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The key price thread

  

181 members have voted

  1. 1. Should Keys Go Up Or Down? Would They Help The Economy If They Are Higher?

    • Up / Yes
      59
    • Down / No
      122


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base64

I seldom make lengthy comments on suggestions, nor express my views openly on this topic in the old forums. 

 

but I feel like I have to say something after the guys on Reddit proposed so many arguments. 

 

So here is my response

 

http://tf2finance.com/2013_03/

 

 

 

Discuss. 

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Pintend

I will use that link from now on as a response to people who believe bp.tf is SOLELY repsosnible for rising key prices.

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Chief D

Pinned. Great analysis. I can't say I understood it all because I only took Gen Economics like 2 years ago, but I get the basic counterarguments to the people complaining on every key suggestion.

 

Prepare your website for more traffic.

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Baloo


'Demand and Supply

Money Supply is totally different from Supply.

Definition of Supply: The quantity of goods or services that producers are willing to sell different prices, over a certain period of time.

If you want to derive supply, ask each and every participant these questions:

At the price of 2.33 Refined, what’s the maximum quantity you are willing and able to sell right now?

“If I had 10 Keys right now I would sell them all at 2.33†is not a valid answer, because you are not “able†if you don’t own 10 Keys. Hypothetical situation means nothing.'

 

Definition of Supply: The quantity of goods or services that producers are willing to sell different prices, over a certain period of time.

 

Should be: "Definition of Supply: The quantity of goods or services that producers are willing and able to sell different prices, over a certain period of time."

 

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MC22

I seldom make lengthy comments on suggestions, nor express my views openly on this topic in the old forums. 

 

but I feel like I have to say something after the guys on Reddit proposed so many arguments. 

 

So here is my response

 

http://tf2finance.com/2013_03/

 

 

 

Discuss. 

Read the entire thing

TFreakconomics

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Teeird

That blew me my mind, in a good way. Keep up the good work Base64.

 

To those saying "tl;dr". A huge subject like this (semi quote from Boromir) cannot simply be shortened and/or minimized.

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buddhapest

base64: any chance you could get Brad to give you the bp.tf unique visitors number data and overlay that on some of your graphs.  alexa is shite, but based on what i see there, backpack.tf almost tripled their unique visits around the time the never ending key price ramp started.  i think it's another important data point to consider before dismissing the feedback loop completely.

 

http://www.alexa.com/siteinfo/backpack.tf (click on traffic stats)

 

btw, good analyses, tho i haven't fully digested it yet.

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Uranium235

Backpack.tf and tf2finance have ruined the TF2 economy by not dictating low prices, but reporting actual market conditions. I want the days where only the spreadsheet knew what was good for the economy back too. [/sarcasm]

 

Other than that, I don't agree with the "dramatic effect" of idle accounts (for which a plausible explanation is still missing).

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Aerolite

Hey all,

 

I realize that making my first post on such a controversial issue (especially considering my views) is risky, however I truly believe there is a significant issue here that needs to be discussed. I am not looking to start a flame war, but rather a discussion for the purposes of either my convincing you all there is in fact an issue, or for you all to convince me that I'm wrong (yes, I am open to that possibility).

 

_____________________________________________________________________

 

Base64's article

I'd like to start by saying that I have read Base64's article on the inflation issue (http://tf2finance.com/2013_03/), and I agree on most of what he's pointed out. He's certainly done his homework. I believe, however, that 1 or 2 of his arguments are flawed, and this is what I would like to discuss, with regard to Backpack.tf.

 

Why I think he's wrong

In referencing the Outpost vs. Backpack.tf argument, he makes a number of assumptions about traders that I know from experience simply aren't true.
 

Issue 1) Firstly, he states: "Why would anyone buy at 2.88 if there are people selling at 2.77?".

Well, there ARE in fact reasons for this to occur.

The first example of this is obvious: Idlers. Traders who come in with hundreds of ref usually don't bother to find keys at the correct price - they see the first person selling keys in their search results with stock, and buy all they can. 9 times out of 10, the people with the most stock are the highballers, while the people with low to no stock are the people selling at the correct price! Obviously they want to mass-buy, so they pay the bit extra for the privilege. This isn't speculation on my part - I have literally watched this happen. Now Base64 covered Idlers in his article, so many of you will undoubtedly think this isn't an issue, but it comes back to Backpack.tf's involvement which I will address later in this post.
Other than idlers, there are also people who deliberately set out to manipulate prices. I've seen people in trade servers discussing and organizing attempts at price manipulation, and it'd be foolish to think that such attempts haven't been made already.

Finally, in the minority, there are people who simply don't care what they pay for keys due to either having enough real-world currency for it not to be an issue, or need to buy a key quickly to add to an in-progress trade.

 

That said, to ignore the possibility of people overpaying for keys simply because there are others selling cheaper is, oddly enough, unrealistic in terms of how and why people buy.

 

Issue 2) Next, Base64 states: "Not able to find at lower price does not imply that buyers will shift the entire Demand curve to accommodate the sellers."

Well the short answer is yes, it does. The biggest issue I have with the comments on the key-price suggestions is that people are constantly saying "If you want the price to stop rising, stop buying keys at this price!" - this is the pinnacle of stupidity and all it really does is show how ignorant some traders really are.

Aside from my reasons above in issue 1, which also fall under this category, there is an entire segment of players that appear to go largely unvoiced. The simple fact is, there is a large number of players out there who are NOT F2P, but refuse to spend MONEY on keys. These people are not idlers, but rather players who rely solely on NORMAL accumulation of drops which they craft into metal to buy keys, often with the intent on unboxing for Strange weapons or Unusuals. These players are usually casual traders only, who don't invest the time in the economy to be anything more than that. Given this fact, when these players go looking for keys, they have no choice but to pay the vastly inflated prices that Backpack.tf lists, or they can't attain them. This is the ONLY way these players can attain keys, so saying that "If you want the price to stop rising, stop buying keys at this price!" means absolutely nothing, as paying with metal is the only option for them. No one is going to just stop buying keys because the ref price is high - keys, aside from being a currency item, actually serve a purpose in Unboxing.

 

In saying all that, the straight fact is that these casual traders will always pay whatever the price is in ref for keys, because it is the only way for them to attain them. That has the side-effect of putting key sellers in the position to directly control the key price, again with the aid of Backpack.tf (more on that, next).

 

 

Backpack.tf's involvement

The crux of this whole issue, and what makes the above points have all their merit is how Backpack.tf is reporting the prices, and how it operates as a whole. I often see people commenting on key suggestions with "Backpack.tf only reports the price, it doesn't influence it." - I think that's an oxymoron, quite frankly. The simple fact is, Backpack.tf is now so in-grained, so fundamentally tied in to how the TF2 economy functions, that its reporting of prices is providing absolute control over the market. Let me explain.

When I unbox an item, be it a hat, Strange, whatever, that I wish to sell, where is the first place I go? Backpack.tf. If I receive an offer on one of my Outpost trades, where is the first place I go to check its validity? Backpack.tf. When I want to buy a particular item, or know if I have enough currency for a particular item, where is the first place I go? Backpack.tf. The list goes on. I openly make the assumption that the majority of TF2 traders, especially those on Outpost, follow that EXACT same process. Backpack.tf sets constraints on the accepted prices for every tradable item in the game, which, while are the result of attempts to only report the price the items are actually selling for, actually controls the way items move through the market. To say anything else about it is just plain wrong. It's the simple fact that information influences our decisions. This can be explained using any number of metaphors - Are you more or less likely to take a drug if you're told there's a risk of it killing you on the spot (even if there is NO risk)? Are you more or less likely to ask the chick at the bar for a dance if you're told that she's already into you? Here's the key one - are you more or less likely to buy a product or service at a given price if you're told that it's priced differently somewhere else? Information is power, and since Backpack.tf provides all the information, it has all the power.

 

In case you're not already convinced, answer me this: If Backpack.tf arbitrarily raised the key price to say 6 ref and locked it, do you or do you not think that every Outpost trader who's selling keys would instantly up their selling prices to that 6 ref? Of course they would, because it's instant profit for them, and guess what? Keys would still be bought. Oh sure, there'd be one hell of an uproar, but all the idlers and casual traders that I've mentioned above would still buy the keys, because that would be the only price at which to get them.

 

The argument that Backpack.tf only reports prices is fundamentally flawed, and that is the absolute key reason why the Outpost vs. Backpack.tf argument is, in my opinion, completely and utterly true. Keys will, without a doubt, always move at the price Backpack.tf lists them as, and by increasing it by a scrap every week to coincide with sellers' highballing, the site is fundamentally controlling the movement of keys through the market.

 

Now, given this fact, I was shocked recently to learn that many key price suggestions with negative scores are getting accepted by the Admins! When I first found out about Backpack.tf, I was extremely hesitant to use the service. I remained with Spreadsheet until I learned of the owner's misconduct, but the only way I could justify, to myself and several buddies of mine, the use of Backpack.tf as an alternative was because it allowed the community to vote on suggestions as a way of keeping them, and as a result the prices as a whole, in check. If this system is not being respected, then Backpack.tf, in my opinion, has absolutely no right to be altering its listed prices as the result of suggestions that, given what I've just said, CANNOT be contested.

I don't pretend to know the motives of the Admins that are accepting negatively scored suggestions. If it is in an attempt to continue on the ideal that Backpack.tf only reports the prices, and doesn't influence them (which is the most likely motive), then it would stand to reason that these Admins need to do a serious reassessment on the nature of this website and the level of economic control it appears to have. Regardless of their motives, they are actively going against the majority vote, which by definition is exerting a form control over it, given the position of power the website and its Admins are in.

 

I've been told the main reason for this is that the Admins no longer see downvotes on these suggestions as anything more than people whining and wanting the price to drop. What does that say to everyone? It says that the vast majority is unhappy with the price of keys, and is doing the only thing they can feasibly do to solve the issue. And that is a core problem - there is no way for the majority of the TF2 traders to exert their community right in price moderation OTHER THAN VOTING ON PRICE SUGGESTIONS ON BACKPACK.TF. If the admins are disrespecting and/or ignoring community input into the prices, then that in essence is a form of price manipulation. The key (no pun intended) thing to understand in this regard is that we don't buy keys at 4.22 ref (at the time of this posting) because we want to, we do it because at the moment, we're forced to. We as a community need to have the ability to give our input on price suggestions WITHOUT the risk of being ignored by an Admin who thinks our opinions either don't matter, or that his/hers are somehow superior.

 

I would like to point out that I am not trying to be insulting/slanderous here, and would actually like some input from the Admins regarding this post.

 

 

Regarding TF2Finance.com

I often see references to TF2Finance.com regarding the "actual" price of keys. I'd like to remind you all of the process I mentioned above with regard to my own usage of Backpack.tf for item pricing. Given that Backpack.tf is so in-grained into our trading habbits, it is thus reasonable to say that TF2Finance.com's pricing of items is DIRECTLY INFLUENCED by Backpack.tf's price.

It is not Backpack.tf that reports the "actual" price of items - it is TF2Finance.com that reports the prices, which are the DIRECT RESULT of the listed price on Backpack.tf.

 

_____________________________________________________________________

 

I think that's all I wanted to say. As I previously requested, please no flame wars here. I would like for what I've put forward here to be discussed, so that we may find a consensus regarding this issue and actually try and work together to solve it. If what I've stated here is even remotely true, it is possible that there may be no limit to the inflation of the price of keys.

 

Thanks for reading,

Aero

 

 

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Stormy Outerland

What if we just didn't list the price of keys, but the price of everything else.

That way it could still act as a currency without the effect of the site itself.

People wanna pay 2 keys for a S. Flaregun? That's fine, no matter what the price of the actual key goes for.

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Stormy Outerland

We're forced to buy @ 4.22

That is all I needed to read.

And that is why I consider keys 4.33

You consider keys at 4.33?

I better sell at 4.44

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Chief D

First of all, I want to address this: 

 

We as a community need to have the ability to give our input on price suggestions WITHOUT the risk of being ignored by an Admin who thinks our opinions either don't matter, or that his/hers are somehow superior.

 

You have the ability to comment and give input on the comment section in every suggestion. I've, more than one time, accepted being wrong on something. We admins don't think our opinions are better than yours. Most of the people that complain on key suggestions try to say what you are saying, but they end up babbling nonsense so we ignore them. 

 

Now, voting. If prices would be set solely by votes, there would be no need for admins. I remember voting was basically the most important thing on suggestions before, but it all changed with, I believe, the BMOC. People started trying to manipulate the BMOC's price and voting became pretty much useless. The BMOC was being traded for, let's say, 14 keys. Someone suggested 14 keys and people downvoted because "they didn't want the price to be 14 keys". Too bad, the price WAS actually 14 keys. Same happens with keys, people WANT the price to drop, but if we stopped updating the price to what the market dictates, or if we accepted a 4 ref suggestion because it has 5000 votes and everyone wants the keys to be 4 ref, then, as you're saying that backpack.tf has a huge impact on trading, wouldn't we be manipulating the price of keys?

 

Voting now is used to "reward" the users via contribution points. Only in key suggestions do people vote for what they want the prices to be and not what the price actually is. If you vote for a wrong price, you would be trying to manipulate the price, so you get -rep.

 

About tf2finance: The BEST thing to do would be to make the key prices auto-sync with tf2finance. However, many people don't trust it, so it can't be done.

 

 

This has been being repeated all over this threads, but honestly yours seems the best one until now so I'm replying and not just closing it.

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☣Long218☢

First of all, I want to address this: 

 

 

You have the ability to comment and give input on the comment section in every suggestion. I've, more than one time, accepted being wrong on something. We admins don't think our opinions are better than yours. Most of the people that complain on key suggestions try to say what you are saying, but they end up babbling nonsense so we ignore them. 

 

Now, voting. If prices would be set solely by votes, there would be no need for admins. I remember voting was basically the most important thing on suggestions before, but it all changed with, I believe, the BMOC. People started trying to manipulate the BMOC's price and voting became pretty much useless. The BMOC was being traded for, let's say, 14 keys. Someone suggested 14 keys and people downvoted because "they didn't want the price to be 14 keys". Too bad, the price WAS actually 14 keys. Same happens with keys, people WANT the price to drop, but if we stopped updating the price to what the market dictates, or if we accepted a 4 ref suggestion because it has 5000 votes and everyone wants the keys to be 4 ref, then, as you're saying that backpack.tf has a huge impact on trading, wouldn't we be manipulating the price of keys?

 

Voting now is used to "reward" the users via contribution points. Only in key suggestions do people vote for what they want the prices to be and not what the price actually is. If you vote for a wrong price, you would be trying to manipulate the price, so you get -rep.

 

About tf2finance: The BEST thing to do would be to make the key prices auto-sync with tf2finance. However, many people don't trust it, so it can't be done.

 

 

This has been being repeated all over this threads, but honestly yours seems the best one until now so I'm replying and not just closing it.

http://backpack.tf/vote/id/50d65223ba2536c76900001a it is true that vote are often biased and manipulating. My very first suggestion is a good example.

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Hand slapper

I use backpack.tf as a point of reference for prices, and understand that the suggested value may not reflect what I observe on tf2outpost. Also backpack.tf doesn't set constraints: I don't need bp.tf's permission to buy lower or sell higher than the current suggested value, and if I have difficulty doing this consistently then chances are the backpack.tf suggested price is fairly spot on. Plus backpack.tf only has complete power over people who choose not to make their own judgement on what to buy/sell an item for, and I doubt this applies very often to experienced traders.

Now if backpack.tf had "absolute control over the market" then why do prices change at all? Who has something to gain? The mods? In my experience they strive to be as unbiased as possible.

And now for my favourite part:
"Regardless of their motives, they are actively going against the majority vote, which by definition is exerting a form (of) control over it, given the position of power the website and its Admins are in."

I'm trying to imagine a universe where you need 50%+ to get a suggestion accepted, and anything below that automatically gets rejected by a mod. It's a terrible vision, and if anyone was around when % of votes were viewable while a suggestion was open you'd know that mob mentality isn't always right. I think the casual voter is more likely to be biased for prices that benefit them or to 'save the economy' as some may think. I would bet that most of those downvotes on accepted key suggestions are people who want keys to not increase, but don't actually care what the average key-metal exchange is.

Also I'm tired of people saying backpack.tf influences market. It's the "tail wagging the dog" argument that doesn't fly with me.

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base64

Hey all,

 

People feel angry once they read

"Why would anyone buy at 2.88 if there are people selling at 2.77?".

 

I have edited the original article to include that the "market clearing price" in that situation is 2.77

 

As price checker/guide, we aim to report the "market clearing price" that would result in minimal excess demand or excess supply. 

 

"while the people with low to no stock are the people selling at the correct price"

Then I'm sorry that is the exact justification for an upward force in price. 

 

"Well the short answer is yes, it does."

Demand: The quantity of goods or services that buyers are willing and able to buy at  different prices, over a certain period of time. 

 

If they "can" buy at higher prices, that means they are willing and able to buy. There is no shift in Demand. 

 

What you are implying is whenever there is a "Shortage" or "Excess Demand" for an item, the entire Demand curve shifts to accommodate it. 

 

"no choice but to pay the vastly inflated prices"

 

Then I'm sorry you are implying that Demand curve is perfectly inelastic (vertical), and price is only determined by Supply, hence new price is justified. 

 

But then, you have to show that Demand for Keys is not downward sloping, i.e. ask the traders "would you buy more Keys now if it's cheaper. "

 

I'm going to repeat this word again, Justification

 

"No one is going to just stop buying keys because the ref price is high"

 

No one is going to stop, but the quantity demanded lowers as price increases, since you claim that ordinary players have fixed income on ref

 

---------

 

 

Anyway I accept your argument about me disregarding Price dispersion in the statement "Why would anyone buy at 2.88 if there are people selling at 2.77?" and CHANGED IT to "Why would the majority of people buy at 2.88 if there are people selling at 2.77, AND people think that 2.77 should be the "true price" that shall be reported?"

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Stormy Outerland
Posted · Hidden by Chief D, March 24, 2013 - Pointless post
Hidden by Chief D, March 24, 2013 - Pointless post

I can use large words such as TAXIDERMY and ANTIDISESTABLISHMENTARIANISM, both while using ITALICS and UNDERLINING,

so my opinion MUST be correct

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lukecandy
Posted · Hidden by Chief D, March 24, 2013 - Pointless post.
Hidden by Chief D, March 24, 2013 - Pointless post.

Everyone is writing heaps.

 

CBF reading it all.

 

I think that keys are too expensive.

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✔ P I X E L A T E D ✔
Posted · Hidden by Chief D, March 24, 2013 - Pointless post.
Hidden by Chief D, March 24, 2013 - Pointless post.

tl:dr

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Aerolite

I'd just like to say thanks for the responses, guys. This sort of discussion was what I'd hoped for. :)

Now, I'd like to address some of what's been said.

 

____________________________________________________

 

 

What if we just didn't list the price of keys, but the price of everything else.

That way it could still act as a currency without the effect of the site itself.

People wanna pay 2 keys for a S. Flaregun? That's fine, no matter what the price of the actual key goes for.

While I actually think that could possibly give a positive result, I think it defeats the purpose of the website. Backpack.tf exists as a guide for pricing, the only issue with comes from the fact that it's an open system that is currently being misused.

 

First of all, I want to address this: 

 

 

You have the ability to comment and give input on the comment section in every suggestion. I've, more than one time, accepted being wrong on something. We admins don't think our opinions are better than yours. Most of the people that complain on key suggestions try to say what you are saying, but they end up babbling nonsense so we ignore them. 

 

Now, voting. If prices would be set solely by votes, there would be no need for admins. I remember voting was basically the most important thing on suggestions before, but it all changed with, I believe, the BMOC. People started trying to manipulate the BMOC's price and voting became pretty much useless. The BMOC was being traded for, let's say, 14 keys. Someone suggested 14 keys and people downvoted because "they didn't want the price to be 14 keys". Too bad, the price WAS actually 14 keys. Same happens with keys, people WANT the price to drop, but if we stopped updating the price to what the market dictates, or if we accepted a 4 ref suggestion because it has 5000 votes and everyone wants the keys to be 4 ref, then, as you're saying that backpack.tf has a huge impact on trading, wouldn't we be manipulating the price of keys?

 

Voting now is used to "reward" the users via contribution points. Only in key suggestions do people vote for what they want the prices to be and not what the price actually is. If you vote for a wrong price, you would be trying to manipulate the price, so you get -rep.

 

About tf2finance: The BEST thing to do would be to make the key prices auto-sync with tf2finance. However, many people don't trust it, so it can't be done.

 

 

This has been being repeated all over this threads, but honestly yours seems the best one until now so I'm replying and not just closing it.

Oh I definitely don't think voting should exclusively decide the prices of items - that would definitely allow for price manipulation on a large scale, and that is unacceptable. A careful mix of voting + Admin input is required, as you alluded to  before this BMOC issue (which I actually wasn't aware of). The thing is, if you're going to allow one side of community input (suggestions), then in order for the system to truly work, you need to be willing to accept the other side (votes).

 

I accept there is an issue in that people will undoubtedly place meaningless votes or attempt to manipulate prices, but that is always an issue in an open system. It is an issue I'm sure was anticipated during the site's initial planning, and I would assume the solution was chalked up to be the Admins moderating the suggestions. That said, you guys can't start ignoring a whole segment of community input because of a couple of instances of it's abuse. Backpack.tf, as an open system, can ONLY work if both suggestions AND community votes are taken into account - you simply can't have one without the other, its either both or neither (aka a closes system, such as Spreadsheet). Anything in between and you're tipping the scales in the market toward a certain direction, as opposed to leveling things out.

 

As for the idea of a 4 ref suggestion manipulating the price, well the short answer is yes, it would be. That said, however, if it is to be believed that Backpack.tf is actually (unwittingly as it may be) controlling the market, it is already manipulating the price of keys, but it is currently doing so in a way that is consistently against the community view that the price should be lower. Given how deeply situated Backpack.tf is in the TF2 market, it is impossible NOT to influence/control it. The responsibility of the site thus becomes that of honoring the community's majority view, obviously with some form of moderation to weed out the twats who would abuse the privilege of an open system.

Now, with regards to the voting serving as a reward to users - sure, I get that, that's cool. But the fact that you automatically assume that because someone votes against a price they are guilty of trying to manipulate it is extremely disturbing to me, and sets a terrible precedent for community input. By doing this, you are actively punishing users for providing their input in an open system. What is the point? If you're going to punish those who vote against a price suggestion, then Backpack.tf is about as far from democratic as it gets!

 

While the idea of syncing with TF2Finance.com is attractive to some, the simple fact is we'd have the same problem. People would see the Backpack.tf price, increase by a scrap for profit, and over time the site would detect the trades and up the price. It's just an automated version of the problem we're already facing, with the added risk that people could manipulate the system externally.

I actually think freezing the key price for a short, non-publicly decided time, would be the best idea. This would allow everyone to clearly see whether or not Backpack.tf really does control the market. Note that the I said the time frame should be non-public, so as to prevent people from "taking over" the inflation of keys themselves in anticipation of the unfreeze, if that makes sense? I don't expect this to happen any time soon, if at all, but that would be my personal suggestion.

 

Also, please don't close the thread (unless it devolves into a flame war, of course). I really feel like this needs to be properly discussed. :S

 

I use backpack.tf as a point of reference for prices, and understand that the suggested value may not reflect what I observe on tf2outpost. Also backpack.tf doesn't set constraints: I don't need bp.tf's permission to buy lower or sell higher than the current suggested value, and if I have difficulty doing this consistently then chances are the backpack.tf suggested price is fairly spot on. Plus backpack.tf only has complete power over people who choose not to make their own judgement on what to buy/sell an item for, and I doubt this applies very often to experienced traders.

Now if backpack.tf had "absolute control over the market" then why do prices change at all? Who has something to gain? The mods? In my experience they strive to be as unbiased as possible.

And now for my favourite part:
"Regardless of their motives, they are actively going against the majority vote, which by definition is exerting a form (of) control over it, given the position of power the website and its Admins are in."

I'm trying to imagine a universe where you need 50%+ to get a suggestion accepted, and anything below that automatically gets rejected by a mod. It's a terrible vision, and if anyone was around when % of votes were viewable while a suggestion was open you'd know that mob mentality isn't always right. I think the casual voter is more likely to be biased for prices that benefit them or to 'save the economy' as some may think. I would bet that most of those downvotes on accepted key suggestions are people who want keys to not increase, but don't actually care what the average key-metal exchange is.

Also I'm tired of people saying backpack.tf influences market. It's the "tail wagging the dog" argument that doesn't fly with me.

I see what you're trying to say here, but you need to look at it from another angle.

Yes, it's true you don't need Backpack.tf's permission to trade at your own prices, but the fact that you have difficulty doing so isn't necessarily the result of Backpack.tf's prices being correct, it is much more likely that it is the result of the vast majority of traders using Backpack.tf as a trading bible, and as a result, if you're not in its price range, you're either high or low-balling. Irrespective of how you elect to set prices yourself, the issue is that the people who are most likely to trade with you are going to be using Backpack.tf as their reference, meaning that in order for you to make a successful trade, you need to conform to what your trading partner deems far, which is by extension, Backpack.tf's prices. Even if they themselves don't conform to those prices, they'll be thinking of that in terms of resale value of the items, as chances are THEY will end up trading with someone else to whom Backpack.tf is a bible. It thus becomes apparent that on some level, Backpack.tf influences the outcome of every trade, without fail.

 

In answer to your next question, traders have something to gain. Prices change because sellers want more and more profit, or because buyers lose interest in particular items and thus pay less for them. Supply and demand naturally comes into it, here. The problem is that with a currency item such as keys, that also serve as the only means besides trading to acquire Unusual hats, people will never lose interest. No matter what the price, someone will always want to buy a key with metal, and they always will. The price won't drop, because being such an influential item, people will never stop buying keys no matter their price. It is for this reason that Backpack.tf is central to the key inflation.

 

As I said above, there is always going to be a bunch of twats who are biased and want to manipulate prices of items. That is why we have Admins to moderate the suggestions, but this system can only work if they take the whole picture into account.

 

People feel angry once they read

"Why would anyone buy at 2.88 if there are people selling at 2.77?".

 

I have edited the original article to include that the "market clearing price" in that situation is 2.77

 

As price checker/guide, we aim to report the "market clearing price" that would result in minimal excess demand or excess supply. 

 

"while the people with low to no stock are the people selling at the correct price"

Then I'm sorry that is the exact justification for an upward force in price. 

 

"Well the short answer is yes, it does."

Demand: The quantity of goods or services that buyers are willing and able to buy at  different prices, over a certain period of time. 

 

If they "can" buy at higher prices, that means they are willing and able to buy. There is no shift in Demand. 

 

What you are implying is whenever there is a "Shortage" or "Excess Demand" for an item, the entire Demand curve shifts to accommodate it. 

 

"no choice but to pay the vastly inflated prices"

 

Then I'm sorry you are implying that Demand curve is perfectly inelastic (vertical), and price is only determined by Supply, hence new price is justified. 

 

But then, you have to show that Demand for Keys is not downward sloping, i.e. ask the traders "would you buy more Keys now if it's cheaper. "

 

I'm going to repeat this word again, Justification

 

"No one is going to just stop buying keys because the ref price is high"

 

No one is going to stop, but the quantity demanded lowers as price increases, since you claim that ordinary players have fixed income on ref

 

---------

 

 

Anyway I accept your argument about me disregarding Price dispersion in the statement "Why would anyone buy at 2.88 if there are people selling at 2.77?" and CHANGED IT to "Why would the majority of people buy at 2.88 if there are people selling at 2.77, AND people think that 2.77 should be the "true price" that shall be reported?"

Didn't expect to see you here, Base! Good to have your input though, considering you were the one to put that article together. :)

 

I don't think its fair to say that that is a justification for the inflation. People are always going to buy the cheapest items they can find, and this is especially true here, given that it's commonly expected that keys are going to remain on the rise. Of course people are going to buy out the sellers selling cheaper, because at this point everyone knows all they have to do is wait a couple of weeks and they can sell for a huge profit. Not only that, but due to how frequently the keys jump in price, there is often no chance for most sellers to restock before a price increase, meaning that by the time they do, they then have to raise their price in order to match the Backpack.tf listing. If they don't, then they end up losing out because they won't make as much profit as everyone else.

 

While I am aware of the definition of demand, I will again have to disagree with you. The truth of the matter is people will always be willing to, as well as always be able to (eventually, at least) buy keys. In a game such as TF2, while ever there are unlimited free drops that can be converted into currency, people are going to convert it into currency. With keys, there is the added allure of Unboxing, meaning yet another reason people will always buy keys, no matter the price. We are not going to hit some magic price where everyone just says "Right, I'm out!" - that will never ever happen here, unless Valve were to start selling metal in the Mann Co Store, possibly leading to a static correlation between the price of keys and metal. Note I said possible, not definite. Now given that Valve isn't likely to start selling metal in the store, it would appear that there is no upper limit to the price of keys. Even if it were to hit a price where it was infeasible for the average player to buy keys with metal (which is a very disturbing concept, mind you), there are enough metal farmers now that the price would almost certainly escalate far beyond that limit. Bye bye economy.

 

But lets take a minute to assume you are correct. The price is accurate despite overwhelming opposition from the community, and we reach a point where demand is low enough to actually stop the inflation. How do you see the state of the economy at that time? The situation will be that idlers are the only ones that can feasibly buy metal in a timely manner, and it takes months and months for the average player to save up enough metal to purchase a single key, but the price doesn't actually drop because a large number of players can still afford them. The price of Strange Weapons and Unusuals will likely increase due to the increased difficulty in attaining keys, which would in turn make it harder and harder for average players to attain those items. We well end up with an economy where it is absolutely the rich remaining rich, and the poor being unable to get anywhere.

 

That sounds pretty damn bleak to me.

 

If there is even the slightest possibility that Backpack.tf is influencing pricing (which as I've shown, I believe there is, and not just with keys), then given that it has already altered the state of affairs, it stands to reason that it's Backpack.tf's responsibility as part of the community to prevent a shift in the economy which would, for all intents and purposes, ruin the market for the largest majority of players.

 

Am I wrong?

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