Auto incrementing buy / sell orders

World of Warcraft's Auction House only allows you to put in sell orders, and then only with a "bid" price and a "buyout" price.

Eve Online's "Auction House" (Simply referred to as the "Market") is different, you can have sell orders AND buy orders, but there is no bidding. The price is the price for the duration of the listing unless the owner of the order specifically adjusts it.

And in both cases, adjust those orders they do! Both games have armies of "traders" that sit in the Auction House, Station dropping the price on the items they are selling by 1 copper / .01 isk in an effort to make THEIR item the "next one to sell."

Neither market has an inherent mechanic to find the "Optimal price" where the law of supply and the law of demand meet to find the price of the good at the quantity it is available at. And by "inherent" I mean the function brokers perform in the real world, connecting buyers to sellers. In game, you interact with each other more or less directly. You could argue that "traders" perform the function of brokers, but they do not, they are either speculators or profiteers. Eve has better tools, with a graph that shows price fluctuations over time, and a constantly adjusting "average region price." These are nice features.

Here's a possible solution that would work with the current systems to streamline that entire process: Auto incrementing buy / sell orders. Now, to be fair, this is just a thought exercise. I'm not convinced the AH / Market systems can really, fully work to produce true price equilibrium in all cases. The basic problem is the laws of supply and demand must be applied symmetrically. As a market gets smaller, the ability to accurately assess the demand decreases in relation to the ability to accurately assess the supply.

The system would track "current price" as well as allow buy and sell orders as Eve does. But no "bids" like WoW does. It's not an "Auction House" any more, it's a brokered trading house.

When you enter a buy or sell order, you are, of course given the option of just immediately accepting the best available price. Or, you put in an order. The default is to have the order be 10% above or below current (above for sell orders, below for buy orders.) with a drift rate of 1% per hour and a duration of 12 hours. In a market with high volume and perfect price equilibrium, it would take 10 hours for your item to reach the spot price and sell. If the item does not sell, it's delisted at 2% below current price. You can, of course, adjust from the defaults on an item by item basis, or change the base default to fit your strategy if you do a lot of orders.

The market interface, by default, would have one line per item type as opposed to one line for every lot of items for sale. That line would tell you the current average price, the current buy / sell price, and the number of items for sale. You should be able to sort the list by any of those criteria, or an item name search. A “show details” button gets you to a screen that shows the current price on individual lots, averages charts and sales volumes.

You might be thinking “Well, I'll just game that by setting MY default start point to 2% over the current price.” But if you try that, you realize why this works: buy orders are also drifting upwards to meet you. If there are enough buy and sell orders drifting towards each other, the most logical course of action is to just accept the best available price. The true purpose of the constantly adjusting prices is for speculators to indirectly influence the current price. The aggregate of their actions sets the “actual” price for people just playing the game to easily buy and sell their goods for whatever the actual price is.

Let's “what if” some outlier scenarios and see what would probably happen:

Case 1: Speculator buys out a low volume market and relists the items at a higher price. People who want to buy see this because all the items are above average. They put in a “buy order” at the default, 10% under drifting up. People who obtain new instances of the item and want to sell them see what's going on too, they set THEIR item to 20, 30, even 50% (somewhere between current and what the monopolist is trying.) These prices will merge towards center and either chase the monopolist out, or be bought by him in turn. But he can't burn money forever. The system's “perfect information” immediately informed buyers and sellers of this manipulation attempt and gave them an easy tool to deal with it.

Case 2: Way too many of an item are being listed to sell for a price that is much higher than the equilibrium, or “true market” price. By allowing the market to automatically trend towards equilibrium instead of being propped up by mass greed, the price in constantly pressured towards equilibrium. If that price is so low the secondary market is attractive, the excess inventory is removed that way. Also, less items are crafted / farmed if the ability to convert them into currency is reduced.