Economic Analysis Of The New Market Changes

[Aphrodite_Sexy]

The new market changes bring about changes that cause it to be more difficult to change buy orders. This, while reducing bot trading and allowing for strategical trading, causes three other consequences.

1. The difficulty of changing a buy order reduces the elasticity of supply. This would result in a larger increase in price once demand of a product becomes high. This in the ship market may be seen as an increase in players increasing the frigate price to ~500k ISK, or an adjustment to abyssal sites pushing Gila prices up to ~400mil. This increase in price would also increase the rich poor gap.
2. This difficulty also decreases standing buy or sell orders. People are much more likely to buy from a standing order if they have to do a lot of calculations to place an order, wait, and not profit much off it, especially with the competition from max skilled traders.
3. The above two causes a huger gap between buy and sell orders, meaning people sells things for less and buys things for more. This would decrease production and cause stagnation in the economy. People are then also more likely to engage in activities that directly bring ISK, for example incursions or bounties. This is already the case. All of this would result in production and consumption of materials decreasing, and provided that these materials are mostly specialized in some things (fullerene or water cooled cpus), productions involving these would be decreased and many times people are almost unable to produce niche products. This would also cause trade to be more centralized in Jita, as lack of standing orders cause people to move to places where there’s more.
   This would be bad. An alternative would be to change the orders from to about 5 significant digits, and decrease sales taxes to allow for a flexible market (not increase like you did).

I hope I pass Econ.

[Do_Little]

As a small manufacturer, I find the markets working quite well. My adjustments include splitting my sell orders across multiple markets - small stacks are easier to modify if needed. I’m also listing near the midpoint in the market cycle for the products I sell. It means less opportunity for windfall profits but stuff is selling and I’m making as much as I was before the patch with a lot less effort.

[Yberta_Molk]

Some interesting points. I’m just waiting to see how it pans out, so far my operation hasn’t been affected but we’ll see how it goes.

[Acorn_Letourneau]

What do you mean by in the middle? You wait to produce, timing your entry into the market? Or list a average price and wait until your order comes up first on sell orders

[Do_Little]

Commodity markets are cyclical. Track the moving average over a reasonable period of time and you’ll see that it tends to cycle between a high - beyond which customers aren’t willing to buy and a low - beyond which vendors aren’t willing to sell:

You want to list your product somewhere in the middle so the market cycle passes through your position. Because CCP is making changes to create scarcity, we’re in a rising market and you can see that in the cycles. You should be able to get away with listing a bit higher than you would in a stable market.