Diamonds and the market sustainability of "perfect" GW items

Hi all, I was watching Law & Order last night, and they had an episode about blood diamonds. During the show, they were saying that diamonds aren't rare at all, but since a few monopolies control the world's diamond supply, they're made to be perceived as a rare commodity. It is also because of this misconception, once diamonds are bought, they almost never make it back into the market.

So this got me thinking. Does this apply to "perfect" GW items as well, which are kind of diamonds in a sense, in that they're "perfect" and "rare"? So maybe "perfect" items aren't rare at all, and it's just that once someone buys a "perfect" item, they almost never sell it again. And in this case, the "monopolies" would be the bot sellers and also the chest runners, or whoever has a large supply of such "perfect" items. And this has contributed to the price of such "perfect" items remaining high.

Anyhow, what do you guys think?

P.S. As always, these opinions are my own, and my own only, and as such, do not represent those of Guru in any way, shape, or form.

Don't think it is comparable. You can't just go in a mine and 'farm' diamonds, can you? In GW anyone can go anywhere with no butting or restrictions (except the deep and urgoz). If you can't go somewhere then either you're not good enough or play the storyline ^^.

Actually, you can, well, not you or me, but companies. In L&O they said that In Africa, whoever controls the mines gets to farm them, kinda like the elite missions

I will speak from experience.. coming first hand from a rich guild. We manipulated the price of ecto. Often by several plat. Same with gems, and monsterous parts.

Sorry to admit it, but we spread rumours about monsterous parts only after we had bought dozens upon dozens of stacks of for example, eyeballs.. at about 90g per unit. (22,500 per stack), and then once the word was spread that parts might be used in chapter 2.. the prices per unit increased to a peak of 4.2p per eye. (granting us a profit of 1,027,500) Mind you, this is just one stack of eyes. We each had several =D

Rare skins have been hoarded as well, after all, it makes more sense to slowly slag one 15^50 dwarven axe off into the market at a time, knowing full well you have a couple more stuck behind in your storage, but no one else does. This adds to the panic of 'having to have it", thus raising the price. This used to be the case, as this was before the drop increase. Now it is almost pointless to try and keep something for value, because it depreciates daily and people are starting to catch on. Well, except for a few, who seem stuck in chapter 1.

But, for the most part, people are suddenly dumping their rares into the market, knowing that this is happening, so this attributes to the steady recent decline in 'rare' skins, and I mean what used to be truly rare. (with exception to tribal axes and the old sickles)

But yes, to sum it up. It can be compared, not so far as the reality of diamonds and the truth behind 'blood diamonds' but so far as commodity, market demand, fair market value and trading, yes.

Crystalines Are Rare And Most People Keep Them or Sell Them To People Who Keep Them So yes Probally Yes

Whenever thinking about the GW economy, I always think about this:

http://en.wikipedia.org/wiki/Tulip_mania

Thanks for being honest about the actions of you and your guild, takes guts to admit stuff like that

After seeing your post, I'm beginning to think there is some validity to my OP

You also have to take into account how many are being removed from the market by people like me who sell rare skins to the merchant.

Milas~

Guilds have been fixing prices for a long time. On the other side of things, high-end traders manipulate prices regularly. This is not necessarily done intenionally, rather, as soon as a couple well known traders start looking for the same item, the average player thinks the item is the next "big thing", thus driving prices up.

Actually, I doubt that there is one big supply, people are just playing more, hence more drops and more rare items. There is some truth probably to some price manipulation, but its not that bad. Imagine if, for instance dragon masks became tradable. Everyone who had one could sell to one group of people. They would pay more than the average player for that particular time.

But, this would soon change. After a while, maybe a month or so, demand will go up. Players would be forced to buy from that group, because they own all of them. And Voiala, any price they want they can choose to sell for. Some games have this problem, and it is very bad for the economy. I guess Guild Wars has deflation, while other games have inflation. The reason is any item or object in this game can be obtained for free, so the prices will never go "that" high.

What you say about diamonds is completely true. DeBeers controls most of the diamond market worldwide. Check out some info about it here (especially about how they got into trouble with the US antitrust laws):

http://en.wikipedia.org/wiki/DeBeers

However, I don't think you can compare the GW economy to the diamond market. Although diamonds are not rare, they are (like everything else physical) finite. Items in GW are never finite (ok, almost never - the HoD sword, and a few other discontinued items are exceptions). The game will ALWAYS make another. Sure it could be extremely rare, but it will eventually make another.

HTH

-Coy

wow didn't know that was true... about the diamonds. Thing is though, to get a super rare mod you should take in comparaison all the 100's of keys before you get a decent one, let alone the best of the best most valuable stuff.

You can see a good example with Kanaxai's items. Before Alliances were ferrying people for free or tips, his items were pretty pricey, upwards 250k+ for the sword. In a sense the Alliance that was holding access to The Deep was controlling the market with the number of Kanaxais or Diamonds that were on the market. Once ferrying became more rampant and more people had access, prices dropped like a rock, because the market was flooded with Kanaxai's items.

If there were items that can be controlled by a select group, then I would imagine it would be possible to control the number of items on the market. But, with everyone having access to most places, your options are limited.

I'm just still a little surprised that a single guild or a few people can have that big of an effect on the overall game economy. In the real world, that would be called price fixing, but you know, this is only a game

One big difference, though, is that ANet acts as the "omnipetent" watchdog over all the prices; whereas in the real world, there is no such thing as a watchdog being omnipetent. I'm not saying that ANet should enforce real-world laws in-game, I'm just saying that they have the power to do so if they chose to.

Dude, that takes dedication.

And that, everyone, is why you should buy AMD CPUs.

i believe currently debeers controls only about 50% of the diamond market. one of their competitors is canadian mined diamonds. in its heyday, debeers would buy up any diamond rough mined by other companies to keep them from flooding the market. these days debeers competitors have an interest in keeping prices high so they can maximize their own profit as well.

taking the monstrous eyes example, to function like debeers the guild would have to go around buying monstrous eyes, emptying trader inventory, and from any eye farmers. then they could allow a controlled trickle of eyes to the market at a price they set, say 7k and create an artificially low supply. The problem is that it is hard to create a demand for monstrous eyes in the game. Except when hype builds up around the forthcoming chapter of the game, it'd be pretty difficult to convince a player that they NEED a monstrous eyes, or even several.

In order to keep the players wiling to pay for the eyes, the guild would have to constantly create artificial demand as debeers does with its constant compaigns.

the difference w/ diamonds though is that diamonds have virtually no resale value. At whatever price you buy a diamond for, you are not going to get the same value back if you turn around and resell it. With the exception of truly (eg. colored) rare diamonds of exceptionally quality, most mass market diamonds you will be lucky if you get 50% by reselling to a vendor. The vendors won't even be interested in buying your diamond back at wholesale price.. usually they offer about 30% below wholesale. You could attempt to sell your diamond to a fellow consumer, but with the perception of yours being "used" and with no "return policy" and the possibility of you being a scammer on such a high ticket item, you will have to cut your losses on the sale. Your best bet in that case would be to sell one to a family member but only if they are looking for the same size, shape and quality diamond you wish to part with.

In GW, there are no such things as "used" items outside of "customized" and it's difficult to create long term artificial demand if you are not Anet.

So I'd say while the 2 would seem similar on the outside, they're not truly the same thing. GW inflation on non-rare items seems to have to do more w/ intense periods of demand/mania and speculation - rather like thestock market bubbles and the tulip mania

They are similar in that they still act in a supply/demand form - very little else. But, with that type of system there is quite a bit of sameness.

In the Diamond case there is really only a single supplier of decent quality natural diamonds - DeBeers. That's it - no one else. They have little control over demand but near total control over supply (unless you want low quality, industrial grade, or man made stuff). They can play with the supply curve all they want - they are the only game in town. I would believe the 50% quote in all natural diamonds, but not high end jewelry.

In a normal economy supply isn't that controllable - this is especially true in GW. Even though you have some guilds that have a large portion of supply, it is difficult for that to cause the price to increase by supply side economics. And even what is controllable tends to actually not be the optimum value (even if price is increased). The best they can do is what is said above - start rumors to greatly increases demand (or take advantage of a temporary increase in demand) then meet the supply. That is demand side price controll - opposite of the diamonds.

But then, we aren't really in a normal supply either - GW is a nearly unlimited supply only affected by time. Except in a few cases all have access (Elite missions are much more similar to diamonds if the controlling alliance is internally united to supply control and doesn't allow outsiders). This makes it MUCH more a damand based market. In dimonds we will eventually run out and supply will become fixed. It may be another 3000 years of mining, but it will happen (even if we move to other planets it is still fixed - it will just take longer).

An interesting thing in the diamond trade is that perfect man made diamonds are now possible. Artificial diamonds can not be told from a natural diamond - even by the most accurate means and the most talented people. A lot like being able to dupe a "rare" in an online game. DeBeers now laser etches all thier natural diamonds to ensure them to be "real". The man made perfect diamonds are not popular - in fact they are hard to find. So rarity is actually what is wanted - even though it is artifical. So, it actually comes closer to what is described by shadowfel than I would like. Though that is different from what was asked. Personally, given the working conditions in diamond mines and the death rate, I would choose the artificial one. Not to mention that I could get a giant perfetly clear diamond at a fraction of a price (looks being why I like them).

I contend that rare items arent a rare as we have been led to believe, and an in game auction house would reveal that. Lets not forget that Superior Mesmer runes sold for 5k before the in game trader due to their (falsely) perceived rarity. Adding an in game trader has significantly dropped the price of everything that has been touched, and I don't suppose rare skinned items would be very much different once we add an auction house.

In economic terms, there really isn't a supply and demand problem, its a consumer information disparity issue. In the real world, consumers can at least have a decent idea of the supply of the item being purchased, whereas in GW there is no real way to know how many perfect Dwarven Axes are out there for sale at any given time. Adding an auction house would at the very least, give buyers a way to gauge relative rarity, which has been shown before in GW to lead to a price drop.

One item that springs to mind are perfect zodiac weapons. People who currently sell 15^50 zodiac axes and swords for 100k and 5+ ecto are going to be out of luck when their perceived rarity is gone. Zodiac skins are significantly more common than a rare Tyrian skin or even a rare Canthan skin. If most buyers knew how common they were, the real value of a perfect zodiac sword would not be nearly what it currently is.

There is a fundamental flaw in the comparison between rare items in GW and diamonds, and it is that all diamonds in the world are sold through ONE company, DeBeers.

They have a global monopoly on the trade in diamonds, and while it is true that diamonds are common but it doesn't matter, as the only actor in the market is DeBeers and they are restricting supply, thereby keeping prices high. Anyone who tries to compete with DeBeers faces the consequences, and they are harsher than most would believe.

There doesn't exist any monopolies in GW, not even of Deep and Urgoz items. That a person doesn't sell all items at once isn't monopoly or manipulating the market, it is being smart.
That one clan or alliance uses its financial muscle to manipulate prices isn't monopoly either - it's speculation, and it is manipulating the market, but no more or less immoral than the trade in commodities.

No clan or alliance holds a monopoly, no clan or alliance has any means of smacking down competition, and rare items are actually rare - and so the comparison to diamonds is void.