World of Warcraft in-game economy is confusing to say the least. To be fair, it’s confusing at the first glance and it will make sense after awhile.

While I was browsing an in-game auction house for materials that I needed to brew a few potions, I found that that the price of the end product is lower than the total cost of materials needed to make the end product. I’ve heard about this phenomenon earlier in World of Warcraft forum but never really had the curiosity to investigate it myself. I was more interested in killing some other players and brag about it. But

For instance, to make a major healing potion, one needs mountain silversage, two golden sansams and a crystal vial. When I checked the price of silversage, it was priced at 99 silver (1 gold = 100 silver = 1000 copper). According to a census by Allakhazam, the average price is 72 silver. A sansam costs 39 silver on average while a crystal vial cost 20 silver from an NPC vendor.

And guest how much, on average, does it cost to buy a major healing potion.

If you’d guess around 1.70 gold (which comes from 72 + (39*2) + 20), you’re wrong. On average, the potion costs just 1 gold.

Funny isn’t it?

This sort of pricing is ruining my in-game profession, which is an alchemist. I gather all the materials and make those materials into potions. Most of the time, I buy the materials instead of looking for them. Gathering the materials takes extensive effort.

By looking at the current trend, it seems that I should simply collect the materials and immediately later, sell them straight to the market instead of using up the materials for potions and then offer the market the end product. This is a way to get around the weirdness of the in-game economy. But it certainly doesn’t explain the anomaly of the economy.

One explanation for what seems to be a weird pricing is that some sellers actually gather (or in fact, gotten it for free) the material instead of buying it off from someone else. With that, their cost, strictly speaking from monetary perspective while ignoring the effort needed to search for the materials, is lower than those that get their material from the market.

This explanation makes perfect sense. However, I wouldn’t these people that gathered the material by themselves gain higher mark-up if they had priced their items as if they had bought it from the market? Shouldn’t more profit and more gold be the goal? Moreover, these sellers don’t seem to add their effort into the price, which is ludicrous. As if, their effort shouldn’t be rewarded. Or maybe they just have different preferences, which is generally lower than those that think like me.

Because of these people, which I call “deflationers”, prices of everything related to alchemy are deflated, save those highest levels potions. In the end, every decent alchemist is forced to sell at lower prices.

Then, I realized, this is game theory, with a pun.

p/s – Leeeeeerrrroooooyyyyy Jeeeenkiiinnsss. Warning, large vid file. 16 meg.

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