WoW AH's prisoner's dilema - background

This post is part dealing with 4.3 recipees, and in part a response to recent comments.  I am also largely talking supply of product (manufacturers); not demand side (customers).  It is also background reading for later posts.

As technical background reading; it is worth looking at the Prisoner's dilema; taking note that the glyph market is traditionally iterated and multiplayer, with no fixed end. The TL;DR version is that the collective wins from co-operation but the individual wins from defection.


Some players advocate continuous 'defection' (Gevlon, Critical). Some players advocate 'cooperation' (Breevok, Brent #2). I prefer mild co-operation; I make more gold.


For me there are several stages to a market. At the top of the list it is worst for consumers and best for producers.  At the bottom of the list, it is the the other way around.

• Monopoly : Someone is the first to get the new pattern.  Their only boundaries for gold making is raw material and what price the market will pay.  
• Duopoly : A second player will also get the pattern, traditionally more raw material becomes available.  Prices are still very high, but competition starts.
• Multi player co-operative
• Multi player competitive
• Every player competitive. Think vendor taught levelling recipees.

At some stage most patterns decend into 'Every player competitive'; Whether that is literally every player with the vendor compulsory levelling recipee; or whether it is an optional recipee that 20 or 30 end up getting; there is still no gold to be made here. After an expansion when content becomes non-current; unless it is literally vendor taught and required, even these patterns go back up the value chain. 

Multi player competitive: These patterns are gained by enough active players to compete against each other, and they do so.  The harder any individual competes, the greater % of the total sales they get, but the smaller the total value of those sales.  This is great for consumers.

Multi player co-operative.  These patterns are gained by a few players, but there is no-one dominating the market.  Players voluntarily choose a smaller % of total sales, but in turn, the total value of those sales can be mainated much higher.

Duopoly : A couple of players have the pattern; The original player bemoans the entry of the newer player, but has no real choice.  Prices still remain high, but an amount of under cutting almost always happens.  Neither player will particularly want to entirely crash the market as there are still huge profits to be made of a relativly small number of sales.

Monopoly : The only issues you have here are how many can you make; and how to maximise your profits before your monopoly is broken into a Duopoly or worse.  You are considering your demand at different prices (lower prices gets more customers).