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Cooperation between rival traders = much more profit

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Kaylee Juuna	Posted - 2009.12.21 01:31:00 - [1] Edited by: Kaylee Juuna on 21/12/2009 01:34:38 Of course, this is assuming every trader with a buy order of the module is active (at least an hour or two a day). Person A buys for 25 isk Person B buys for 75 isk Person C goes to 150 Person A goes to 225, etc. After they've gone from 25 isk to 2,500 isk, every one of their profits is a lot lower. Why not get everyone in communication with each other (don't ask me how) and agree to go back down to 25 isk (or the lowest non-active buy order), then 0.01 each other from there? Yeah, we are all rivals, but in the end all we're doing is taking advantage of stupid and lazy people. Other than the other traders being idiots, why wouldn't this work?
Frenden Dax Dax Acquisitions	Posted - 2009.12.21 01:35:00 - [2] I would rather drive my rivals out of the market and claim 100% of the profits than share with them. Plus there's no way to form cartels like that. Someone not in the group will come by, see an opportunity, and act.
Kaylee Juuna	Posted - 2009.12.21 01:37:00 - [3] Edited by: Kaylee Juuna on 21/12/2009 01:38:17 Originally by: Frenden Dax I would rather drive my rivals out of the market and claim 100% of the profits than share with them. Plus there's no way to form cartels like that. Someone not in the group will come by, see an opportunity, and act. The second part is a good point. Greedy bastards. But the first part... what happens when you find a trader stubborn as you are?
SetrakDark Caldari DarkCorp Technology and Finance	Posted - 2009.12.21 01:38:00 - [4] 1) Cost of communication/organization 2) Cost (or even ability in the case of Eve) of enforcing the cartel. Persons a,b,c agree to some rule for selling at 25. Person d sells everything at 24, and laughs his balls off at a,b and c in their useless little cartel attempt.
Kaylee Juuna	Posted - 2009.12.21 01:50:00 - [5] Edited by: Kaylee Juuna on 21/12/2009 01:51:16 Originally by: SetrakDark 1) Cost of communication/organization 2) Cost (or even ability in the case of Eve) of enforcing the cartel. Persons a,b,c agree to some rule for selling at 25. Person d sells everything at 24, and laughs his balls off at a,b and c in their useless little cartel attempt. I'm not saying change the buy orders to 25 and keep them, just reset them to 25 "then .01 each other from there". I don't see how there could be a cost of communication, and there is no 'enforcing' the cartel. The group goes down to the lowest non-agreeing buyer/seller. Whether that change is big enough to be worthwhile is up to the traders, of course.
SetrakDark Caldari DarkCorp Technology and Finance	Posted - 2009.12.21 02:08:00 - [6] Ok, we agree to reset our prices to 25 and then 0.01 isk each other from there. You reset to 25, I put mine at 24. I sell all my stuff, you sell nothing. I have nothing to gain from putting it to 25 (or 24.99) when I can put it lower and sell to all buyers. Furthermore, you know I'm thinking this, so you decide to screw me over 1st by setting to 23. However, I know that you know...so on and so forth until we both set competitive rates and 0.01 isk each other there instead. Even if we both maintain our cartel, anyone can come by and sell for 1 isk less than we do. Then we try and bring him in, maybe it works, maybe not. However, there is always someone who will notice an artificially high price, come in, and sell for an isk less, and eventually someone will not join, someone will break the deal or the cartel will have so many people that the price will drop due to all the 0.01 isking from the cartel members.
Kaylee Juuna	Posted - 2009.12.21 02:16:00 - [7] Originally by: SetrakDark Ok, we agree to reset our prices to 25 and then 0.01 isk each other from there. You reset to 25, I put mine at 24. I sell all my stuff, you sell nothing. I have nothing to gain from putting it to 25 (or 24.99) when I can put it lower and sell to all buyers. Furthermore, you know I'm thinking this, so you decide to screw me over 1st by setting to 23. However, I know that you know...so on and so forth until we both set competitive rates and 0.01 isk each other there instead. Even if we both maintain our cartel, anyone can come by and sell for 1 isk less than we do. Then we try and bring him in, maybe it works, maybe not. However, there is always someone who will notice an artificially high price, come in, and sell for an isk less, and eventually someone will not join, someone will break the deal or the cartel will have so many people that the price will drop due to all the 0.01 isking from the cartel members. I'm not a heavily-trafficked region trader, and it obviously wouldn't work in, say, Jita. But if it's just 3 or 4 traders, it could easily be done. I mean, assuming the other people aren't morons. I take my whole idea back, the ratio of idiots:non-idiots is far too great to overcome.
SetrakDark Caldari DarkCorp Technology and Finance	Posted - 2009.12.21 02:24:00 - [8] You're right. An "out of the way" eve market represents in many ways "barriers to entry", so the force of outside intervention is lessened, especially if you do not inflate the price too high. Then, if it is a small number of competitors you may be able to overcome the mistrust and desire to undercut. However, the benefit of doing so may not be worth the effort of organizing. Loooooong story short, cartels are totally possible and many exist, but there are strong naturally-occurring economic forces working against them.
Commander Godsmack	Posted - 2009.12.21 02:30:00 - [9] In theory that sounds interesting however sharing the market with other traders just slashes the amount of my market orders that will processed so in reality while the turnover may be higher you'd just end up making less money as your sharing what you could be controlling with other people not to mention your orders stagnating when you cant tend to them every 5 minutes because its no big deal for others to outbid/undercut your orders by .01 isk
SetrakDark Caldari DarkCorp Technology and Finance	Posted - 2009.12.21 02:34:00 - [10] Originally by: Commander Godsmack In theory that sounds interesting however sharing the market with other traders just slashes the amount of my market orders that will processed so in reality while the turnover may be higher you'd just end up making less money as your sharing what you could be controlling with other people It could go either way. It depends on the ratio of price increase to quantity decrease.
cosmoray Bella Vista Holdings Corp	Posted - 2009.12.21 02:38:00 - [11] Only cartels that ever worked were when the T2 BPO owners got together before invention. Now, why do you think invention was introduced?
Hoodat Bee	Posted - 2009.12.21 03:15:00 - [12] No product differentiation, no real barriers to entry in most t1/t2 goods, high number of market participants and negligible transaction costs. If, somehow, a cartel were to form, rampant cheating would occur due to the lack of an effective enforcement mechanism. So, obviously, a competitive market is the only logical event. That's all fact. This part is all opinion. Outlying regions might not be as competitive, but they're also not as important as the various hubs trade-wise. You're most likely better off exploiting high volume low margin goods at a hub than tying up a ton of capital in a low flow market -- especially in a post patch high volatility period. Of course, that depends on how much you value liquidity.
Dretzle Omega Caldari Caldari Navy Volunteer Task Force	Posted - 2009.12.21 03:15:00 - [13] Originally by: cosmoray Now, why do you think invention was introduced? Time sink, skill sink, more fair way of T2 production than lottery.... Oh, you meant to break up the cartels? I get it.
Commander Godsmack	Posted - 2009.12.21 03:32:00 - [14] Edited by: Commander Godsmack on 21/12/2009 03:33:49 Actually giving this another thought this might be stating the obvious but this would probably be something that could work but only in some circumstances -i.e certain items in certain areas you might be able to form a cartel but doing such would involve researching and monitoring an item for some time / get info on its trends + traders ect. Say you get it to work then new people start coming in to cash in the artificial price differences the cartel could just as if were 1 trader - price war the new competition until they give up/ could work having all cartel members partake together all their orders against the intruder (come to think of it there prob something going on with a few things I trade myself/ seeing half dozen orders match my outbids/undercuts that just would be stupid to follow ); or split the warring between the members taking turn to price war individually reducing stress across the board in general. By either method if the cartel can be fairly well solidified may actually benefit outside competition time to time(so long as they leave) when it comes to sell orders and they can be baited down sell stupid low and then cartel/cartel members buy up the cheap stock and resell as their own. But again something that would have to be investigated for each item you want to trade to see if it's viable since it cant work in every case; I wouldn't go saying traders not doing this are stupid.
SetrakDark Caldari DarkCorp Technology and Finance	Posted - 2009.12.21 03:44:00 - [15] Originally by: Commander Godsmack insightful conjecture lol welcome to the wonderful economic sub-field called industrial organization phds spend entire careers pondering this kind of stuff
Tamati Tama	Posted - 2009.12.21 03:58:00 - [16] I would only get into a pricing cartel like this if i play a lot more then the other members, or at least .01isk more dilligently. If you log on once a week cutting the margins to scare off competition is often the only way to get any profit at all. And due to that, anyone who would undercut by a large amount wont join.
Clementina Jericho Fraction The Star Fraction	Posted - 2009.12.21 04:34:00 - [17] This is new. Apparently the Original Poster wishes to form a buying cartel (To buy raw material for a certain (low) price). Usually when a poster starts a cartel thread, they want a selling cartel (To sell a finished product for a certain (high) price). The arguments against it are not new though, basically a person is rewarded for defecting by purchasing the raw material for a price greater than the cartel is offering, giving themselves access to the sum total of the amount of said material for little increased price above cartel pricing. It the defector has enough money they can buy an entire market's worth of said material, leaving the cartel able to buy nothing. Contrast with the usual selling stuff cartel where a defector can charge slightly less than the cartel and have access to all the isk the market is offering, and take all of the isk related to the market if they have sufficient industrial capacity. Although for Game Time Cards, people will start both buying and selling cartel threads
Ghoest	Posted - 2009.12.21 06:25:00 - [18] Do you think the OP feels dumb for posting this? Wherever you went - Here you are.
Clair Bear 24th Imperial Crusade	Posted - 2009.12.21 07:03:00 - [19] Originally by: Ghoest Do you think the OP feels dumb for posting this? No, but I feel a little dumber having read some of the replies. Besides, who cares about ISK? We're all out for each other's tears. I mean, after a few tens of B it's all just an abstract number. And in summary, bigger blobs are the answer. Now what was the question?
Barbicane TGUN Industries	Posted - 2009.12.21 08:33:00 - [20] Originally by: cosmoray Only cartels that ever worked were when the T2 BPO owners got together before invention. Nah, I tried several of those. They never worked for more than a couple of weeks at best before someone would use an alt to cash in on his surplus stock, or an outsider came in and ruined things. Except in the rare cases where demand >> supply, but then there was no need for a cartel and the cartel only existed in the minds of the consumers.
Vaerah Vahrokha Minmatar Brutor tribe	Posted - 2009.12.21 08:41:00 - [21] Quote: Besides, who cares about ISK? We're all out for each other's tears Not, really. Since RL denied me to do the job I loved the most (being an independent consultant with high esteem for his customers) I do that in EvE - Auditing and consulting Before asking for investors, please read http://tinyurl.com/n5ys4h and http://tinyurl.com/lrg4oz
Rolk Anderson	Posted - 2009.12.21 13:46:00 - [22] Edited by: Rolk Anderson on 21/12/2009 13:47:04 Edited by: Rolk Anderson on 21/12/2009 13:46:42 A and B price fix A screws over B and sells all his stock slightly lower but still making a massive profit A runs giggling into the mist B Loses his house, his wife leaves him. After turning to the local welsh mafia for a loan A is cought smuggling ******* though American customs B goes to jain B is abused by his fellow inmates and eventually hangs himself DONT BE B PRICE FIXER IT DOESNT WORK THIS COULD BE YOU!
Kaylee Juuna	Posted - 2009.12.21 15:18:00 - [23] Edited by: Kaylee Juuna on 21/12/2009 15:24:02 Originally by: Ghoest Do you think the OP feels dumb for posting this? No, do you feel dumb for posting that? Besides, why would I? Seems like the subject brought up a bit of discussion and debate.
Dretzle Omega Caldari Caldari Navy Volunteer Task Force	Posted - 2009.12.21 15:39:00 - [24] Originally by: Kaylee Juuna Edited by: Kaylee Juuna on 21/12/2009 15:24:02 Originally by: Ghoest Do you think the OP feels dumb for posting this? No, do you feel dumb for posting that? Besides, why would I? Seems like the subject brought up a bit of discussion and debate. All of this has happened before. All of this will happen again.
Kaylee Juuna	Posted - 2009.12.21 16:15:00 - [25] Originally by: Dretzle Omega Originally by: Kaylee Juuna Edited by: Kaylee Juuna on 21/12/2009 15:24:02 Originally by: Ghoest Do you think the OP feels dumb for posting this? No, do you feel dumb for posting that? Besides, why would I? Seems like the subject brought up a bit of discussion and debate. All of this has happened before. All of this will happen again. That's right, but why would I feel dumb for bringing up the subject again?
Dretzle Omega Caldari Caldari Navy Volunteer Task Force	Posted - 2009.12.21 16:36:00 - [26] Originally by: Kaylee Juuna That's right, but why would I feel dumb for bringing up the subject again? I didn't say you would. You might feel dumb about constantly defending how dumb you don't feel. But that's up to you.
Madame Bloviator	Posted - 2009.12.21 16:39:00 - [27] It doesn't sound like it works well for selling. But buying? I always wondered why more buyers didn't cooperate. If they take turns setting buy orders for the same price, they can share the market without .01 wars. The orders are filled in the order they were made if the price is the same. Never tried it before, but I thought about it while a competitor and I wasted lots of time and money fighting for ore buys.
Ghoest	Posted - 2009.12.21 16:40:00 - [28] Originally by: Kaylee Juuna Edited by: Kaylee Juuna on 21/12/2009 15:24:02 Originally by: Ghoest Do you think the OP feels dumb for posting this? No, do you feel dumb for posting that? Besides, why would I? Seems like the subject brought up a bit of discussion and debate. No you dumb twit you brought up the most obvious and probably oldest means of market manipulation. This is like going in this is like going into CAOD and suggesting that an alliance might be effective. The rest of the universe is alreay 5 steps ahead of you simpleton. Wherever you went - Here you are.
Kaylee Juuna	Posted - 2009.12.21 21:33:00 - [29] Edited by: Kaylee Juuna on 21/12/2009 21:35:32 Originally by: Ghoest Originally by: Kaylee Juuna Edited by: Kaylee Juuna on 21/12/2009 15:24:02 Originally by: Ghoest Do you think the OP feels dumb for posting this? No, do you feel dumb for posting that? Besides, why would I? Seems like the subject brought up a bit of discussion and debate. No you dumb twit you brought up the most obvious and probably oldest means of market manipulation. This is like going in this is like going into CAOD and suggesting that an alliance might be effective. The rest of the universe is alreay 5 steps ahead of you simpleton. What do you mean 'might' be effective? I didn't know idiots played EVE. Also, I wish I was as cool as you, being tough on the internet and all.
Dretzle Omega Caldari Caldari Navy Volunteer Task Force	Posted - 2009.12.21 21:35:00 - [30] Originally by: Kaylee Juuna Edited by: Kaylee Juuna on 21/12/2009 21:34:25 Originally by: Ghoest Originally by: Kaylee Juuna Edited by: Kaylee Juuna on 21/12/2009 15:24:02 Originally by: Ghoest Do you think the OP feels dumb for posting this? No, do you feel dumb for posting that? Besides, why would I? Seems like the subject brought up a bit of discussion and debate. No you dumb twit you brought up the most obvious and probably oldest means of market manipulation. This is like going in this is like going into CAOD and suggesting that an alliance might be effective. The rest of the universe is alreay 5 steps ahead of you simpleton. What do you mean 'might' be effective? I didn't know idiots played EVE. Now you know. Or maybe you don't?

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