Price Increase? ... or Inflation? ...

With the price of Ecto nearly 8.5k at the trader, the introduction of Dhumm and the impending SF nerf, surely the prices of Ecto are increasing as it becomes harder to farm, and more people hold onto their ecto...

But how much of the price increase is really just due to platinum inflation?

Too many of us make the assumption that platinum is the only hard currency in GW, an that its value remains constant. The truth is that regardless of GW's original intention, items such as Ecto, Zaishen Key and Armbrace of Truth have also become staple currencies for the GW economy.

Try to remember that Ecto aren't the only item whose price is going up, Zaishen Keys have also been increasing in price over the last few months. Or take a look at black and white dyes, why just yesterday I checked and black dye was at 11k.

Lets face it, platinum has become a larger part of the market than it has been in years. Between the fact that the majority of people offer services in enchange for money (Such as Vanquishes/Dungeon Runs/Location Runs) than they have in the past, couped with the introduction of Zaishen Quests and the Traveler's Gifts. More people are spending more platinum than they have in recent times and need ways to dump it; often on Ecto. As the demand for Ecto for platinum increases, so does the price of Ecto in terms of platinum. Same can be seen with all the other money holders, such as Zaishen Keys.

If it were really true that ecto were getting so much more expensive, than naturally the prices of items normally bought with large amounts of ecto would decrease. Does this hold to be true? No not really, a Ded Zhed is still 1600e, and a r13 E Blade is still about 65e.

At the same time I am not oblivious to the fact that UW is harder to clear than it used to be, and that with the impending SF nerf people are worried about the prices of ecto increasing and are hoarding what they have. But I also think that alot of the purely ecto farms remain doable and that with alot of people turning to consumable item farms and services, there's just more plat on the market causing the price of items to increase.

So wut u guys tink??@? Cause i'm pretty sick of all these zomg will ecto keep going up threads.

Underworld is still there. Just play the game, make some friends, and try some new things. Really. There's similar threads to this already open and active.

I understand your point of view jinkies, and i also understand the majority of the player base's OMG ECTOS 9k perspective.

Here's my spin.

Yes, there's always gold being dumped into the game, mainly through zquests. Yes, having lots of gold makes people buy ectos and zkeys so they can trade for the items they actually want. It caused ectos to increase in price over the RR days fiasco. However, its not the main factor of ecto prices rising at the current moment.

The net amount of ectos in the game is not decreasing (obby armor, merching), but consistently increasing (uwsc, solo farms) as usual.

A skill change may make ectos harder to acquire, but it doesn't reduce the amount of ectos already in the game!!!

On the other hand, the net amount of ectos for sale is decreasing (hoarding), as the vast majority feel ectos will keep going up. If players cannot find ectos for a reasonable price from other players, they resort to the trader (I'd rather give the trader 7.6k than a player 7.5k) causing the trader price to rise. When players see the trader price has risen, they in turn horde more as it reinforces their belief about ectos becoming rarer and more valuable.

In essence, its a vicious cycle of speculation. We saw ectos climb to 8.5k before Halloween and the skeletons were added into underworld, and to many's disbelief, ecto prices went back down to 6k a few days after the skeletons were finally added.

The price rise has reduced the price people are willing to pay in ectos, and thus the price people are selling at for many items (mainly items under 250e), as people feel less ectos is worth more. But also the market is very, very stale at the moment because of wintersday, hoarding to buy polar bears, hoarding because of the coming skill changes and awesome lag in kamadan.

I believe ectos will decrease in price after wintersday (less hoarding for polars), the skill nerf (it won't be the end of the world like so many think, there are actually resilient and strong pve players in this game) and when people generally get tired of hoarding because they want to buy things again. In a nutshell, I wouldn't buy 12 ectos for 100k any day.

p.s. this thread is better than the other 2.

Long story short, the item market prices based on the number of ectos in existence. The ecto market prices off the amount of time it takes to farm an ecto. Ecto prices are what they are because people believe that the nerfs will greatly increase the amount of time necessary to farm an ecto in the future.

They're probably wrong, but that's what's motivating the current pricing.

This is an interesting concept. I think you may have meant to say a devaluation of the official currency and I think you are right if that is what you are saying. Diamonds are up from 100g to 550g, rubies and sapphires are nearly 6k, its not just the ecto. I have stated before that I am bullish on ecto, but did not consider that gold has just became such a weak currency that nothing is going up , but its the value of gold that is dropping. The phenomenon could be a combination of things like inflation + the 1000k bank cap, but its best to wait and see before jumping to conclusions.

u must also realize the [b]deacreaseing[b/] number of animals in the game. animals are constantly being killed for money

I'm certain that in GW1 the amount of animals being farmed is a non-factor. This is due in part to an instanced world rather than a persistent one. I have not played one of those mmo's with persistence, but I imagine they even have protective mechanisms for not farming a species (and the drops/materials associated with them) into extinction.

Hmm I started going into this preparing a generic sarcastic response seeing this as another ecto thread. But after reading your post, I actually kind of agree with you. Your view does explain a lot. Kudos!

+1 to insight

@ above poster: I think he was just being sarcastic :P

agree. prices will stabilize after update.

A ded Zhed is still 1600 ectos, but that's because they can ask that price because it's that rare, while armbraces went from 45 to 40 ectos last week. Mainly because a couple of players were selling like 10 armbraces at a time in Spamadan. Can be just coincidence, but you will never see 10 mini Zheds sold at the same time, which would force other sellers to lower their price.

zkeys are going up because there are no more hero battles

Pls refer to the price elasticity of demand. Those perma-sin already destroyed gw economy due to ecto excessive surplus of ecto supplies. Thus, the price of ecto should have driven down to 100g per ecto due to uber surplus ecto supplies -- the ecto is more likely perfectly elastic and it does not worked out in GW. Volt spear is a good example for perfectly inelastic because people willing to pay high price no matter what the req is.

If GW implement the price elasticity of demand in the system, everything will be fair. IE, higher supplies of ecto = lower price per ecto or less supplies of ecto = higher cost per ecto

Therefore, GW violated economy law. That's why GW economy blows donkey balls.

Edit: If you want earn more profit per item, try force everyone to stop farming ecto, popular green and gold, etc. The less supplies and high demand eqauls to higher price per item. Whoever plays perma-sin a lot do not understand economy at all, and it will not make them profit at all in the real world.

That's why smart people don't want you to know about the price elasticity of demand law. Those smart people will MANIPULATE the price until the price is acceptable to everyone to purchase the price and ACCEPTED by seller, that's known as cartel. Cartel is pretty illegal in the USA btw and they will be arrested on the soil of USA. IE, Cartel of OPEC.

jinkies u got about 50,000 ectos in ure storage...i wouldn't worry about inflation your the bill gates of guildwars!...but one thing ure correct about is even tho ecto prices have increased...people still ask the same ammount of ecto's for items when ecto's were 4.5k

Then don't buy any ecto anything above 4.5k. Let the sellers desperately sell the price of ecto above 4.5k until the price driven down to below 4.5k. Those seller only if did not sucessfully sell any ecto equal to the fixed cost, they will sell anything lower than the fixed cost until the buyer accepted the reasonable cost. It will return to less elasticity, and the economy will back to normal like old time.

RED ENGINE GORED ENGINE GORED ENGINE GORED ENGINE GO the seller, you have a power to change the price of the market. You will have 100g per ecto if you are uber stubborn and refuse to buy any ecto that cost more than 101g per ecto. Capisce? (Proper way to pronounce capisce is: Kap PEE Shay, not Ka PEESH). Got it?

Communist will set the price to 4.5k flat rate. Capitalism will change any price until the buyer accepts the price.

not nearly enough gold sinks = massive inflation. 4 years later of that shit and here we are. i can tell you right now when the game was in development as a utopian universe in the designer's heads, never in a million years would they have thought rare items would be going for trade offs worth millions and millions of gold. they didn't think 100k would be cake to get and not worth all that much. the main gold sinks are what?
armor mostly.
-materials
-runes
-dye
lockpicks and salvage/id kits, other crap from merchant.
that's all, and all of the above you can find from players (eliminating the gold sink) except for armor which is only a one-time requirement.

what i say is start nulling our ways of making simple profit, and just like runes and materials, make an inscription/tome merchant whos pricing works like the rune/material trader based off supply and demand. that'd start sinking gold, and stop simply moving gold from one player to another while more cash flows into the market causing inflation.

isn't it something else how in-depth the economy of guild wars can be? lol.

Actually gold sinks are the reason for inflation. If there were no gold sinks then there would be no point to having gold and so nobody would farm it.

Since I aquired everything I wanted I have no need to farm anything, so I don't. If they added something that I want that needed to be farmed then I would.

Its amazing how quickly people forget before ursan and more importantly SF, ectos were pretty expensive. So were shards, I am sure those will go up in price too.

I remember when the chaos planes farm was at its peak ectos were 4.2k, people still wouldnt pay more in ectos for an armbrace. Made me sad to realize an armbrace was below 200k in cost.

Disagree.
People don't farm only for gold to spend that gold on gold sinks.
The reason there's inflation is that players farm also for gold they instead spend on things bought from other players AND they farm many other things, like for example raptors for event items, and they produce new gold on the way.

Inflation of gold that we had over this whole year is caused by the lack of new gold sinks, since the playerbase gets old and has already acquired most of things that require sinking gold out of economy.

The value of gold is in fact affected by a very delicate balance, and even very small outside adjustments can make a big impact on it. For example see the only real gold sink that was added this year - the Small Equipment Packs costing 2,500g. I have observed quite a drastic shock wave in the whole economy as prices of every low-end item and resource has dropped visibly. Such a small addition caused likely over 100 million gold to have disappeared from the economy, that gold would normally be spent on everything else.

And remember what the M.O.X. quest rewards did? They single-handedly reverted the massive ecto price drop caused be extreme overfarm going for a couple months since SF buff and for a short moment went even higher than before that SF buff. That was a lot of new gold that had to go somewhere.

So even very small changes can upset the delicate balance and affect the prices of all common goods. People who keep saying that GW needs more gold sinks should know that all a new gold sink can do is change the balance to a different level. But the question is - where would be the best balance then?

you gotta be pretty narrow minded to think that.

in every single MMORPG game ive played there have been UBER rare items which go for "insane" ammounts of money, thats just how online gaming works. As time progresses, the rare items get rarer, people get more money and the price of the rare stuff goes up up and up.

The price of ectos is based on the trader price.

Unfortunately the trader price doesn't really express what would otherwise be the free market price of ectos would be as there is no 'free market' to trade (trade channel hardly reaches enough people, and offsite auctions the same).

Create an artificial increase in price of trader in a short period, especially when there is expectations of a price increase, and that increase will stay. It will only decrease if people start selling to trader and with speculation as is, it is far more prudent to hold onto ecto. It really is a terrible system. Notice how Zkeys, which have no system of sorts, stay at a much more even level.

There was also a theory floating around on guru that I'm starting to like. A lot of hackers convert gold into ecto so it can be quickly traded and laundered after stealing an account. So the rise in ecto prices might also have something to do with the increased number of hacked accounts in recent weeks (as well as farming being reduced and speculators of course).

Yes, the trader tends to make changes stick. It's a two-edged sword, though. The trader also sends very clear signals as to when the price of a commodity is rising or falling. This precipitates and prolongs both booms and panics. When the price is rising at the trader, sellers dry up; when the price falls at the trader the market floods with sellers, perpetuating the shift.

If Item X sells for 100e and e=4k, then it is 400k.
If ectos go down to 2k, then sellers expect 200e.
If ectos then go up after Item X is selling for 200e to 8k, sellers expect 200e, and then it is worth 1600k.

My only concern is armbrace price, the ectos sky-rocketed and their prices barely moved.

Like I said, the price of Ectos is going up due to inflation.

Nobody buys armbrace for Platinum so their prices arent afected in terms of platinum.

If it were just the case of everyone hoarding their things because of the SF nerf, then armbrace would increase in price as well since DoA runs are based off of SF tankers.

No it doesn't. That's why its such a terrible system. It is affected only by buying and selling of ectos from the trader, it is a system that is easily affected by both rampant speculation and deliberate manipulation.

The ecto prices, by definition, are up because people have bought more ecto from the trader.

The average player, even in high-end PvE alliances, actually believes the SF nerf will drastically affect the influx of ectos (causing price increase). They plan for this by their hoarding and even buying of ecto (from trader) to maximize their profits when the nerf bat is swung.

However, those of us who've been around for awhile remember what ecto prices were like before any SCs, before even Ursan.....omg, they were 4.9-5.5k.

When the drama ends and the dust settles from the nerf, ecto prices will fall back down to this level because the SCers (if they don't create other forms of SCs) will go to farming ecto in more traditional manners, which in my experience ALWAYS resulted in more ecto for me.

It's important to distinguish inflation from exchange rate fluctuations.

You should only see significant long-run exchange rate changes between the major currencies when there are significant shifts in the composition of the economy; the game is old enough now that there are huge buffers of all the major currency items, which makes prices a lot harder to move in the long run.

A new equilibrium was hit when RR was removed with hero battles; a lot of what you're seeing now is (likely over) hedging for a supply shock on ecto with the next balance update. There's usually a lot of short-run noise in the exchange rates around the seasonal events, when holiday items become a big part of the economy for a few days.

I would say ecto prices rise because of the changes to uw - uw was made a bit harder due to skeletons and finally the adding of dhumm.
SC`s were almost wiped out of existance and now take a lot longer ( god i recall days before the SC existance and we all coped then ) and i also noticed more ppl were farming fow than ever.
If theres less ectos comming out of uw then yes prices will rise - x number of SC`s with 8 players getting even 2 ectos each totals a lot per hr considering the amount of ppl doing it and now that amount has dropped bigtime.

People have tried to deliberately manipulate prices, and they have failed at it.

You're fighting all the money in Guild Wars when you try to move the price in either direction. Push the price high enough, and people will simply sell to the trader to avoid the time price of reselling ecto on the open market. Push it low enough, and people start buying for less than they would pay on the open market. The only time that doesn't hold true is when there's a broad shift in players' expectations.

The trader does two things. It makes it more difficult to knock the system out of equilibrium, and prolongs rare periods of disequilibrium through its signaling function. Players get clear "this time the price shift is for real" signals from the trader and react accordingly. You're correct that the trader aggravates speculative bubbles. You're wrong to suggest that it makes price manipulation possible.

I don't think the problem is with ecto prices as it is with a cap on the amount of gold/plat you can store. I HAVE to buy SOMETHING so I can gain more gold as I have reached my cap on all my characters and storage for gold/plat. If I don't buy ectos I HAVE to buy something else.

But, in that I do HAVE to buy something else (outside of buying another character slot or another chapter which I ain't) I'd rather buy Zashien keys as they have interior value as well as exterior value. Namely I can use them anytime I want to try and get a rare or nice item. I know I can invest ectos in items, but, 1600e say for a Ded Zhed is pretty stupid when I could use them for 1600 chances of getting a bunch of rares out of the Zashien chest.

I also can farm Zashien keys a lot easier and in a lot more places than ectos. So, I get to go all over the place instead of being resigned to one or two areas to farm ectos. I literally maxed out on gold/plat by doing Zashien PVP and at least it wasn't redundant stupid PVE same ole mobs combat. Sad thing is others have found out about how easy Zashien key farming is now and it takes a lot longer to get into a PVP match that gives the most experience for them. Especially when Kurzicks were kicking balls in Fort Aspenwood. )

The other issue is the game doesn't burp out enough NEW content that is RARE that might help get rid of a lot of the ecto in peoples hands. Pretty pictures just don't make me want to cough up my ecto. A +20^50 new insignia or weapon type would. (For PVE only of course). I'm sick to death of +15^50 cap on damage items. No amount of color or contour in a new weapon is going to make me buy it unless it has MORE POWER.

Personally I think INSIGNIA's ruined the game AND the economy. Getting a PERFECT weapon that LOOKED kewl with +15^50 used to be hard and uncommon and even rare. Now you can get them a dime a dozen. If Insignia's never made it into the game GREEN items would have been more valueable. They just totally went over the top when they added insignia's.

So it really doesn't matter about ectos anymore the economy is so screwed the population dwindles and decreases and that's a big difference from the real world as well since population continues to GROW and there's no quitting and playing a new life in the real world like you can in mmo's or mmorpg's.

Someone needs to make a online persistant world with decaying and even breakage of items and have no monthly fee. I'd go play that. DAOC has that, but, it cost $15 a month to play it and is too group oriented. Too damn many group oriented ones online as well.

I love a good ole' discussion applying real world economics to guild wars. It's a topic I think about in my nerd head often.

When we were all assuming (naively, I might add), that SF was being nerfed in November, I liquidated EVERYTHING into ectos. Every valuable item I had in storage, every piece of gold I had on any character on both my accounts...hell...I cleared out my materials storage of almost everything, so that I could get as many ectos as possible. So now I'm sitting on over 300 ectos. (yes, I am aware of how poor I am in comparison to some, but I feel rich). My thinking was, for every 1K increase in ecto prices, I am now making $300K.

But then I started thinking about the elasticity of ectos. Why do people buy ectos? Only a very small percentage of buyers buy them to exchange for armor. Most people buy them to store money, and a smaller number of people (like myself) buy them on mere speculation.

This got me worried that if ecto prices jump, people will stop using them to store money, and that the price would quickly crash. I'm very seriously contemplating dumping my hoarded ectos soon, because damnit, I can't figure out what the value is. 13/100 is now upon us. Perhaps when they hit 12/100 I will pull the trigger.

"but one thing ure correct about is even tho ecto prices have increased...people still ask the same ammount of ecto's for items when ecto's were 4.5k"

I love this. People assume the price of an item is related to ectos, without any recognition of the change in ecto prices. Amazing how things like Heavy Equipment packs and Ambraces sell for the same amount of ectos, regardless of ecto prices.


My thought on inflation is 4 fold:

1. The economy still hasn't recovered from Red Resign Day.
2. Zaishen Quests put a ton of more money in the economy.
3. Runners for EOTN Dungeons are constantly improving, giving tons of money out to players who just stand there, collecting gold drops and collecting gold rewards for the quests.
4. Wintersday Event + Players being on vaction in real life cause alot of additional playing, questing, and farming, putting even more money into the economy.

because if you want to buy something, you'll be paying in ectos.

unless you enjoy a non favourable exchange rate on your zkeys, lockpicks or whatever else.

This person speaks the truth. People are overreacting.

Counter example Zkeys. Even during the height of RR when tons of Zkeys were flooding the market the price never really dipped below 4K and now they are around 5K. There is no trader for Zkeys, yet somehow even when events that greatly influence the production of Zkeys changes, the Zkey prices do not change much. When there is talk of something that one day might affect ectos, things change overnight. Its the trader that determines the ecto shift, not the players, not the market. You would be a fool to suggest that the value that the trader arrives at is the same as what a player driven market would derive.

There are a couple things going on here to keep in mind.

One is that a significant portion of the value of Zkeys is their currency role; I don't have a good feeling for how much that is, or even how you would even go about measuring it; but it's an essential fact that Zkeys are treated as a quasi-liquid store of value. Unlike non-currency items, which are liquidated if they aren't going to be used, people are generally perfectly happy to hold onto relatively large numbers of Zkeys. Hence you're really looking at an exchange rate fluctuation, not a change in commodity prices.

Second, unlike in the real world there isn't any good information on the quantity or velocity of any of the major currencies in GW. So when making exchanges people are really working on a very limited set of information; the supply and demand balance of the small fraction of currency up for exchange at a given time. Since we're talking about a currency here that people use to store value, there isn't a 1:1 correspondence with the increase in inventories and the amount on the exchange market; inventories and in-currency transactions increase a lot faster than exchanges.

Zkeys also behave a bit strangely in that the market for them is pretty throttled - meaning that demand becomes very inelastic far away from the established equilibrium price. I.E., if the equilibrium price is 5k, you can sell reasonably fast at 4.5k, but decreasing further to 4k doesn't give you a similarly sized increase in volume; you essentially saturate the market for people looking to make the exchange. Since the exchange volume is also very low typically, this makes prices move slowly.

In short - since we're talking about a currency spike with low information and a small exchange market, it's not surprising that exchange rates would drift slowly even in the presence of a significant quantity spike.


The value the trader arrives at is indicative of what the player market would derive - but the reasoning is a bit complicated. It's fast in contrast to the way the Zkey market is slow. Consider how the trader works. Its buy and sell prices are significantly below and above the established exchange rate, respectively. As such it's relatively insensitive to small changes in pricing expectations. The trader's main function is that it allows for very large volumes of currency to be exchanged when there's a shock in the expected exchange rate. Contrast this with Zkeys, where there is no such outlet for volume transactions.

Let's say that I expect Zkeys to appreciate significantly from a base price of 4k. I can probably suck up every Zkey that appears for sale at 4.5k as fast as they hit the market; a higher price isn't going to significantly affect how fast I can buy Zkeys - the only real threat is a huge enough shift that bidding wars break out, and even then it's usually rational to split the sales or take advantage of the friction in the system by jumping districts instead of starting said bidding war. So generally there's going to be a pretty tight funnel on just how many keys I can move that isn't super price sensitive.

The trader changes that, because for a significant enough price differential the volumes that can be exchanged can get huge. I'm not limited by how fast I can find people to sell me ecto at a marginally higher price; once my price expectations hit a threshold I can suck down huge quantities of ecto from the trader - and the trader also records this transaction so that everyone can see it. So what the trader's price is really a leading indicator. It shows significant price pressure on the top or bottom of the market, and people will see the trader's price shift as an indication that something real is happening. Zkeys, conversely, don't have any leading indicators like this, nor any potential for a huge spike in demand; everything has to move the old fashioned way.

In short, the trader gives the gold/ecto exchange rate a lot more information and much higher transaction rates on the margin than the gold/zkey market, which translates directly into how fast prices can adjust.

A very nice explanation; I've been trying to avoid this discussion.

The trader also produces resistance to price changes. Small perturbations are suppressed by players that experience high time prices and will buy/sell from the trader when a shift occurs. That generates stable expectations; players know to tune out small up/down perturbations in the trader price. Once that resistance is broken, demand changes as you describe.

In practice, it seems to take a broad-based change in player expectations to break through that resistance. If I had to guess, there are two causes on the upward side. First, the trader is probably hard coded to resist price increases after the inflationary fiasco in mid-2005. Second, price increases probably make it rational for botters to trader ecto and reinvest time saved in farming additional ecto.

The upshot is that the price of ecto is relatively stable over time, but is susceptible to large shocks.

The question I have is how can we be 100% sure Anet doesn't mess with merchant/vendor ecto prices? Nobody can really and Anet could have periodically these merchants dump so many ectos (like the US has farmers bury some of their crops) thus increasing the value of ectos. I don't trust anyone when it comes to ingame economies. But, on the other hand players control the value of Z-Keys as there is no Z-key vendor. They hold a nice high stable value and easily sell like hotcakes and even if they don't sell they still have a trade-in value at the Z-Chest.

Next with GW2 coming most all of this will just become moot when 2/3rds of the population moves the GW2 anyway. What is left in GW won't matter and prices will soar and the casual will get discouraged and quit anyway. GW is spiraling down to its place with the rest of the tired old online mmo's/mmorpg's of the past like EQ, DAOC, UO, AC and the rest.

How does taking a hand directly benefit ANet?

Are you really suggesting that certain ANet employees might manipulate prices for their own gain on the RMT market? EVE had an episode of that sort, and it was absolutely disastrous. Took them years to recover. I would imagine that there are safeguards, and the prospective profit would not be worth one's job.

Players control the prices of both ectos and zkeys. The outcomes differ because the mechanism that maps player behavior onto prices varies. Institutions matter; there's a huge research literature on the topic in both economics and political science.

You're seeing insanity in ecto prices because almost everyone believes that they will become harder to farm in the future. This is true, but the problem is almost certainly overstated. Unfortunately, it's impossible for educated players to take the other side of the bet and balance out the market. The storage caps on gold are inconvenient. Even if I think you all are dead wrong about the future ease of farming an ecto, there's a limit to the amount of ecto I can sell off.

The economy in GW has been goofy for some time now, but this has a lot more to do with the easy ecto regime than the game's age.