Market manipulation and why it doesn’t work on Orbis

[Placentica]

I'm going to save you from a stale-sounding wiki definition of "market manipulation".  What matters is from market manipulation come price fixing, price escalation, false news (war isn't happening, no need to stock up!), or whatever you can do to achieve a certain buy/sell price.  It can be quite effective if you have massive amounts of capital.  Usually it’s people who would short a stock or buy options, which have a rapid time value/decay in value, and then sell/buy large amounts of the stock to achieve a certain stock price.  There are as many ways as people can think to manipulate markets, so the above list is short.  If you can make a resource/stock do drastic things without news it can spook others to sell, thinking it's better to sell quick than wait for the avalanche of selling when the news hits.

 

With market manipulation there is generally there is a fixed amount of stock, commodity, etc.  You know what you have to control.  Would you try to price fix the cost of bottled water or a rare earth element?  (ooc) OPEC has a lot of supply so they can attempt to control price, but they aren’t just one single nation either.

 

Will market manipulation work on Orbis?  I would say no, absolute not and all attempts I’ve seen have failed.  And here’s why.

 

Currently (ideas Sheepy? lol), we do not have stock options, we cannot short a resource.  We cannot control the SUPPLY of resources.  Markets are all about demand and supply dynamics.  Remember the spikes a few days ago with $4k steel?  When people settled down and the demand/cash settled down, price returned to a more normal level, albeit much higher demand.

 

But I have seen my fair share of people try to manipulate the price/buy/sell side of a certain resource.  I made a lot of money selling into it as they bought my overpriced resource thinking that it was all I had (the iron run in speedround was fun).  All that happened is that people realized they could sell their resource for a ton of money and did so.  People started flooding the market with overpriced iron.  People buying iron realized they could just produce it now and demand went way down.  Orbis is the worst place to try to manipulate markets and I’m not entirely sure why people think you can.  With 10,000 people, you’d fail in a matter of hours.  With 1,000 maybe a day or two max.

 

So am I a “global market manipulatorâ€?  LOLNO. I've witnessed 3-4 runs on the market since Beta.  They all failed quite badly, even if I think it is a way to make the game more fun.  So I’d encourage people to think of creative ways to make money here.

 

The main reason for the market manipulating failures is, while we don’t have an infinite supply of resources, we are close to it since we have the ability to switch to more refineries or mines.  If lead shoots up to $2000 a unit, I put up lead mines, and everyone else does and we get lots more lead supply driving the price down.  Bauxite being one that the least people have (I believe) and thus would be a good target *wink wink* buy my baux, lol, but still would fail in my opinion as well.

 

Is trying to be the lowest sell or highest buy manipulating the markets?  No, it is absolutely not.  It’s merely trying to sell what you have at max profit or lowest price.  It’s not more manipulating markets than selling 100 alum you have or 50 food.  If it is, then we are all “global market manipulatorsâ€.  For me, who is heavily involved in the markets you could say I’m more of a “Market Maker†and you can google that if you want to bore yourself.   And in the case they can be quite useful and sometimes necessary to make markets run smoothly, not that I am claiming I’m necessary because there are maybe 10 or so Market Makers I’ve noticed in the game, which is good and makes the markets more lively for everyone.

 

But I have never and will never try to control price.  I roll with the punches and if something spikes, like anyone else I sell more, and if it drops, I sell less and lower my buy offers or remove them entirely.

 

So before we try to make the markets a new political spin-zone I felt we should at least discuss how they work and what you can and can’t do.  Please feel free to disagree with me or share you own opinions as I’d love to hear them!  Obviously many have figured out I think the markets are the most interesting aspect of this game and I think they are what will make, and are making, this game really awesome.

 

Also a few terms that seem to be confusing some:

 

Global Level Sponsored Embargo:  this would be when every nation on Orbis embargo’s you.  Say during the Red Raiders time, but 1000 embargos would be a bit hard to coordinate.  But I know there were more than a few alliances that embargoed them.

 

Alliance Level Sponsored Embargo:  This is when you order all your members to stop trading with a specific nation or alliance.  This is what the DEIC/VoC did to me for a reason that is still unclear, but completely acceptable since I don't mind and it doesn't affect much.  It doesn’t work because one alliance only makes up at most 7% of all nations, and usually about 3-4% of the total nations.  Imagine a boycott where only 3% participated.  Yea, we'd all laugh and ignore it.  Just thought I should clear that up since it seems there is some misunderstanding there.

 

tl;dr – bold parts

 

Thoughts?  I've love to start a discussion about how you use the markets in Orbis!

Edited October 27, 2014 by Placentica

[Caillou]

But Rich of Kaiserland took control of the market way back in beta! He even said so. 

[Phiney]

Vincent is also doing a great job of controlling the market, by buying my resources and then selling them back to me at a cheaper price. Good on you.

[Odin]

You're no manipulator.

You are just that annoyingly active with under/overbidding, that trading is frustrating.

Do you have like 11 monitors/keyboards hammering refreshbutton, to be always top at sell/buy?

[Shellhound]

You're no manipulator.

You are just that annoyingly active with under/overbidding, that trading is frustrating.

Do you have like 11 monitors/keyboards hammering refreshbutton, to be always top at sell/buy?

You do realize Vincent is in your alliance right, and that you're allied to Aamir?

[Odin]

What's with Vincent? Only one who brought him up was Phiney oO

And Aamir is from BoC and a human bot until he tells me sth else. Here or ingame message. Aamir, if you read this, tell me... he won't trust me -.-'

[Firetrout]

Well, that went off-topic fast.

[Shellhound]

What's with Vincent? Only one who brought him up was Phiney oO

And Aamir is from BoC and a human bot until he tells me sth else. Here or ingame message. Aamir, if you read this, tell me... he won't trust me -.-'

lol fair enough, sorry to kind of derail that I know this wasn't your attention Steve. I'll give a better response to this when I get home, and don't have to type using my phone.

[naTia]

I'd say the only effective market manipulation I've seen have been people (either intentionally or not) selling items at a price that is the average price at a time when the lowest price is higher than the average. Everybody then begins selling at a lower price to beat out the low price. A fairly annoying sight to behold, but nonetheless effective.

[Ayayay]

The game has become to large and without the avg trade limit it is nearly impossible for anyone to control the market for a long period of time. Also, with 1/4 of the members having started on the same day, there aren't enough large nations to control the market. While it happened back in Alpha, it would be extremely hard for it to happen again without an entire alliance working together.

And zots, it did happen in Alpha several times but always for 2-3 days max and then they would pull out

Edited October 27, 2014 by underlordgc

[Alex]

I, too, like the idea of trying to control the market. I've proposed suggestions addressing this before, but they weren't very well received.

 

1) Trade Unions

 

Trade unions would be player created and ran organizations that nations would join, and those who ran the union could set minimum caps on prices. So, maybe in the Steel Trade Union, all member nations can't sell steel for less than $3K. This prevents people from just undercutting each other left and right which is a common practice and results in reduced profits.

 

There are two main problems here, 1) Why join when I could just sell for $2,999 and have my stuff sell faster and 2) Are we going to get every steel producer in our trade union? If not, how are we ever going to sell anything?

 

For a trade union to be effective there would have to be some sort of incentive to join, and you'd have to get a huge share of the market involved.

 

2) Rainbow Council

 

This idea is based around each of the 10 colors being able to elect 2 representatives to the "Rainbow Council". The Rainbow council (with some majority) would then be able to embargo nations for all players, etc. or have some sort of influencing power on the market.

 

There is also the idea of simply having color senates, where representatives from each color are selected to create rules for nations on that color. For instance, maybe the Pink Senators decide that no Pink nation can sell resource X for less than Y amount. 

 

The issue with this is deciding how to make it fair, useful, and not overpowered.

[iljohn]

but I like the rainbow council it gives the color your in actual power not just a added bonus and might actually make the dead colors have a bit of life in them from other small or large alliances going to them to have power over a color

[Atzuya]

Those who undercut the price by $1 should be fed to lions.

[naTia]

For you, I shall begin undercutting prices by $2.

[Placentica]

You're no manipulator.

You are just that annoyingly active with under/overbidding, that trading is frustrating.

Do you have like 11 monitors/keyboards hammering refreshbutton, to be always top at sell/buy?

I agree with you, I'm not a manipulator, like I said in the OP.  Your alliance thinks so though.  Don't want to get out/under bid - then make a better offer bro not this +/- $1 business.

 

Anyway right now as nations are growing and the game is growing there really isn't much supply/demand in the markets.  As that picks up things will be much more fluid.  Pre-war resources were so amazingly cheap that it only made sense to keep buying as much as I could.  The only reason I was selling was b/c I just got too much stuff.  Post-war I expect it to be closer to reality in what resources should go for.

 

I also think the option to buy all your resources carries with a need to be very active in the markets.  At my peak I was buying 600 food a day, just to meet nation demand.  That just isn't feasible anymore for a variety of reasons, but it might look like I was trying to control the food market when all I was doing is trying to feed my people.

Edited October 28, 2014 by Placentica

[Clarke]

Anyone who puts up buy and sell offers on the same resource are not value trading material and need to be embargoed, nuff said. 

[Dwynn]

Anyone who puts up buy and sell offers on the same resource are not value trading material and need to be embargoed, nuff said. 

The fact that you and other members of VoC have done this in the past and you outright stating this now is hilarious. Just because Steve is more active at playing the market PvP game he's wrong for it? You're just bitter.

[SoS]

I was the first one in alpha to manipulate average price. I was successful because 1. I suggested Sheepy make the market move more dynamic 2. There was a floor price.

 

The dynamic market is good, because it was previously only moving $1 when I was manipulating the price.

 

No price floor just ruins it for the pro trader. Slow increase, fast drop.

Which will really screw a trader.

 

What you find is price will generally stay between the cost of production and the point where it's cheaper to produce it domestically. Part of that is information and part is intuitive.

 

There's ways players can overcome this momentum, but it would take a lot of money and risk and time.

[Atzuya]

People have been attempting to manipulate the market since forever, but of course it's instantly a problem when someone not aligned to you is doing a startlingly effective job at it

[Placentica]

Anyone who puts up buy and sell offers on the same resource are not value trading material and need to be embargoed, nuff said. 

By this post I'm assuming you didn't read my post, even the easier-to-read bolded parts.  You do know that EoS, UPN, and BotC is doing the same thing, right?  You going to embargo your allies too?

 

So it's wrong to try to optimize your income, but this is okay, huh?

 

Edited October 28, 2014 by Placentica

[Ashland]

By this post I'm assuming you didn't read my post, even the easier-to-read bolded parts.  You do know that EoS, UPN, and BotC is doing the same thing, right?  You going to embargo your allies too?

 

So it's wrong to try to optimize your income, but this is okay, huh?

 

This reminds me of this: 

[SoS]

Sheepy should make tanks and Improvements cost double. I wish I could expect it would improve as time goes on, but I expect it'll get worse. I keep repeating it, but this game needs some variables. Volatility.

[Ashland]

Sheepy should make tanks and Improvements cost double. I wish I could expect it would improve as time goes on, but I expect it'll get worse. I keep repeating it, but this game needs some variables. Volatility.

How would increasing prices of tanks and improvements add variables?  As opposed to... I don't know, natural disasters or whatever.

 

Don't you think humans add enough variability?

[Placentica]

I do think there is low demand in the market.  The war has boosted it but it's falling back down now.  Pre-war prices were extremely low.  So doubling resource costs wouldn't be a bad idea.  But if they are higher it might just mean people produce more themselves.

 

I'm just excited to see more players join the game.  As the game ages there will be a natural separation in the real price to produce resources and this should great more market sales.

[Phiney]

In the risk of going slightly off topic, do not increase the price of tanks. The reason steel didn't go as high as people expected for a longer period of time isn't that the price of tanks is too low, its that its too high, and so tanks are massively not worth it in long term war and alliances instruct their members to avoid them. I do, however think both aircraft and ships could have a higher resource cost.

 

Not only does Diabolos have resources buying at 1 PPU, he also has the opposite, resources selling at 10k PPU. Stop being a hypocrite and try engaging Placentica in actual debate considering he directly called your alliance out.