Can anyone show me how to figure out this 4.5$ line? der=0>

**FizzyBubbly** · 27-04-2012, 12:58

Remember that real world economics is very different from what is known as general economic theory. In practice we view economics as a system that is always attempting to reach equilibrium between Price,Supply,and Demand. However as a species we are full of imperfections and being the driving force of this system it is very hard for it to reach parity.

You are also assuming everyone will have some gold and wish to use it to buy items and only use real money to buy additional gold to bridge any gaps. But since items worth more than 4.5$ will likely be worth a lot more gold than one can easily farm, the amount of current gold you own may be negligible compared to the actual cost of the item you're trying to buy, in which case you would prefer to just buy it on the RMAH for cheaper (and yes it'll be cheaper on RMAH than on GAH if it's worth more than 4.5$, as the buyer gets to keep a bigger portion of the profit and thus wiling to sell for a bit less).

The last statement isn't always true in regards to sellers willing to sell for less just because they are getting a better deal on fees. This is called the profit margin, arguably on of the single most important statistics of a company. This is always trying to be increased by lowering costs(fees) and increasing price of goods or services sold.

217px-Supply-demand-equilibrium.svg.png dcr0455l.jpg

**Eeryck** · 27-04-2012, 14:05

Originally Posted by galzohar

You are also assuming everyone will have some gold and wish to use it to buy items and only use real money to buy additional gold to bridge any gaps. But since items worth more than 4.5$ will likely be worth a lot more gold than one can easily farm, the amount of current gold you own may be negligible compared to the actual cost of the item you're trying to buy, in which case you would prefer to just buy it on the RMAH for cheaper (and yes it'll be cheaper on RMAH than on GAH if it's worth more than 4.5$, as the buyer gets to keep a bigger portion of the profit and thus wiling to sell for a bit less).

That is the interesting thing about the markets being linked, if people don't have much gold, the cost of gold per 1000 will be high on RMAH. It is a self solving system.

Originally Posted by galzohar

Maybe people will just prefer to use a single simple gold platform and only buy gold on the RMAH. But there is really no indication that that will actually happen. People are both lazy and cheap, and that combination can cause any number of unexpected things, and not necessarily what you are assuming...

I agree that the speculation on this topic is at an impass till launch and we see what really happens. It was still interesting to have and thank you for all your comments. I was just thinking yesterday that I was going to let this topic die down because it was starting to get a bit circular due to its speculative nature.

**galzohar** · 27-04-2012, 17:32

When there is competition, lower fees means lower prices. Not saying that if fees were 1$ less then prices would be 1$ less as well, but if fees were 1$ less prices would drop (by an amount most likely smaller than 1$) due to competition.

**riptide** · 27-04-2012, 19:18

Originally Posted by Eeryck

It is not the actions of the same individual but the actions of many different types of people:
*The dedicated player looking for a BiS item, he would farm items and gold to buy something on GAH but probably not buy gold outright and very rarely if ever buy a BiS directly from the RMAH
*The get over the hump guy - already has some gold, can see something they want but don't want to grind that out. Buy some gold get it now. Still cheaper than buying outright on RMAH
*The instant gratification/twinker - again he will be motivated to supplement but not buy outright
*The rich kid - He is the one that everyone is banking on being in surplus. But no one is willing to admit being.

The time it takes for items to sell on the RMAH with comparison to the GAH may also further compound this behavior. Everyone has in game gold. If I have to make a decision and take a risk to sell my gold and wait for it to sell to get something I want on RMAH I am not going to do it. However, if I need 10k more gold to get the same/similar item on RMAH I will buy the gold instantly and get my item instantly, even if I have to pay slightly more than what the current exchange rate says the RM version of the item is worth.

Getting two markets going at the same time is just too complex. People won't want to manage it. The only reason an item would not go over $4.5 is if you insist on cost efficiency. I would argue that the market forces would ignore this inefficiency for one solid trading platform. With the oft repeated requirements that gold is viable and there is item rarity.

There are way more people willing to directly buy items with $ than you can imagine. It's not something that people have any reason to publicly admit it because there always people that are against "ruining the essence of the game". I honestly can't remember without going back and checking each listing how many TCG mounts I've sold on ebay and playerauctions. Sure they could buy gold.. but they generally get more gold buying the rare item and selling it in-game for gold than they do for buying the item.

**wrugoin** · 27-04-2012, 19:34

Based on the mathematics laid out in this discussion, is it safe to say that eventually all best end game items will only be placed on the RMAH instead of the GAH?

**AKUder** · 27-04-2012, 19:49

Originally Posted by wrugoin

Based on the mathematics laid out in this discussion, is it safe to say that eventually all best end game items will only be placed on the RMAH instead of the GAH?

Aside from people who need the gold, in which case it's probably more efficient to sell for gold than sell for money and subsequently buy gold, and aside from people who can't access RMAH or have some moral opposition to it, most high level items will sell on RMAH. Long enough sentence?

**DoxieVon** · 30-04-2012, 02:47

I think its safe to say that all the best end game items will be placed exclusively on the RMAH. Many people will recognize the rarity and value intrinsic to the best items, and will post them on the RMAH hoping to get RM for them. For those that are posted on the GAH it is likely that the item will be immediately bought and re-posted on the RMAH by someone looking to convert gold->RM as there is a high probability that gold production for sale will outpace the purchase of gold, and this will be the only other way to get through the bottle neck of gold->rm conversion... not to mention it will provide for a better conversion rate.

**Eeryck** · 30-04-2012, 14:29

Originally Posted by DoxieVon

I think its safe to say that all the best end game items will be placed exclusively on the RMAH. Many people will recognize the rarity and value intrinsic to the best items, and will post them on the RMAH hoping to get RM for them. For those that are posted on the GAH it is likely that the item will be immediately bought and re-posted on the RMAH by someone looking to convert gold->RM as there is a high probability that gold production for sale will outpace the purchase of gold, and this will be the only other way to get through the bottle neck of gold->rm conversion... not to mention it will provide for a better conversion rate.

By this analysis, wouldn't you be suggesting that over time gold is not viable?

**galzohar** · 01-05-2012, 11:20

I think so, yes. Gold needs to lose its viability for what DoxieVon says to become true.

**jwfcp** · 02-05-2012, 01:34

interesting point of contention, one faq says $1, another faq says $1.25, none say $1.50 any longer though.

but the big thing is that paypal is at 15% rather than the expected 2.9% plus $.30, it is also possible that the 15% is on top of that 2.9% plus $.30 fee.

http://us.battle.net/support/en/arti...al-information