Welcome to Gaia! ::

Hi everyone,

My name is Sagger-AT3, and I've spent the past couple of months studying the Gaia economy closely.

I've spent the past four years pursuing a Ph.D. in economics, so you can say I am both a Gaian and an economist.

So in fact, I'm the first official Gaian economist.

I'll post several small seperate posts about the 2% listing fee issue. I'll start with the big picture, and then address specific concerns that we raised in the Site Feedback forum.

More Information is Better!

In the old marketplace design, critical pieces of information were missing. As a buyer, you were able to see what sellers are currently selling their items for, but you did not know what other buyers were actually paying for it. As a seller, you saw other listings, but again, you did not know if items were still in the vend because they were overpriced, or because it's a slow time of day, slow day of the week, etc. So both sellers and buyers benefit from more information in the marketplace, since both buyers and seller will now be able to see what other users are paying for an item. As a buyer, you don't want to pay too much, and as a seller, you don't want to be paid too little.

As for community members making a living buying and selling items in the marketplace - they now have better knowledge of what's going on, and can now sell more items at a time. Another more subtle point is that with more transparency in the marketplace, there will be more buyers and more sellers around, and more opportunities for "professional vendors" to trade. A listing fee will eat some of that increased potential profit, but as a whole, "professional vendors" are not really worse off.

Two more points before we turn to answering specific concerns and reservations that were expressed in the SF forum:
1. The listing fee will prevent price manipulation, maintaining the integrity of the added information.
2. Better information for the Gaia community will also assist in our continuing battle against bots.


That's it!
We now turn to actually answering questions.
A reminder: in order to keep this announcement easy to read, it is locked. We are having lots of threads in the Site Feedback forum, and in the beta testers' guild to discuss these issues.

1. The largest items today are already bought and sold on the exchange.
2. The exchange is less comfortable to use; as a buyer, you need to wade through so many threads, and once you find the right one, you need to read through all the bumps to figure out if it's still available. As a seller, you need to keep bumping your thread, read through lots of posts, and keep the first post updated so potential buyers will still be able to buy. Both buyers and sellers waste a lot of time doing it.
3. The exchange has more uncertainty: When someone is putting up an item for sale, there is no guarantee they actually own the item. When a buyer bids, there is no guarantee they have the gold. Some buyers and some sellers waste a lot of time dealing with bogus sales.

So the net effect will be some people moving to the exchange (lower fee, more time wasted), but more people joining the marketplace (more information and a level playing field). In due time, some of those who moved to the exchange will realize that and come back.

True. With the new marketplace, users who play this game know more about what's going on: more users will play it, and existing users will play it more. So it would have been easier to earn some gold, had the listing fee not been introduced.

The big picture - some additional notes:

Where does gold come from?
Gold and items flow into Gaia from many different sources: participating in the forums and arena, fishing, shaking trees, solving puzzles, collecting bugs, etc. The rate at which the gold and items flow into Gaia depends on what all Gaians do.

Where does all the gold go?
Gold flows out of Gaia permanently when someone changes their hairstyle, buys a guild, names their house, etc.
The rest of the gold circulates around Gaia, changing hands as Gaians buy items from each other.

When someone buys a store item, some gold is replaced with an item. When the item is "recycled" through the store, it is worth less gold. In this whole process, some gold leaves Gaia. If one Gaian sells an item to another Gaian, through the exchange or the marketplace, no gold nor items leave or enter Gaia. They just change hands.

What will happen because of the new marketplace?

The new marketplace has lots of new features. Some of them are intended to make participation less "risky" - when the price is presented to all participants, no one feels they have been taken advantage of. In the new marketplace, you see the price other users paid for items. So more Gaians will use the marketplace, and those who use it will use it more frequently.

Had this been the only change, it would have shifted the existing balance between the rate at which gold flows into Gaia and the rate of gold flowing out of Gaia. Had this been the only change, the long- term inflation, (which depends on the net rate of flow of gold into Gaia), would have increased.

This may be the place to mention that we have debated and are debating a lot about the rate of inflation. There are almost as many opinions about the "desired" rate of inflation as there are people who debate it. This is why we wish to keep things as close as possible to what they are now.

The new listing / transaction fee is intended to keep the existing net rate of flow of gold and items into Gaia. Since less gold/ items are leaving Gaia through the stores, a bit more needs to leave Gaia through the marketplace.

There will be a small "bump" in prices with the introduction of the new fee, but in the long(er) run, it will settle back on the same rate it is now, since the net flows are going to be the same. And we will be following, and possibly adjusting, to make sure it does.