Why are buy order prices lower than manufacturing costs?
It’s purely a theoritical question. It is something I don’t understand about the economy in the game.
Shouldn’t it work like this?
A factory produces something and sells for traders who put their own profit on the price and sell it to specific customers (who will use the product). In this analogy: manufacturing cost<buy order price<sell order price.
So why doesn’t it work this way in EVE?
(This question came up for me looking at the ship market.)
I add some aspects to this first post so that people don’t have to read the hole topic. Choosing points is a bit subjective but you can always read the hole thing.
People mentioned many situations when selling to the lower buy orders is understandable and there are some explanations for this anomaly:
- There are items that are dropped from rats and stuff. Let’s just talk about products created by players!
- There are stolen items. The griefer just wants to get rid of the item, it’s a profit for him no matter what.
My answer for this is that he/she stole it from someone else. Someone else lost that item. And there is stuff destroyed constantly. So this should increase demand. So market should be able to balance it out.
- Stockpiled items getting sold by people who just want liquid isk. My answer is that it’s mostly the same as the last point. Those items had to be manufactured at some point. And they didn’t show up in the market so this must have increased demand, increasing prices too. Sure, now they may be sold at a higher price but there is inflation so it’s still a value loss.
- “Ores I mine are free” people. I doubt that there are so many of these people that they can cause this imbalance in the market. Also if there are a lot of them they shouldn’t be wealthy enough to have big effect.
- There are many ways to decrease manufacturing costs. For example lower ore prices in regions, corporation infrastructure.
- Maybe there is a slight overproduction because of the lack of destruction. Meaning that the average of sell and buy orders are above manufacturing costs but so slightly that buy orders are lower or at the same level of manufacturing costs. For example buy order=10isk, manufacturing cost=11 isk, sell order=14isk.
- Seasonal imbalance in market because of moon mining changes.
- There is no consumption in EVE.
No technological progress in items (a Raven stays relevant all the time because of balancing) and no degradation of items (a Raven in a hangar for 5 years doesn’t need service like cars do).
- Bots. I don’t completely understand this point. Shouldn’t bots in fact help to balance out the market faster?
- Irrational people. Some people find enjoyment in building their favourite ship even if it’s not profitable. But again, can they have such an effect on the market?
- Centralized markets. In real life the bigger part of trading is about moving stuff to more effective locations. Maybe there isn’t enough of it in EVE. Everyone just goes to Jita or Amarr if he/she wants to buy or sell something. So the real life trading model doesn’t represent EVE.
- Opportunity cost.
- Buy orders above manufacturing cost get filled much faster than the ones below. So we tend to see only the lower orders when looking at the market at any time.