Diablo® III

RMAH demand driven?

I have been reading threads and found a blue thread that states the RMAH is demand driven. That is 100% wrong. If demand drove the market there never would be items selling for $250 each. As example, if Ford decided to sell a Focus for 100k do you think it would ever sell? Of course not, there is no demand for 100k Ford Focus's. I cannot believe there is a demand for digital items selling at $250 each.

Demand is created when lots of people want a certain item and purchase said item, thus the price goes up. But the RHMA started with prices out of most everyones price range, so how can you ever determine demand. You cannot tell me $250 items are flying off the digital shelves and thus creating a demand that will cause the prices to go even higher. I understand in the real world supply drives our markets, for the most part, but this in the digital world supply is not an issue.

The way I see it, the RHMA is greed driven, nothing so elegant as supply and demand.

I have been looking around and have not seen anything on data about the RMAH. I am wondering how the RMAH has done thus far. Meaning what kind of money has been generated. I suppose waiting a full week is a good idea, but I am really curious if people are spending real cash. I know some things are selling but up to this point I am curious if RMAH is in line with what Blizzard thought it would do.
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Demand is created when lots of people want a certain item and purchase said item, thus the price goes up.


lol, 0/10
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Your post doesn't make a whole lot of sense. What the hell does motivated by greed mean? If someone wants to sell something at $250 and another person is willing to buy it at $250, who is being greedy?

Just because you don't believe there is a demand doesn't mean it doesn't exist. I don't like it either, but SOME people are paying $250 for items, meaning there is at least SOME demand for items at $250, however small the demand may be. If a Ford Focus was priced at 100,000 USD, I'm sure they wouldn't sell a whole lot, but they would still sell a couple if not a few hundred Focus's given the size of the US market. This is what you are seeing in the AH now. Just because the prices are set at $250 by users, doesn't mean they will sell.

RMAH IS demand driven. However it takes time for supply and demand to meet each other at equilibrium. $250 dollar items are likely not flying off the shelves, it will take time for suppliers to adjust their prices down to a point where the items ARE flying off the shelves. Just sit tight and wait. Prices will be reasonable (in a market sense) eventually.
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I thought it was quite clear that the Blue post was indicating that prices are high due to the craziness of the debut of the RMAH, but prices eventually would be demand driven. To me that means prices will eventually start to drop off as people start to realise they have to set more realistic prices to sell items.
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some guy puts up an item for $250, another guy buys it for $250

there you go. Item was sold for $250 meaning that there was demand for that item.
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some guy puts up an item for $250, another guy buys it for $250

there you go. Item was sold for $250 meaning that there was demand for that item.
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06/16/2012 04:12 AMPosted by Ambro
I have been reading threads and found a blue thread that states the RMAH is demand driven. That is 100% wrong. If demand drove the market there never would be items selling for $250 each. As example, if Ford decided to sell a Focus for 100k do you think it would ever sell? Of course not, there is no demand for 100k Ford Focus's. I cannot believe there is a demand for digital items selling at $250 each.


If there was no demand it wouldn't sell.

Demand is created when lots of people want a certain item and purchase said item, thus the price goes up.


Not for luxury goods. Luxury goods don't necessarily have a lot of people buying and bidding the price up -- they are priced as luxuries for a smaller market that is interested in buying the luxury item and is willing to pay the requested price. An example is a Porsche as compared with a Ford Focus. The Porsche has strong demand, but far fewer units are sold, and very few people in the market as a whole want to pay what Porsche demands for a vehicle, so they don't. But there is still a healthy demand for Porsche's, and the price is maintained by the seller (1) keeping the volume down and (2) setting the price point that is acceptable to its smaller, luxury market.

This is the same for the RMAH -- a 1300+ DPS weapon is a luxury good. It's the Porsche of the game. There are limited quantities, and there is demand for the weapon at that price, even though the number of people generating that demand is smaller than would be the case if it were priced at $10.

But the RHMA started with prices out of most everyones price range, so how can you ever determine demand. You cannot tell me $250 items are flying off the digital shelves and thus creating a demand that will cause the prices to go even higher. I understand in the real world supply drives our markets, for the most part, but this in the digital world supply is not an issue.


Supply is indeed an issue because of the drop rates. Blizzard is keeping the supply of very good gear (high DPS and good/useful stats for weapon/armor type) very low indeed, which creates scarcity and drives demand. This will even out over time as more people reach the later phases of the game and more of these items are farmed up and placed on the AH -- as they become less scarce, the prices will drop. But what we see right now is fairly classic supply and demand action -- an item which is in limited supply being sold for a high price, because the demand, even at that price, exceeds the limited supply.

The way I see it, the RHMA is greed driven, nothing so elegant as supply and demand.


If this is the case, and there really isn't demand for the items at $250, then we will see prices fall as sellers reprice them at lower prices. This market reprices slowly due to the mandatory listing times, which are not short. So, in a week or two you should be able to tell by whether things are generally being repriced or not.

Keep in mind, however, that the relatively small market that does spend real money on virtual items has deeper pockets than most people think. Back in WoW's heyday, for example, it was not uncommon for full loaded level capped characters to sell for 1200-1500 on the black market.
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your first few sentences dont make sense, 0.
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$250 is "nothing" to some people, so some of those items will probably sell just because the buyer doesn't see much difference between $2.50 and $250 (just a few pixels between the 2 & 5). There's a limited number of players like that, so once they've gotten what they like, the high end market will be saturated. There will always be a lot of items for $250 just because there's no cost of buying that lottery ticket that could win you $250 in 36 hours. I suspect lower prices will be more profitable though simply because you sell more things.
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The RMAH is an almost flawless example of supply and demand. You are either pretending it isn't because you don't like it or you are not defining "demand" correctly.

The D3 economy will be the source of course studies in economics (like WoW was) because it is such an ideal situation to observe an economy in action and actually see hyperinflation, supply and demand in action in a relatively short period of time.
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Your post is wrong on a very fundamental level. It is absolutely 100% demand (and supply) driven! It's about as pure an example of supply and demand as you can possibly find. I really REALLY wish they would open up the statistics, since you could actually study it as a pure, real-time supply and demand ecosystem. When new updates come out that tweak a certain item, you could study how the prices of affected items changed.

Just because people are posting all their worthless garbage at $100, $150, $250 doesn't make it the fair market value of that item and it doesn't mean it's selling. It's only when the items are selling that you can say that the fair market price has been determined.

Every time you see one of those auctions end without a bid, it means that the price was too high. Demand at that price point simply wasn't there. It's supply and demand working perfectly.
Edited by Myrdrexial#1694 on 6/16/2012 5:01 AM PDT
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I read the posts you all have made and while I agree with some of what you all say I do not agree with all, of course.

Some of you seem to think this is supply and demand at its best. Some have said Blizzard is keeping supply down to raise prices. Well that is simply not true. If supply was the reason for high prices then there would not be 35 pages of Lacuni Prowlers, and there is. Or how about Andariel's Visage. There are 46 pages of that. And there are many more examples, this has nothing to do with supply causing price increases.

I have since read that much of what you see is in RMAH, 90% about, is placed there by Blizzard itself, that more than anything explains the high prices.

Anyway, to upset to contiinue. RMAH has ruined this game for me. I like to play and hope for the best when it comes to drops. Now I only play in places where I have the best chance for high level drops that I think I have a chance to sale. Meaning inferno ponies or act 3 and 4.

As for the high prices, I have a piece in the RMAH that is the only one of its kind. It is a legendary piece and ones like it, minus a couple stats only mine has, are for sale at $250. I put mine in at 150ish I think, been there for a week has not sold. So, I really do not belive there is much of a market for super high level stuff, at least at over $100ish each piece.
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I have been reading threads and found a blue thread that states the RMAH is demand driven. That is 100% wrong. If demand drove the market there never would be items selling for $250 each. As example, if Ford decided to sell a Focus for 100k do you think it would ever sell? Of course not, there is no demand for 100k Ford Focus's. I cannot believe there is a demand for digital items selling at $250 each.

If people don't demand $250 items, then why do they buy it?

What, are you a supply-sider?

Yes, economies are demand driven. In fact, the reason why the unemployment rate is 8.2% is a lack of aggregate demand.
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