Phase 3: Profit !

Let’s start off with this: I do not promote gambling. Also, I discourage everyone from gambling illegally. If you’re under the legal age, or live in an area where gambling is not legal, don’t gamble. Furthermore, I am not a gambler. I don’t gamble with real money or fake money. Even in WoW, where my virtual assets are vast, I don’t gamble. I don’t play poker with friends, I don’t walk down the street to a bookie, and I don’t travel to Vegas or Atlantic City to lay long odds at the beginning of a sports season. However, with all that said, I am fascinated by gambling. And, I think that there are some good lessons to learn from gambling that can be applied to the WoW AH. Why? Because right now, at the end of WotLK, there are a few items in the game that should be thought of not as commodities, but rather as bets.

For the purposes of this article, I’m going to talk about American football betting.

We’re right now entering the 4^th week of games (of 16 weeks of games) of the NFL regular season. I think that (American) football betting is interesting for many reasons- the changes in odds over the course of a week, betting trends, the “sharps” vs. the public money, “steam” betting, etc. I follow this throughout the course of a season, and on any given Tuesday of the NFL season, I could probably tell you the Vegas line for any of the upcoming games, or at least what I think the line should be.*

(*Basic Gambling Explanation: American football is usually a difficult game for non-Americans to understand. However, the basics of football betting are very simple. Football points come, usually, in groups of 3 or 7. The most common way to bet is to bet which team will win based upon a “spread.” So, if it is known commonly that Baltimore is a better team than Cleveland, the Vegas oddsmakers will “handicap” Baltimore by a number of points. If, for example Baltimore was “giving 6 points” or was “-6”, that means that you take away six points from their score at the end of the game. If you bet on Baltimore at -6, they have to win by 7 points or more in their game over Cleveland for you to win your bet. That number, the “Baltimore -6”, becomes what’s usually referred to as “the line.” Whichever team wins the bet is said to have “covered,” so if Baltimore beat Cleveland by 14 points, they would have easily covered the 6 points. If, however, instead Baltimore had won by 3 points, Cleveland would have covered.)

Example of an NFL sportsbook

The thing that NFL betting and the AH have in common is value of an item over time. In an NFL bet, the “item” is the bet itself, and the odds that one can secure for that bet. For the WoW AH, it’s whatever item you’re trying to sell (and how well it fits this analogy). From week to week, the value of NFL bets changes as information changes; the same is true in WoW for the value of items. Over time, as more information is known, item values change.

NFL example: The Green Bay Packers were one of a few teams favored to win the Super Bowl at the start of this season. At the start of the year, the odds were between 9–1 and 12–1 that they would win it all. After a Week 2 trouncing of the Buffalo Bills, the Packers looked unstoppable and those same odds dipped as low as 6–1 or 11–2. Now, after a tough loss to the Chicago Bears in week 3, the odds are hovering around 8–1.

Why does this matter? It matters because some items in WoW show similar fluctuations in value over a period of time, and those items should be thought of as bets, not as commodities. With this approach, you can take advantage of the fluctuations to make some gold. How? Well, the WoW AH allows you to do something that you can’t do when betting the NFL- you can sell the item when its value is highest. If I bet the Packers before the season (Week 0) at 12–1, I can’t sell that bet to someone after Week 2, when their value is 6–1. That’s illegal. However, those 12–1 odds have some serious value if the rest of the market is only offering 6–1 for the same bet a few weeks later. If you could sell that bet, you’d  be able to make some money selling to someone who wanted that risk.

However, unlike Vegas, (or, if you’re in Hong Kong having some dumplings with Zekta, Macau) WoW allows you to sell these items! Admittedly, there are very few items that I’ve found that fit perfectly into this comparison. However, most of those items are identifiable because they deal with something that will not exist in the game after the release of Cataclysm.

WoW Example 1: Tome of Polymorph: Turtle. This, as has been covered extensively, currently only drops in ZG. ZG is going to go away with the release of Cataclysm, and there’s a chance that the Tome could go with it, and so the only way for a Mage to have access to the Polymorph: Turtle spell is to buy from an ever-decreasing supply of these tomes. However, there’s also the chance that there will be another, cheaper way to train Polymorph: Turtle after the release of Cataclysm, ie: via a Mage trainer. Right now we simply don’t know. But the rampant speculation and buzz about the possibility that the tome will be gone for good (a la: The ZA bear, Atiesh, etc.) is pushing the value of the Tome up right now.

If you have a Tome right now, the longer you hold onto it, the greater the risk. Every day that passes brings the chance that Blizzard will announce something that submarines the value of the Tome. But, if they don’t, the Tome could be worth a small fortune in Cataclysm. You can choose to sell now, with value at an all time high, or you can hold onto it, effectively hoping that your Tome bet comes through and, to mix my examples, wins the Superbowl.

WoW Example 2: The Battered Hilt. Right now, Battered Hilts are (I am told) being sold on the Cataclysm Beta by a vendor for a few gold. Blizzard probably wants everyone to have a chance to see that excellent quest line (and they should), so they’re making it cheap and easy to access. So, even though the traditional supply (from the Icecrown heroics) of Battered Hilts is dropping in Cataclysm, there will be an outside source for them. In this case, more information has killed a market, and I am sorry for anyone who has a bunch of money tied up in Hilts.

Other Potential WoW Examples: Anything that is going away: Hakkari Bijous, Black Tabby pets, the ZG raptor pet, etc.

I’m rambling a bit and I’ll stop now. But here’s my point: a select set of items have value if you think of them as “bets,” and you should behave accordingly. Find these items and flip them, if you can! If I had a Tome of Polymorph: Turtle, I’d try to sell it now for a good amount of gold. However, if I couldn’t find the right buyer, I’d hold onto it and hope I get lucky.

One more final, pseudo-related note: I fibbed a little bit at the beginning of this post. In the interest of full disclosure, there is one game I do like to gamble on: Craps. I think that I am fascinated by numbers, movement, and speed of the game. Essentially, you’re betting odds that one number will be rolled before another. I do like to play craps, but I’ve only ever done so where gambling was legal (read: Las Vegas).

I hope this made sense. As ever, we look forward to any and all feedback. Thanks in advance, Dear Reader.

GL! /bow

[Warning: Non-Gold Wow-Econ Post Ahead]

The room was lighted by the radioactive goo, Notus (My pretty banker) and I  was on a heat argument on the configuration of the P3P network sub hubs.

“You cannot put that cable there, or the power supply would leak and overpower the whole circuits, the relay would be ruined, and…” Notus raised her voice.

“No, we had done that million times the relay will regulate itself, P3PN regulator is special designed to work under such stress, they had
even spend weeks on testing that….” I try to pull her back to logic, but well, you know, those draenei are really stubborn, only second to the dwarf.

“They, who? they are busy on launching the assault, they wouldn’t care less on the regulator…. those slacking gnomish engineer…” she made a big mistake here

“Hey, space goat, maybe you can insult a gnome, but never insult our engineering expertise!” Someone had to teach the girl respect.

~~~~~~~~

*Deee Deee Deee* The phonetic Device One (PH-ONE in short) rang in the heat of argument. It’s from Big Jimm.

“Hey, buddies.  ~~Zzz~~~~ Look, I got some ~~~~Zzz~~~~

Reel-like issue to sort out,

can you write some ~~~zzz~~~ pose ~~~Zzz~~~ this week” …

You can’t rely on Radio spectrum under radio-active environment, you know?

“What Reel-Like issue ?”

“~~~Zzz~~~ Wheel knife issue ~~~Zzz~~~”

“Okay buddy, although we don’t have any spare saw disk. we’ll take care of the pose thing. And remember; don’t feed it after mid night!” I talk to the phone near to the server room door.

When I was busy talking to Big Jimm, That sneaky girl push me out of the door of the room, and shut herself inside.
Just to “protect the network from my overlooked plan”.

Guess I’ll be the one who take care of this “pose” thing….

It had been a long time, I actually wrote anything other than schematics and blue print. So I picked up my tablet on the messy schematic table and walk out of the laboratory for idea. I walked pass the busy district square between the Auction Hall and Bank, trying to find a quiet place to make up my mind.

I decided to fetch myself  a drink, trying to have a civilized discussion with that girl is really exhausting which include lots of yelling back and fourth just to make a point valid.

So I get into the Inn I used to dwell and ordered my favorite drink.

An Gnome with Aussie accent was yelling about how we should build a statue for him while other customer just gives him a nay look.

The pink hair girl continue her speech after passing me the drink. Which is something about “Cast” and Talents, some accident happened else where and Some Eternal Crab presumably around Darkshore.

A interesting story to tell, for Big Jimm’s pose I guess….

Okay, back to business. Larisa asked a question, about how sad ghost crawler find no way to set “fun” talents for the gear-score and the non-elite-jerk-build discrimination.

Quote   “if players are dumb jerks it’s not your fault!”
Larisa do mean to comfort Ghost Crawler a bit and I do agree that they are doing a great job.

However the players (especially the raid leaders) are far from dumb as contrast doing the best thing they could to organize the raids.

Are those Raid Leaders requiring Achievement/Gear Score/EJ-Build is just plain stupid and Jerk?

If you notice, in a guild environment (Social or Not), we are more tolerance to Gear Score and Talent builds. E.g. A mage can never go frost in a PUG Raid, but is possible in a guild raid? Is that all it goes is “friendly” or “Social” to let them slack (To go in low Dps)?

We all know that good raider need more than gear scores, Achievements/EJ-Build, and in suitable case Dps/HP. What make a raider good for the raid are his/her skill / judgment.

Even for a person who know Gear Score is useless, rely on Dps to judge a player.

Gevlon made a point on that post and I would like to evaluate a bit.

The Market for Lemons

The theory goes like this.

There are two kind of fruit sell in the market Peach and Lemon which had a different price due to preference of traders.

There is a catch in this market though, the tradition of this village will pack all fruit in a bag, and the buyer cannot open the bag until the transaction is over. Effectively only the sellers will know what they put in the bags. (We’ll explain this weird tradition later)

In this experiment, firstly, no buyer would offer more than 50 cents, since they’ll be rip off the seller instead sell them a lemon. But the seller will also go to sell lemon instead, since the profit margin is much higher.

In the end, no one would trade peaches, even there are profit margin on them.

(The fail on ensuring the fruit is a peach destroyed the market)

The same happened in a PUG Environment. A Raid Leader (Buyer) could only pick 10 or 25 person in a raid, and everyone else (sellers) think they are good players (Even an M&S would pretend or unintentionally believe they are good.).

There are not much method to identify the player is good or not. Until you actually drag them into group and run with them. They had try everything they can to look through the bag, no matter how remotely it indicate that the player is good. Gearscore, achievement, talent build and Dps are effectively the simplest (thus quick) indication related to a good player.

Rational Discrimination

Given a fast pace of forming a raid, a PUG Raid Leader do not have the time to listen the reasoning of every candidate’s talent plan. Let’s see the graph… (We all do love graphs don’t we?)

Now, let NEJ_Noob means number of a Player without EJ Spec is a noob and NEJ_Good is a Player with an EJ Spec is at least an average player so on….

A RL can only observe a player with or without a standard spec, but no idea on whether he’s an M&S or Average/Good Player. As we all know the pug is flooded with M&S, NEJ_Noob and EJ_Noob would be outnumbered the EJ_Good and NEJ_Good. NEJ_Good lives only at the very top of the raiding ecology or guild-ed raid,

So when RL start looking at the chart, if

EJ_Good / (EJ_Good + EJ_Noob)   >    NEJ_Good / (NEJ_Good + NEJ_Noob)

Requiring an EJ Spec is a logical choice for an informed RL. And the cycle reinforces itself. Since having a EJ Spec indicate you are informed and had a higher chance of getting into a raid, player voluntarily give up those “fun factor” to get into raid. And thus more and more good player would go into an EJ-clone spec (Since number of Good Players are always more informative than noob and M&S).

Solution

In order to break this Lemon Market, the only way is to provide a valid way to separate the good raider and the bad raider. While it may against the benefits of Blizzard (Gevlon’s Belief), it’s the only key to get the Pug out of wipe fest and otherwise meaningless grind.

Maybe we can come up with a solution as players?

Woah. The times, they are a-changin’.

http://www.wow.com/2010/09/14/major-cataclysm-currency-changes/