Saturday, June 16, 2012

WoW auction house
(image from NecroRogIcon on Flickr)
, CC BY 2.0

I used to play the auction house part of World of Warcraft. I noticed that when I want something as a trader, I'm often willing to wait the 24-48 hours with a “bid” offer. But when I'm crafting or just wanting to play, I'm less patient, and I prefer the immediate gratification of the “buyout” offer. When I was selling, I'd just set the bid to be slightly below the buyout, but I'd also have multiple overlapping offers at different prices, different time periods, and different stack sizes.

There's an asymmetry between the buyer and seller in WoW's auction house. Sellers don't need immediate gratification. Buyers do. The “buyout” feature is used a lot. There's no corresponding “sell immediately” feature.

This isn't a new observation. EBay started as an auction site but now has a lot of traffic using “buy it now”. The difference is that in WoW, buying something is even more immediate — you walk to your mailbox and have a shiny new sword waiting for you — with no waiting for shipping.

If I were designing an efficient marketplace for a game focused on the buyer, I'd simplify. If all I want to do is buy a Fire Sword, what do I need to know? The lowest price. I don't need to know all the listings and who made them. I don't need to know the listing time period. I don't need to know all the higher prices. I don't need the complexity of bidding and the waiting time.

What do I do with the following table? Decide which item I want. Also, decide whether to pay more to get an item now or wait a bit and pay less. Also, if waiting a bit, there are multiple options for how long to wait and what the price is. Also, estimate the risk that I may not win the auction because someone outbids me. Also, should I buy two at a discount and then re-sell one of them?

ItemNumberLevelLow bidCurrent bidBuyoutTime LeftSeller
Fire Sword1331374514:31Stoneplanter
Fire Sword132339519:27Azlishan
Fire Sword131861781:35Morianna
Fire Sword2533748838:03Flyv
Fire Sword133438608:53Sven
Ice Sword41811031304:39Linkshot
Ice Sword411010514910:30Mordn
Ice Sword41951091453:46zxcv

What do I do with the following table? Decide which item I want and whether I'm willing to pay that price. That's all.

ItemLevelLowest price
Fire Sword345
Ice Sword4130

On the other hand, complexity adds friction. And friction adds inefficiency. And sometimes you want inefficient markets because they're more interesting for gameplay. The trading game is fun! You can play with multiple prices, different stack sizes, overlapping time periods, cornering markets, hedging, reselling for profit, etc. It's just not a great interface for someone who just wants to buy a sword. Unless trading is a big part of the game, I'd want something really simple. Tell me what I can buy and what the price is.



Nelson wrote at June 16, 2012 8:31 PM

The Eve Online markets are worth a look. Buyers are still faced with the same confusing "list of all auctions" thing, only in Eve it's useful because the location of the items is important. But what's nice is buyers can place buy orders too, letting the sellers come in and fill them later. Works great for commodity resources.

The WoW auction house is pretty bad. The Diablo AH is even worse; auctions are for 36 hours and there is no way to cancel them. Also, sellers are limited to only 10 auctions for sale. So there's a strong temptation to underprice things just so they move and a slot is free to sell something else. Grr. OTOH the Diablo auction house did get commodity auctions right; they automatically help you find the lowest price for commodity goods like gems.

Rick C wrote at July 03, 2012 7:25 AM

If I understand it correctly, the Wizard101 auction house works like this: if you want to buy something, say, a stack of reagents, it tells you the min and max prices for how many you tell it you want, and it'll buy as many as it needs to (or can, if someone beats you) starting with the cheapest ones.

Amit wrote at August 10, 2012 9:38 AM

Nelson: geographic economics is a fascinating topic; I've only read a little bit from a textbook and it influenced one of the games I was working on. Eve Online seems to do this pretty well, but I think it requires travel/transport to be expensive to make it interesting.

Rick C: nice! I've not played that game.

Rob C wrote at October 12, 2012 2:22 PM

While designing an efficient market is a cool puzzle to solve for a programmer, sometimes it's the inefficiencies that make the game.

Take something like Diablo 3 for instance, I would heartily argue that one of it's failings is that despite it's auction house's flaws, it's too efficient.

The more efficient player trading becomes, the more marginally beneficial it is compared to playing the game. In a game like Path of Exile, player trading is incredibly cumbersome, (no real currency, no easy transfer between players, few obviously good items, no auction house or offline trading) and because of that, nearly everything you get probably comes from monsters that you defeat. Items that you get that are obviously good for someone else, but not you, probably get sold to vendors or at best stashed for alts because it's too hard to sell them unless they're unbelievably incredible.

On the other hand, consider Diablo 3, where anything that's obviously good can get sold on the auction house, and so far more things get placed on the auction house than actually get used. This drives prices down, expectations up, and creates a real buyer's market. Items far stronger than what you are likely to find from playing become affordable, and soon the best way to "play" the game is to actually buy low, sell high, and never swing a sword unless you have to.

I guess it's a cool problem to solve, but is it a problem best left unsolved?

Amit wrote at October 12, 2012 9:20 PM

Rob C: I think it depends on what problem you want to solve. If you want to make trading a fun subgame (especially for sellers), then I agree (as I noted at the end of the blog post), inefficiency and locality are good. If on the other hand you are using the auction to set prices, then a simpler market might work better.

J wrote at August 10, 2013 10:31 AM

Hey Amit, Check out the way runescape does it with their grand exchange. Sounds similar to what you're talking about.