it would stand to reason that perhaps the costs would go down 400k because the seller is still getting what they consider an acceptable return on the purchase now that they dont have to pay the fees. It also stands to reason that if the fees were increased say to 25 percent, that the selling prices would go up 400-500k so that the sellers again would be remaining in their comfort zone for profit off their sell. 

 

So frankly i agree, this system takes little out of the market. and likely  would not have a substantial impact on anything if it was removed. 

At the moment, someone who wants to list a LotG needs to take the listing fee into consideration when they decide what listing price to choose.  List for just under 4 million and very probably sell for 4-6 million within a day?  List for just under 6 million and hopefully sell for 6+ million in a longer timeframe, but risk losing the listing fee if the IO doesn't sell?  (Numbers are for illustration purposes only.  Do not list based on the contents of this post.)  Every time a seller cancels their listing, they lose 5%, which is a strong incentive not to cancel listings too many times, which is a strong incentive to list for prices that will sell sooner or later, depending on seller patience.

 

Listing fees stop sellers listing-creeping to find the highest current bid. or listing high and slowly dropping the sell price.  It's an important contributor to the market dynamics that make it possible to bid low and wait to avoid the impatience tax.

Edited January 30, 2021 by Grouchybeast

[Coyote]

2 hours ago, SwitchFade said:

*twitch twitch*

 

🤪🤪🤪🤐🤐🤐🤯🤯🤯🤤🤤🤤💩

 

Guys, be sure to keep this thread going for a while. I want to see how long he lasts....

[Yomo Kimyata]

21 minutes ago, Coyote said:

 

Guys, be sure to keep this thread going for a while. I want to see how long he lasts....

I've got 2:30PM EST Saturday January 30 in the pool.

[SwitchFade]

3 hours ago, QuiJon said:

I dont see this as true at all. Taking your example a LOTG recharge runs normally around 4-6million depending on how quickly you want it. And as you have said even paying (essntially lossing) a 10 percent fee on the sale of that item, those prices are steady in that relm. This fee doesnt effect the buyer at all, they are paying a set price no matter what. But as i said that cost can swing within a set range based on what people post them at and what people will stand to pay. So every seller of a LOTG already assumes if they post it for 4 million they are going to lose 400k of that to fees and have accepted that. If that fee was taken away it would stand to reason that perhaps the costs would go down 400k because the seller is still getting what they consider an acceptable return on the purchase now that they dont have to pay the fees. It also stands to reason that if the fees were increased say to 25 percent, that the selling prices would go up 400-500k so that the sellers again would be remaining in their comfort zone for profit off their sell. 

 

So frankly i agree, this system takes little out of the market. and likely  would not have a substantial impact on anything if it was removed. 

I'm sorry, that's not how economics works.

 

A fee, in this case a trade tax, is an expense that reduces both buyer and seller surplus, creating a tax wedge and causing dead weight loss, technically. The argument that taxes are a net loss to all due to this is often postulated; however, this is categorically and mathematically disproven in nearly all cases, because the positive benefit from three main goals of a tax oiutwiegh the marginal dead weight loss. Critically, the most important facet of taxes in CoH is important.

 

Taxes are usually born in majority by the buyer, as the seller passes this on to the form of a higher price, to cover their increased expenses. Being that this economy has less emphasis on actual incurred expenses, or COGS (cost of goods sold), this is generally less evident than one would find in a other markets. Further, the seller bares the burden of the tax here, as it is assessed essentially as a listing fee.

 

In the majority, here, the fee paid by the seller functions to balance total currency in circulation, in tandem with other levers, thus controlling the rate of inflation. Additionally, it serves as a barrier to entry, causing those who would engage in trade via the market to do so with a modicum of caution, as each transaction initiated will incur an expense that is a sunk cost, should no buyer materialize. In effect, this will deter blatant flipping of goods and encourage equilibrium.

 

The fee serves three main important functions, it assists in the balancing of available currency in circulation, helps control the rate of inflation and encourages price equilibrium.

 

Removing it would have significant negative repricussions, whether you believe it or not is immaterial; math is math.

[SwitchFade]

2 hours ago, Yomo Kimyata said:

I've got 2:30PM EST Saturday January 30 in the pool.

I hope you didn't wager on that 😭🤣

[SwitchFade]

On 1/28/2021 at 7:11 AM, hastened said:

The more I think about this, the more I think I agree.  I also feel like the fact its pointless means no effort should be spent to change it though; generally I would recommend to not do development work to remove things that are not hurting anyone and don't actually impact anything.

 

Specifically, you need to extract Inf from the system to combat inflation.  But Homecoming made it so easy to synthesize whatever you want as a side effect of playing the game, that the amount of product greatly dwarfs what people actually want, leading to persistent deflation.  Influence stops being a limiting factor, and inflationary pressure is relieved by people not bothering to spend their inf rather than by ensuring it is destroyed.

Not quite. Normal vs inferior goods, substitute goods and inflation are not equitable terms.

 

In this market all goods are normal and substitutable. This controls inflation as a bi-product and stabilizes equilibrium price at a level that is much lower than in a market where there are inferior goods and non substitutable goods; scarcity causes demand driven price points to a larger degree, as well as inflexibility, due to rarity.

 

Fees are a direct control on the rate of inflation, and sunk costs remove available circulating currency as well.

 

Sorry, you just happened to be in the line of fire after the levee broke and the economic word vomit flooded everyone in thread.... Because.....

 

 

That's not how economics works 😋😋🙏🤣🤣

Edited January 30, 2021 by SwitchFade

[Yomo Kimyata]

19 minutes ago, SwitchFade said:

I hope you didn't wager on that 😭🤣

It's ok; I hedged my position with out-of-the-money GameStop options.

[SwitchFade]

On 1/28/2021 at 6:14 AM, Shenanigunner said:

Since CoH is a closed economy (no value can be transferred in or out, as with some pay-2-play games or even disguised online gambling), and the economy has become massively inflated since Live... is there any point to the fees charged by the auction house?

 

I threw this out on General (yeah, I know) and got the following slate of answers, along with a fair amount of abuse because obviously only an idiot would even ask such a question:

1. It deflates the economy by removing Inf.
2. It prevents users from using AH for storage.
3. Many incoherent replies to the effect of "What, you've never used EBay, you [moron | newb | drunken fool | time waster]?"
4. It's an immersion thing that makes it feel real.

 

Okay, 1 makes some sense at the levels of the Live economy, and in any real-world economy dealing with real value... but in one where a 50 farmer can generate billions, maybe not so much. Nickel-and-diming auction transactions has no effect on the economy. And in the end, it's make a billion, spend a billion — and except for Inf that passes through other players, it all eventually gets spent on nonrecoverable assets, meaning it disappears. So it's not an endlessly inflationary system, even though it's gotten absurdly bloated.

 

2? Maybe. But a few million in Inf to store tons of stuff is no real barrier.

 

3 was far too common, and the comments, even the cogent ones, indicated that none of them had really thought about this. It is. It's like that in the real world. I don't get the question, dude. (I dunno why I bother to ask things like this in chat...)

 

4 is the only plausible remaining one.

 

But assuming the Devs could just remove these pointless fees from the system without excessive work or time... what arguments are there for keeping them? As a player since launch and a consumer economist... I can't think of a one except the very weak #4.

 

A 5 would be that it's some kind of real value that goes to the operators... a house percentage for playing. But as there is *zero* real value involved... wasn't even worth listing above. But I think it's a vague part of #3 — "of course we have to pay as we play" thinking that doesn't have any basis.

 

ETA: Just to make it clear, I'm not complaining and I'm not seriously asking for change. It's just an oddity that gets odder the longer you think about it, which I may have done to excess. 🙂

 

 

Hi.

 

*Deep breath*

 

I'm sorry, that's not how economics works.

 

Economics isn't a "real world" or "real value" thing, it is human behavior. It's not odd, it's actually quite sane and normal. At the risk of repeating the post 4 up I replied to someone else...

 

A tax, or fee in this case, serves three main functions,

 

As a control in the RATE of inflation, couples with other measures

 

A reduction of available circulating currency, as a sunk cost

 

A barrier to entry/risk requirement for engaging in a transaction

 

Removing it would foster rampant inflation, market manipulation and currency saturation.

 

That's the shortish version... More details up there 👆👆👆

 

💯🤯

[Shenanigunner]

42 minutes ago, SwitchFade said:

I'm sorry, that's not how economics works.

 

I'll stand by my presentation, for this synthetic microcosm.

 

Doubt there's any third participant here who cares about the bloody theoretical details. 🙂

[JnEricsonx]

A LOTG 7.5 recipe, not even the IO, used to cost about 100 MILLION on live.  Now the crafted IO costs about 6.  I can probably earn the better part of 6 mill in a day by just selling the level 50 generic recipes that drop, as long as the Enhancement Catalyst that seems to drop within the first 15 minutes of any of my 50's being on for the day.  Yeah, you can't get tons of money instantly from a Armageddon purple drop, but you can get 10 mill which'll sure help.

[tidge]

8 hours ago, Shenanigunner said:

 

I'll stand by my presentation, for this synthetic microcosm.

 

Doubt there's any third participant here who cares about the bloody theoretical details. 🙂

[krj12]

Influence sinks are absolutely necessary to keep inflation down in an artificial game economy.  Instead of removing existing influence sinks, we need to think

of the creation of even more...

 

[Techwright]

On 1/28/2021 at 9:14 AM, Shenanigunner said:

1. It deflates the economy by removing Inf.
2. It prevents users from using AH for storage.

 So it's not an endlessly inflationary system, even though it's gotten absurdly bloated.

 

2? Maybe. But a few million in Inf to store tons of stuff is no real barrier.

 

 

On 1/28/2021 at 10:25 AM, Yomo Kimyata said:

All this is very true, but my personal solution would be to address the deflation by changing some soft and hard caps and floors, and to address potential subsequent inflation by providing large scale influence sinks.

Preventing using AH for storage is a weak argument.  With 1000 character slots per server, I can have both a ton of new heroes/villains, AND a ton of mules.  This in addition to my bank slot, my AH storage slots, and the ability for each character to create their own supergroup and max out the storage in a lair.

 

If storage is really (somehow) a concern, and there really is a need to bleed off currency,  why not enrich the look and feel of the game while doing it?

 

On the simplest level, limit free storage and have the system charge an incremental monthly fee for anything above that.  It would need to be encompassing, though, because of the mule and supergroup storage methods. 

 

Assuming that can (somehow) be handled, you now have the chance for incremental, monthly paid storage.  The simplest way to deal with this is in the bank.  One can continue stuffing the bank vault, but everything above a set limit receives a monthly fee, bleeding off currency.  If there's no player activity (by account) for 6 months, or the character's currency is completely drained, then the paid vaults are seized and the contents "auctioned to pay the bills", similar to what happens in the real world. So one would have to be careful what gets put into the paid vaults.

 

But take it a bit further.  The bank is the simple way, but the stylish way would be to add, or improve, on the city, specifically:

 

Think about it.  I'm pretty sure we've something like this already in the port areas, though it's all gray and blah.  Instead, if the devs are up to the challenge, we can get sheds painted bold colors, and maybe fencing & retainer walls, even statements of "climate controlled".  The player can then designate the size of storage, and auto-pay the monthly fees on that.  If they want to store 10,000 threat reports and can afford to fork over the monthly fee, why not?  And the city looks richer and a bit more like a real city in the doing.

 

[Shenanigunner]

What a wonderful set of arguments... that assume Inf has any actual value.

 

The AH fees and other Inf sinks don't transfer the wealth anywhere, they just erase it. And copping billions from those sinks and expropriation of inactive player funds means... bupkis. It's not real money that would/could pay for Dev time to do anything, from revamp the economic system to prettify buildings. There is no finite amount of value or central bank or any representation of RW value here. At all. At least Monopoly money is printed on real paper.

 

More than half this discussion has gone down these roads, talking Econ 101 whiteboard scenarios as if the valuta under discussion had any actual value to be considered and distributed, outside the tiny artificial market of game enhancements. So I go back to my original, largely humorous position: the fees etc. are absurd, and lead only to compounded absurdity.

 

And would like to point out, once again, that my list of reasons for the fees are not mine, but drawn from the claims of the first discussion. I really don't have a horse in this race other than amusement at the pyramid of goofiness built on a nonexistent currency. 🙃

 

If it helps, I'll concede that the arguments for the need of Inf sinks are good ones; I am not sure I agree that the small nibbles of these fees really counter much of inflationary trend, but okay. OTOH, I think too many have waved away the fact that nearly all Inf ends up sunk — lost — gone from the economy — in the purchase of builds. A whopping 50+3 build represents nothing further in the economic cycle; the 500M to 2-3B in it is gone forever and not (reasonably) recoverable. So the Inf from playing is not infinitely accumulating at all.

 

But I gotta admit all of this is much more entertaining than, say, mildly asking someone to justify the car they drive. Whoo boy.

 

Edited January 30, 2021 by Shenanigunner

[nihilii]

A strange collection of strawmen. I don't think anyone is confusing influence for real money, nor have I seen anyone arguing the impact of spent inf in builds is null (although it would be myopic to say ALL that influence is lost, as people occasionally respec abandoned characters and dump IOs on the market to fund other alts).

There's a fee on the market. Are there positive consequences to it? Are there negative consequences to it? Some of the positive consequences we know for a fact. Some, we can theorize about with some level of confidence. I'm not sure any negative consequence to the fee has been evidenced or even theorized yet.

 

With that, it then comes down to simple logic: if scenario A has a nonzero benefit and scenario B has no benefit, scenario A is preferrable. That is true regardless if we can quantify the benefit of scenario A, because here's the kicker: as someone was fond of bolding, influence is not real money. This is not a real system. There is no added cost to the existence of the fee, no middlemen that have to be paid collecting it, no storage facilities, no digital infrastructure.

Your entire "amusement" at the "absurdity" of everyone else here seems tied to an inability or unwillingness of yours to accept this simple logic point. Setting your blinders on firmly, you then put your full effort into designing strawmen of people vehemently defending - whereas I mostly see attempts to explain. But no doubt, this is my own bias as part as the Great Crusade for the Right to Pay 10% Tax on every transaction speaking. What irrational and custom-bound animals we all are, ho ho ho.

[QuiJon]

18 hours ago, SwitchFade said:

In the majority, here, the fee paid by the seller functions to balance total currency in circulation, in tandem with other levers, thus controlling the rate of inflation. Additionally, it serves as a barrier to entry, causing those who would engage in trade via the market to do so with a modicum of caution, as each transaction initiated will incur an expense that is a sunk cost, should no buyer materialize. In effect, this will deter blatant flipping of goods and encourage equilibrium.

Yet it is not doing any of that because COH is not in any way representative of an actual economy with actual moving parts that work as push and pull influence against themselves. There is no balance to be achieved other then a random goal. It doesnt provide a barrier to entry because i can still be earning merits, buying convertors and making 4-10m influence pieces before even can even run a snyapse TF on a character. 

 

It doesnt control inflation because it doesnt remove any real beneficial amount of influence from the game. I can still right now make 2b a week running market scams, farming, etc. I already have enough influence to completely build my next 10 characters from nothing to complete with purples and winters and such all off just buying from the market if i wanted to. 

 

The point is the market is what it is. Nothing about this tax controls that. Sellers list pieces at prices based on what they feel the market should sell them for and buyers either meet that price or simply wait for them to come down if no one is buying them. But being how much influence we all mostly have most of us will load up on convertors and buy something similar to convert or just drop the cash to buy it at the listed price. And not once ever when setting items to sell have i thought about the tax in any way. 

 

I am sorry i agree with the OP in my opinion at its current level this tax does nothing. The sellers are getting what they want and the buyers are still buying and the prices have remained mostly steady because there is an ultimate point where it is easier to get it or make it for yourself then it is to buy someone elses on the market. That is what controls the prices not the fees. 

[Zepp]

It decreases short-selling (buy for 99 sell for 100) which would encourage market - based inflation that would harm people who don't play the market. This becomes more pronounced when dealing with large ticket items and preventing minor fluctuations from becoming market - altering fluctuations.

 

The deflationary pressure also prevents major game-wide inflation seeing as there is a lot of influence entering the system and very little leaving it.

 

Finally, you don't have to list items for storage, so you can literally use it as zero cost storage space accessible almost everywhere.

[Zepp]

2 hours ago, QuiJon said:

Sellers list pieces at prices based on what they feel the market should sell them for and buyers either meet that price or simply wait for them to come down if no one is buying them.

Not quite accurate, but basically how markets, in general, work. You might have some l33+ players try to drop the price of a certain item and then a larger group of players may swoop in and raise the price of the item 10 times higher, like gamestop.

 

The "tax" doesn't prevent that, but it will make buying at rare salvage at 360k and reselling at 400k unprofitable and improve the stability of the market in the way a government should have prevented the shorting of Gamestop in an attempt to profit from tanking the company.

[Bill Z Bubba]

I still want to be able to store inf in account-wide base bank. One with no cap.

[SwitchFade]

3 hours ago, QuiJon said:

Yet it is not doing any of that because COH is not in any way representative of an actual economy with actual moving parts that work as push and pull influence against themselves. There is no balance to be achieved other then a random goal. It doesnt provide a barrier to entry because i can still be earning merits, buying convertors and making 4-10m influence pieces before even can even run a snyapse TF on a character. 

 

It doesnt control inflation because it doesnt remove any real beneficial amount of influence from the game. I can still right now make 2b a week running market scams, farming, etc. I already have enough influence to completely build my next 10 characters from nothing to complete with purples and winters and such all off just buying from the market if i wanted to. 

 

The point is the market is what it is. Nothing about this tax controls that. Sellers list pieces at prices based on what they feel the market should sell them for and buyers either meet that price or simply wait for them to come down if no one is buying them. But being how much influence we all mostly have most of us will load up on convertors and buy something similar to convert or just drop the cash to buy it at the listed price. And not once ever when setting items to sell have i thought about the tax in any way. 

 

I am sorry i agree with the OP in my opinion at its current level this tax does nothing. The sellers are getting what they want and the buyers are still buying and the prices have remained mostly steady because there is an ultimate point where it is easier to get it or make it for yourself then it is to buy someone elses on the market. That is what controls the prices not the fees. 

I'm terribly sorry, that's not how economics works.

 

As in the previously mentioned thread, you're misinterpreting most of the functions I have explained and your reasoning doesn't actually pertain to them.

 

Economics doesn't cease to function because the economic environment is virtual; it will always exist where humans interact in an environment where there is a market, because economics describes human behavior.

 

I understand you have an opinion; however, that doesn't invalidate evidence and facts.

 

We've been down this road where I, and others, spend 50 pages explaining, with evidence, how and why it works the way it works, I'll leave it at...

 

The fee does work and is necessary. Math is math 💯🤯 and economic principles are clearly evident and functioning exactly how we expect.

[Saikochoro]

1 hour ago, SwitchFade said:

I'm terribly sorry, that's not how economics works.

I was going to respond to more comments in this thread, but since you were summoned I will leave it in your capable hands. Just quoted for emphasis. 

[Fingernailgun]

9 hours ago, QuiJon said:

it doesnt remove any real beneficial amount of influence from the game

I'd like to see the numbers you're looking at to make that conclusion.

[Tigraine]

19 hours ago, Shenanigunner said:

What a wonderful set of arguments... that assume Inf has any actual value.

No currency has any "actual value;" their only value is whatever people agree to accept it in trade for.  In fact, it could be argued that (within the game's economy) Inf has more inherent actual value than real-world currency because within the game it is impossible to pay for many things with anything other than Inf (and some with fixed costs), so there is no option for barter or any other exchange.  But the point is that you're operating on a series of false premises, the first being the divesting of normal currency characteristics from those of Inf. 

These false premises have been repeatedly pointed out, yet you refuse to acknowledge them.  At this point, your thought experiment has become a troll.

Edited January 31, 2021 by Tigraine

[hastened]

 

On 1/29/2021 at 10:42 PM, SwitchFade said:

Not quite. Normal vs inferior goods, substitute goods and inflation are not equitable terms.

 

In this market all goods are normal and substitutable. This controls inflation as a bi-product and stabilizes equilibrium price at a level that is much lower than in a market where there are inferior goods and non substitutable goods; scarcity causes demand driven price points to a larger degree, as well as inflexibility, due to rarity.

 

Fees are a direct control on the rate of inflation, and sunk costs remove available circulating currency as well.

 

Sorry, you just happened to be in the line of fire after the levee broke and the economic word vomit flooded everyone in thread.... Because.....

 

 

That's not how economics works 😋😋🙏🤣🤣

Its been a while since I really looked at the terminology surrounding economic supply demand curves and income elasticities.  Its kind of interesting. actually; I don't really agree that enhancements are a normal good, but I'm not sure if there's a good term for something with an income elasticity of 0, which is where they're at at current prices.  My income could drop by a factor of 5 or increase by a factor of 100 and it wouldn't change any actual purchasing behavior.  That's not really an inferior or a normal good.

 

Anyway, it is correct that Fees are a direct control on inflation.  But so is anything that takes currency out of circulation permanently.  I submit that by far the largest source of this is people who quit with a substantial inf balance.

 

I'm currently sitting on 3 billion influence.  I'm not actually going to spend that, becuase I have everything I want.  I don't even bother to sell things on the market anymore becuase I have everything and its basically pointless to gather more inf.  As long as I never spend it before quitting, that 3 billion inf is essentially gone, plus any more I make as a side effect of playing.  There are people with 10's or 100's of billions of inf.  That's the real mechanism removing inf from the market, not the market transfer fees, which is why I'm leaning towards agreeing that they are basically pointless.

 

In most economic systems, especially real world ones, people leaving and destroying their wealth when they go isn't a common enough destruction of currency to curb inflation, but it is here.