Sunday, November 7, 2010

A quick comment on the concept of "price gouging"

Real life has dictated that I apply efforts elsewhere the past week (i.e., correctly aligned my priorities), but when listening to the most recent episode of the otherwise excellent Call to Auction podcast the other day I was befuddled by their stumbling over the concept of price gouging in WoW.

Without totally rehashing the conversation, due to a bug (presumably) a glyph that was formerly craftable is no longer readily available. Therefore *ta da* it is pretty expensive until this error is fixed. A somewhat extensive debate occurred in the CtA podcast about the ethics of marking this up a tremendous amount vis a vis the term price gouging. I disagree wholeheartedly. Price gouging in the real world has legal ramifications and is, in most cases, wrong. WoW is a game and the axiom "whatever the market will bear" should be the only mandate by which you operate. A legion of professional and amateur blogs exist to demonstrate how to capitalize on inefficiencies, and all of the sudden there's an implied tipping point where profit margins cease to be ethical?

Buying items en masse and flipping them? Check.
Setting up an assembly line? De rigeur.
Cornering a market? Pro.
Taking a very low supply item and squeezing all the juice you can out of it? Whoa, whoa, now you've crossed a line.

It's like they said "we're ok with 750% margins, but 1000% margins are immoral!" I'm cartooning things and harping on a somewhat small topic, but it's been gnawing at me a bit. It's a conversation that shouldn't have even existed, and I guess that's my end point.

Better and less incendiary posts to follow, I promise...


  1. There are two parts to this argument and both are pretty meaty. First, is buying and flipping the Mage Armor glyph price gouging? You could argue that there's no such thing as price gouging in a purely an auction economy (no contracts, no coupons, no advertised prices). But if there was anything in the game economy that could be considered price gouging, this is probably it.

    We're not increasing supply or helping anyone by encouraging people to enter the market by crafting more MA glyphs. We're capitalizing on people that aren't informed and post for them for 10g. We're ticket scalpers with front row seats.

    Your other examples offer some benefit to consumers. Mass flipping? More suppliers farming because the sale price is higher. Assembly line? More goods that buyers want. Cornering a market? Access to something that buyers wouldn't normally be able to get at all. Flipping a mage armor glyph that everyone wants but no one can make? I'm... making sure that mages with hundreds of gold will have more access to this glyph than AH camping mages? Where is my parade? :-)

    So isn't this immoral? Despite the above, I don't think so. Blizzard broke this glyph. It's not my fault that it's now worth 500g or more. It's also not my fault that most sellers don't realize that. If I didn't flip these (and I do flip every MA glyph that I see for less than 200g), then lucky mages who found them for 10g would each be profiting hundreds of gold. Plus, as soon as Blizzard fixes this, all of the glyphs that I am speculating on will be basically worthless.

    TL:DR - People will be mad at you, but don't lose any sleep because you're charging what something is worth.

  2. The funny thing to me is that we're at a stage of the game where this doesn't really even matter that much. Maybe to a few hard core PvPers that are still trying to min/max they way through the game. But for the most part, this is purely about people who have no patience. Ironically, those are generally the same people who have little spare gold.

    If you don't like the price, don't pay it. Wait a couple weeks for when Blizzard will eventually fix it and make it craftable again.

    Bottom line is that items are only worth what someone will pay for it. And just because you happen to disagree with what someone else is willing to pay, that doesn't change what the item is worth.

    If it wasn't worth 500g, then no one would pay it and prices would drop. That's how a free market works. The end.

  3. Complaining about price gouging re: that glyph is idiotic. Probably the same people who don't believe in tipping.

    Blizz will fix the glyph soon and they'll be a dime a dozen.

  4. Thanks for the comments, all, I'm glad to hear that there are a few people in the same boat as I.