The Ecto Issue: My thoughts (Economics involved)

Thank you, thats some constructive criticism and not a bad idea if you ask me! That is if Anet is interested in solving the economy puzzle.

yes if you flood the market, and flooding the market would be a outside factor that the laws of supply and demand do not take into consideration
and eventualy mosy products find there equilibrium point and get to a constent price

if the ecto prices gets any lower, the ecto miners will be beaten even harder so they work faster

Bingo.

Guild wars has its own rules. And it has always been this way.

Demand > Supply = High Price (Crystalline Sword)
Demand < Supply = Low Price (CoF Greens)

Ectos right now are in the middle somewhere. They are hugely overfarmed, and DO FLOOD the market. Thing that's been keeping their price stable is the huge demand for them. However, that demand is starting to fade, while the supply stays the same, or increases. Which means...the price goes down.

Want ecto prices to go back up? Stop farming the damn things!!

For what? To flood the market even more? This makes no sense.

once again things tend to find equilibirum points, and the initial price do to rarity or w/e must always be taken into consideration, also if there is no demand for something that is usualy not taken into consideration

I guess what he's saying is that to maintain their same income stream, they'll have to farm even more (e.g. if they sold 100 ecto at 5K a pop before, to make the same 500K they'll need to sell 125 ecto at 4K a pop).

I'm not sure if they'll do that or if they'll just look for another income source.

They are slaves and get beaten if they don't make 500k a day.
Thats why ectos are red, they are blood ectos!

If you know nothing about economics and the laws of supply and demand, and it seems quite apparent a few of you don't, then this explains it very well.

heh wow that's clever.
but ecto prices don't really seem to be dropping for me
i still see people selling for 4.6-4.8k (as a reasonable price)

Can't we just settle for this, and leave it be?

MY LAST POST ON THIS TOPIC

http://www.glencoe.com/sec/socialstu.../overview.html
The Law of Supply states that more output will be offered for sale at higher prices and less at lower prices.

http://www.glencoe.com/sec/socialstu.../overview.html
The Law of Demand states that people will buy more of a product at a lower price than they will buy at a higher price, if nothing else changes.

As you read, keep in mind the difference between a change in demand and a change in the quantity demanded. A change in demand is a result of a change in the determinants of demand. A change in the quantity demanded is a result of a change in price.

REAL-LIFE ECONOMY DOES NOT APPLY TO GUILD WARS!!! ffs!!

GUILD WARS:

Demand > Supply = High Price (Crystalline Sword)
Demand < Supply = Low Price (CoF Greens)

^how it's always been. How it will remain. Don't need any fancy stuff or real-world comparisons. That is...just how it is. Plain and simple. The MORE of something there is in game, the LOWER the price will be (CoF Greens). The LESS of something there is, the HIGHER the price will be (Crystalline). Ectos are somewhere in between right now, because the demand AND supply are both very high. HOWEVER, the supply is slooooowly pulling ahead of the demand, hence the gradual price drop.

Again, anyone who wants the price to go back up...tell everyone and their mother's brother's cousin to stop farming the things!

Just a tip: No offense but quit quoting stuff that you barely understand. Thats how people fail.

My DEMAND is for this topic to be closed hopefully shall be met when a moderator is SUPPLIED. May we reach that EQUILIBRIUM.

Hey! I think he finally got it right!

Exactly - you had your sentences reversed.

In your original post...

That is absolutely incorrect.

However, what I think you're trying to say is...

"As prices increase, supply will start to increase in order to capitalize on the higher prices."

"As prices decrease, demand will start to increase in order to capitalize on the lower prices."

That's the true cause and effect.

Im pretty sure thats completely wrong...

What you are suggesting is that as demand goes up, prices will keep going down. So looking at something like the wii, if people really want that and it gets sold out almost everytime a store restocks, they are going to make the wii cheaper and cheaper everyday? Ok.... right im going out to buy my $5 wii, later all....

The right answer would be as people want it more, the price will increase since the rarity of the item will be more since it will fly off the shelves more. Now when there is less of them on the shelves, people will be buying higher, just like my friend who sold his wii for like $500 near the first time it came out (bastard) .

I too am in high school

As for ecto pricing, its basically demand increases value increases ( i like to think of ectos like stocks)

Ecto prices are based off the rare material trader prices.
No one sells to the merchant because you get less money.
No one buys from the merchant because it costs more money.
Other than the merchant there is no real way to price ectos.
Therefore supply/demand are thrown out the window, because there is no way to gauge either one.

If someone had a large amount of money or ectos they could quite possibly crash the economy, if you buy ectos and they peak at 10kea, you would get a significant profit because most would be bought at under 10k, on average about 7kea, so you would get~3k profit on ea. If you sold them to the rare mat trader, you could crash the price to ~1k or so, buy massive amounts of ectos, and make a huge profit by jacking up the merchant price. Of course this depends on the boundaries Anet has on ecto prices, I know that they can climb to 10k but I don't know how far they will fall... Who knows... I doubt anyone has the money for this... but think of the possibilities

I don't mean to sound negative in any way towards you but YOU are the one totally reading the graph completely wrong. That graph in wikipedia is showing a correlation between demand and supply. It is NOT interpreted as an x vs. y graph which is what you are reading it as. The graph is not read as, "as quantity increases, prices decrease." which is how the graph would be read in terms of an x vs. y graph (with respect to the demand line). The problem with how you're looking at the graph is you're most likely used to physics type graphs with a manipulated variable plotted on the x axis, and a responding variable correspondingly recorded on the y-axis.

The real interpretation of the graph (and this is clearly depicted in the text below the graph that is included in the wikipedia article) is its showing a correlation between what happens with price and quantity as the supply and demand on the graph are changed. You have to think of both the x and y axis as responding variables. The y-axis (price) is not a responding variable according to quantity. The real responding variables are how demand and supply correlate to each other as well as how the variables in each axis respond according to each change.

Basically its showing a situation at the very start of the graph that demand is currently high for a particular item, while supply is low. With respect to these 2 conditions, price is high for that item (since demand for that item is high), correspondingly supply for that item is low and thus quantity is low. As u see demand decrease, price correspondingly decreases and supply increases, quantity has increased. These 2 lines(demand and supply) are considered with respect to one another, since supply has increased demand decreases (basically people who want the item have gotten it, thus eliminating their demand for it, supply is not low so demand does not remain high)

Once again to summarize, the graph is not an x vs. y graph, and don't say there is no such thing because there are. The axises are responding variables according to how supply and demand are changed. Its not reading that price is high, so demand is high. Think about that for a moment, if the price of an item is ridiculously high, are thousands of people wanting it?. Use an example of a pencil... if a standard HB wooden pencil costs 100 dollars... are there gonna be thousands of people lining up for it with a huge demand to get this 100 dollar pencil? I think not.

Exactly. Therefore, with your logic, we must conclude that Anet changes them. Whenever Gaile feels like, she'll be like "Hmm, I think I want ectos to be 4.8k each today." And so they drop to 4.8k each!

I won't be happy untill Ectos are less 1K each!

YOU ARE FORGETING ONE THING:

*WHEN YOU BUY AN ARMOR/GLOVE, THE ECTOS DISSAPEAR! They arent handed over from one player to another! So the supply goes down down down

Bingo, it's not a circular motion, it's more like a semi circle. Some will stay in the market from people hording them and using them for 100k + purchases, but not always.

Farmer gets ecto
Farmer sells ecto
Ecto buyer spends ecto on item
ecto disappears forever

Oh and for the record, some people here clearly do not understand how economics works and would do well to pick up a book and learn about it.

Ah true i forgot! Yea they do dissapear as well as the trader having a near unlimited supply of it.... lmao

Also the entire ecto thing is a monopoly anyways if you think about it. They have NO COMPETITION at all, since no other people can make the same things they do and they always want the same price regardless of economics.

I am so tired of everyone blaming Ursan. Ursan has nothing to do with it. Right now there is nearly limitless access to UW the Ursan population is maybe 2% of all that is in UW. The fact that you can solo, duo ectos so easy is the reason. The price would be the same if Ursan was in the game or not.

I personally don't use Ursan because it is too slow, I can farm ectos much faster duo with a guild member or hero then a team can Ursan the UW.

Anyway I wish all the Ursan haters would find something else to bitch about, it is getting really old.

Krat

ummm.... everyone is forgetting the other factor involved in prices in a free trade market that we have in GW. Humans. Just say that i want to sell my ecto';s fast. i Just lower the price and flood the market and bring the price down. it;s easy, America has been doing that with the wheat market killing Australia for years.

So, we now have favour that lasts 33,000 minutes. LOL so i can go in whenever i like and farm ecto like mad. Just say then i want to make money faster rather then i would i say, flood the market with prices such as 250ecto for 3k each. that is still 750plat and would sell like crazy as compared to trying to sell 250 ecto at 4.5k. oki... i might have made 250-300k more... but that 750plat might go into other uptrade items.

given the fact that there are a huge number of gold sellers (and BUYERS!!!!) then gold really isn;t worth that much anymore. So, people can just easily buy ecto like it is water and the price will go down. simple.

also, i might be an ecto scammer. Say i have saved up 500k. i want to buy ecto cheap and sell high. my friends and i spam trade channels that we are selling cheap ecto at 3k and pretend that we have always just sold the stack when people PM. "sorry, just sold them". We do this for a month and artificially bring the price down. Then we buy up at 3k and stop trading... a month later we all start setting the price at 5k. the market will soon come up to that price.

remember, we are like sheep. once enough people start selling an item for a certain price, the whole community catches on....

No, that's more like perfectly elastic demand. A monopoly would mean a single firm has control of the supply.

Also, ecto prices were down before GW:EN was released.

It'd never happen, as smart traders would buy cheap ecto and sell it for more.

Anet needs to increase the uses for ectos.

This might be a flame magnet:
If the entrance fee for the UW cost one ecto. Then hundreds of ectos would disappear as people went to farm them and more ectos would come in as it was farmed. This would encourage group play as well because 5k is a lot to some of us and when split 8-ways, its fairly cheap. Farmers would be more reluctant to sell for cheaper as well. I don't know just an idea.

I think That Anet has set a minimum price on ectos, imo otherwise the ecto prices would have been far less then they are atm

euh...mister imo you are kind of lost, although the oil production is increased, the price is rising because, (if you read newspapers etc..) the government has to spend billions to protect the pipelines in war zone, if supply increases, the price will go down..its logic economics, if my apple store in a town of 10k people has 1 million apples, i wont increase their price to sell them, decreasing the price of the apples is the only way i will make people buy them hence making a bigger and quicker profit. Another example is when i used to work in a supermarket, sometimes we had to much "supply" of certain items that people didn't really buy, so what we did? decrease the price.

high supply+low demand = low prices
low supply+high demand = high prices

Wrong; it's people who affect prices, the trader is just a reflection of the player market.

They have. Its 100 gold each.

another reason not to paly gw if u were a farmer

To get into economics further (from what I think I remember...) as price goes down, so does the suppliers (1k per ecto = very little incentive). At the same time, if price goes up then there also wont be any buyers. So the current price seems to be balanced (equilibrium?). There is also a certain term given to this kind of market, there are many buyers and there are many sellers and no ecto has better quality over the next, so the sellers don't have too much control over the prices. If 90% of the people are selling ectos for 4.8k each, then its gonna be very hard for 10% of the people to sell them for 5.5k. Yes I know that there are those stupid "power sellers" though.

Now why is there such a large supply of ectos right now? It's because everyone needs to earn money somehow, and this isn't like a real economy where certain skilled people can do specific jobs. Anyone can become an ecto farmer. Ectos are one of the reliable items that can be farmed to make a decent profit out of it. Ever notice how when there is a new green item, it's really expensive? Then after a week everyone mass farms it and then it's worthless?

Also, the trader merchant can mess things up a bit. For all those people who go to UW in a group and get one ecto, they might just wanna sell it off fast. Why bother waste 20 min trying to sell the ecto only to earn an extra 1k? Merchant is much more convient (trading only district/auction house please :P). Now obviously the merchant sells for high. Some people must be buying from the merchant though to keep the price high. This whole merchant puts pressure on the ecto price to be competitive with the merchant so the price stays low.

Now really, making money isn't that hard in this game. Sure it might be hard to make 1 mil gold, but you don't need all that money. All these green weapons and mods and inscriptions are cheap. You can get a nice weapon for like only 20k. You don't need FoW armor or expensive titles. Those things are supposed to be hard to get so we dont have 5 million wammos running around in fow. Just by playing the normal missions through a campaign will earn you decent money to buy weapons and maybe with a little extra you can get 15k armor.

Btw: Yes the ectos do disappear when people spend it on chaos gloves, but they also magically appear from killing monsters. An equal balance of ecto production/use should keep the price steady.

The main people who want ecto prices back up are the people sitting on stacks of them who stand to make hundreds of thousands more gold if they can sell them at a higher rate.

You can take your stacks of ectos and stick 'em where the sun don't shine, how about that?

Except that UW is not the fastest way to make cash in GW, not by a long shot. I rarely bother with 600/smite anymore, since the number of dry runs (for both people) was making it marginally profitable as it is. Increasing the entrance price would certainly decrease the number of people willing to farm UW by a good percentage. This would have a feedback effect of driving ecto prices up, aided by the ectos being taken out of the economy by the entrance fee. Increasing ecto prices would essentially drive the entry fee up, driving more people away.

As for GW economics, it tends to be driven by scenarios as follows.

1) (Mob Mind) I want to make money, fast
2) (Mob Mind) Wow, 100k+40ectos for an armbrace, that DOA thing looks profitable!
3) Much farming of DOA ensues, without an increase of people who actually want the item to use it. (ie. items are being sought purely to sell, with no increase in the total number of buyers or "item users")
4) (Mob Mind) QQ, my armbrace is only worth 100k+15ectos

This is less noticeable with ectos because there are many people who have yet to get even 1 set of FoW, keeping prices buoyant longer.

Remember, a finite population with a "open economy" like GW (items being "injected" for no cost aka drops), and almost all MMO's, will saturate the market with every single item over time.

As to how much control Anet does exert over the price of ectos, I'd say it's questionable. They certainly could keep prices around 5k, by simply removing ectos from the traders stock when he has too many. In fact, the recent spike down to a couple of plat for an ecto (and the quick bounce back) argues that they have autobalancing systems in place to attempt to stabilize the price.

Tbh those first 2 and a half pages or so were one of the funniest threads I've ever read on here.

You're all forgetting that there's another "Ectonomic" rule in play here; the law of drops.

In any multiplayer game, any drop that is available and stays available is doomed to steadily decline. Lack of demand or bulk of supply can speed up this graph, but any item, ectoplasm not being excused from this, will decline in value if it keeps dropping, as in games, there will always be an easier way to get old items as the game develops. Ursan is a prime example of this in guild wars.

Sure, there can be small spikes of high demand, but prices won't stay that way, they'll just stick to the steady decline.



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Graph says it all.

As supply goes up, assuming no increase or decrease in demand, prices drop because suppliers must compete with each other to attract the same clients. Similarly, as demand decreases, assuming no shortage of supply, prices drop because suppliers must compete over a shrinking market.

In short: Just about everyone has ectos. Just about everyone has FoW armor if they want it. Hence, supply is high and demand is low.

Ecto prices could sky rocket when or if the game becomes abandoned for GW2, and new gamers buying GW are exposed to a gaming environment with fewer players (suppliers). This should create the establishment of a niche market (low demand but commensurate low supply leading to a customer base with few purchasing options).

I'd also like to say that I agree that giving ectos more uses would help to improve their value. 5 ectos = appearance change would be my solution, however ... no need to choke the supply and make it impossible for people who can only afford 1k from experiencing UW.

I actually had an economics midterm today, if you all must know. My teacher also emailed me to tell me I got an A- (woot! ) so I think, on the most basic of principals...

Demand for ecto is relatively stable. It's not very high, nor is it that low.
Supply of ecto is very high. And keeps getting higher.

I do believe Anet keeps it at a certain level though