Since it is now a year and a half after the mandatory 90% value of unusual trades was removed (for those who don't know, overpay was a concept where if unusual A sold for unusual B and unusual B was offered on unusual A, you would value the sale at unusual B*0.9), I thought I would look back on one of the largest and most universally liked rule changes to look at the impact it has made and if it was successful. Given that success is difficult to determine and varies from person to person, I have asked some of the moderators who helped decide to implement this rule to inform me what the end goal of it was.
Before I present you with the data, I'll give my personal predictions as well as a quick anecdote as to the purpose of the site in regard to pricing unusuals. First, I do believe that removing unusual overpay will increase the number of suggestions accepted raising unusuals, however I think the increase will peter out over time. As far as the purpose of the site, it has always been stated that the goal was to represent the pure value of unusuals, and higher priority would be given to sales which occurred in pure. Overpay showed that was a value that the site felt was important, and getting rid of it might have signified a shift away from pure valuation towards unusual valuation.
First though, we have to look and see if it even carried impact. To do this, I went back and looked at archived front pages from the months leading up to the change and calculated the percentage of unusual changes on the front page that day were raises. I did this four to five times per month, every two months to get a decent sample size without taking up too much time. I then repeated the process for a year after the change. You can view the data I gathered here:
This showed that the change certainly did have an impact, with the percentage of unusual suggestions raising unusuals accepted rising by 14%. Obviously this is not an entirely accurate representation of every suggestion, but it gives us a decent idea of the amount of change occurred due to the lack of unusual overpay.
So the impact of the rule appears to be more unusual raises and unusuals being valued for what they sell for in unusuals, not necessarily just their pure value.
But was the change a success? It certainly changed how unusuals were priced and traded, but did it accomplish its original goal? For these, I had to reach out to people who influenced the creation of this solution. Here are the questions I asked and the responses I got:
From Woifi
What was the goal of removing overpay? Were you targeting a certain percent change in unusuals being raised, or was it considered a success immediately after implementation because it was an outdated rule that no longer served a purpose?
As a consequence of the bud/key currency transition many hats were inflated, the 10% overpay rule helped to mitigate that. After some months of pricing hats in keys that issue got smaller and smaller.
Do you feel trading has evolved its own form of overpay in how common it is for people to 'quicksell' unusuals constantly at a smaller discount (~10-15%)?
Some hats sell for pure easier than others. It's impossible to treat all the same with a 10% overpay rule for example. With classifieds being more popular people undercut each other more often. That's part of the reason why some prefer to go with a discount. The classified deals page might also have a small influence on that now.
Did you feel like the change was necessary? And do you feel like it was a success?
As I mentioned above it's impossible to have a general overpay rule like that without making it unfair towards better hats. So yeah removing it was necessary and I think it was a success.
From Polar
What was the goal of removing overpay? Were you targeting a certain percent change in unusuals being raised, or was it considered a success immediately after implementation because it was an outdated rule that no longer served a purpose?
The idea that people would expect a higher payment in items vs pure has always been around and is a fact of life even outside of tf2 trading. maybe even more so. ideally we would only allow suggestions using pure sales. because there are now over 25,000 hat-effect combos, that's just not a reasonable expectation, so we have always allowed item sales. 10% may have been a reasonable number when 2nd gens first came out, but for the last 4 years, it has been a meaningless, arbitrary number. most hats require overpay much higher than that, so keeping a 10% rule really serves no purpose than to gradually devalue all unusuals overtime. we would have gotten rid of it years ago (we only removed it 1.5 years ago), but we intentionally left it in there twice due to inflation from currency changes from USD to buds and then buds to keys. it was our way to gradually counter the inflation that we caused when we changed currencies. after two years, we felt that most hats had been adequately updated and were no longer inflated, so we got rid of the rule completely. as a rule, it's really just unfair while accomplishing nothing. that doesn't mean that "overpay" has changed. if you're buying stuff from a pawn shop or craigslist or ebay, do you expect to be able to pay people in random items? people will always expect an overpay in non-currency. and how much people expect in overpay depends on how easy it is to sell the items offered. can be anywhere from 0% to 50%
Given the responses, it looks as though the overpay rule was a success. Although we still see rare unusuals overpriced from the bud to key conversion, overpay definitely devalued unusuals back to what they were initially worth. Getting rid of the blanket rule definitely helped as well and allowed unusuals to be more accurately valued if there was higher demand.
However, something that I thought about while gathering the data for this article was have traders evolved their own form of overpay? Now more than ever we see classified sellers giving smaller discounts for pure at a similar percentage to that of what overpay used to give us. Given that most of theses sales are listed as quicksells and not used to establish ranges, or are too young to impact the suggested range, they no longer show up in suggestions. In my opinion, this is definitely a good thing for the site. Given the abundance of unusuals available at these smaller, incremental discounts, it has become clear that traders no longer view backpack.tf prices as the price an unusual sells for in pure, but rather what it sells for in other unusuals. Or, as Woifi put it, "Some hats sell for pure easier than others. It's impossible to treat all the same with a 10% overpay rule for example. With classifieds being more popular people undercut each other more often. That's part of the reason why some prefer to go with a discount. The classified deals page might also have a small influence on that now." Overpay has become naturally implemented into the economy without the need for archaic, general rules which can often be inaccurate. If somebody pays 55 keys for a 50 key hat, it's obvious that the 50 key hat is worth more, so it goes up, while it previously would have been refreshed. If a 50 key hat sells for 55 pure, it is priced at 55 all the same. This could lead to negative consequences for paying full pure for an unusual. Why pay 55 pure for an item priced at 55, when I can pay, say, 45 pure for an unusual priced at 60, then just offer it as overpay? There's no longer a need to pay for items in pure. This is almost creating two separate evaluations for unusuals - one that is unusuals for pure and the other that is unusuals for unusuals. There is no standard trade-off for pure to unusuals, some unusuals can sell often for 90-100% of their full value while some can't even get 65%. As demand for keys increases their value will increase and the trade-off gap between unusual and pure will rise, however this is not shown in unusual prices.
Overall it looks as though removing overpay was just as everyone felt at the time - a huge positive. Overpay has served its purpose effectively, no longer lumping all hats into the 10% club and causing constant devaluation. The market has corrected for overpay, and the introduction of a buyout cap rule where unusuals cannot be valued higher than their buyout has still retained some of the pure valuation aspects. There are obviously still flaws in how items are priced, but getting rid of overpay fixed a big one.
Thank you for reading!
