Get rid of "first-land" concept

There has been ongoing discussion regarding profiteering from first land sales. The current system only benefit profiteers and a few lucky newbies.

The bottom line is: land pricing on SL follows the laws of supply and demand. Since first land is offered at below market prices, profiteers will ALWAYS find new ways to subvert or exploit the system, regardless of any artificial scheme in place to prevent it. User verification, sell restrictions, etc., are all irrelevant over time.

The only way to truly stop the "problem" is to get rid of the first land subsidy to begin with. That is to say, all new land including 512 m^2 lots should only be sold by auction, and available to everyone (not only first time land buyers.) An open auction is the only way land pricing can be transparent and fair to everyone.

The exact format and mechanics of such auction can be determined by Linden. For example, a Dutch auction could be used to sell all suitable 512 m^2 plots periodically. At auction close, the 512 m^2 plots are then assigned randomly to the winners.

-peekay

First Land needs more protection I agree, but auction isn't the way to go; in fact I think they'd do well to get rid of the auctions completely.

The problem with auctions is that they depend on the item being sold having variable or unknown value, but that doesn't really apply to SL land, because generally there'll be the few "land barons" who set the market value of land in SL to a known quantity. So in any given land auction all that happens is that one of the "barons" bids just below the resale value, and then anyone else who bids is either another baron trying for a loss leader, or a private individual getting a bad deal.

I don't quite follow. If as you say, a land baron sets a bid "just below" the resale value, then by definition the next bidder is paying the market price, and all is fine.

In fact, you've just demonstrated that the auction system is efficient, because a land baron cannot purchase land at a deep discount then quickly resell it.

Furthermore, auctions act as a limiter to direct land sale prices as well. Few will purchase land from a land baron, if the purchaser can buy similar land at auction for a lower price.

The converse is also true: people in general wont pay high auction prices, if they can directly buy a similar piece of land in-world.

Of course -- as we see on eBay all the time -- there will always be uninformed buyers paying higher than market value, but that doesn't mean the auction system is inefficient. Other uninformed buyers buy non-auction land at inflated prices too; that doesn't mean we should scrap direct land sales also, does it?

Lastly, auctions do not depend on items having variable or unknown value, so that basic premise needs to be revisited. There are many excellent economic texts dealing with auctions for reference.

Thanks for your consideration,

-peekay

What good would new users and Linden Lab get out of this idea?

I am definitely not a fan of getting rid of First Land. I joined SL specifically because it seemed like an interesting place to build and script and do fun and constructive stuff, and had I not been allowed a piece of First Land with my account, I likely would not have stayed longer than it took to find out that a public SandBox is absolutely unacceptable (which in my case was about two hours). I doubt that story fits the majority of new users, but I bet it's not a rare story either.

Well in truth, most new users have not really benefitted from the current system. I myself was never able to buy first land, and right now, no one can buy first land.

The real beneficiary of the current system is profiteers. As SL is becoming more popular as we've seen recently, the current system will be even more untenable, because the ratio of people vs. available land will keep on worsening. So why keep the current system if it doesn't really benefit newbies?

The benefit to new users is that they can purchase 512 m^2 lots at transparent fair market value, instead of paying over-inflated prices to profiteers and land barons who snatched them up.

The benefit to Linden is they can again sell these lots in quantity, instead of having to stop small parcel land sales because profiteers were hoarding them.

The benefit to everyone is the auction system creates a level playing field. Everyone has the same access to new land whether you're a newbie, an oldbie, or a land baron.

-peekay

Peek, this system allows for more disruption in it that current ones.

Could you elaborate on that please? Maybe an example of what you're thinking of.

I realize my suggestion will not be a popular one (forget about the feature voting tool), but I believe it is the right one.

Thanks,

-peekay

With auctions, it's possible to set your limits at what you could resell for a profit, this making resi's still have to pay the same price and if they don't then they get it anyways.

Also, with an auction style, it's possible to wait to the last minute and snatch one up cheap and resell anyways.

I am a new user and I benefited from First Land. I did about 2 minutes worth of homework to know how to find it and how to buy it. Then I did another 2 minutes worth of homework to find out that I would be spammed with offers and I should hold the land.

I think it's a fine program and should stay. The only change I might make is to automatically open a notecard when you buy first land which congratulates you on the purchase and provides some tips about researching your land's market value, understanding prim counts, avoiding scams, etc.

@Seola: with the current system, between a profiteer and a baron they could make several hundred percent (!) profit by grabbing first land, combining them then reselling them. With an auction system, the best they can do is one bid increment. With an auction system that assigns 512k parcels randomly to winners, the incentive for profiteering is even less so.

As far as "grabbing auctions at last minute", simply use an auto-extend mechanism. If someone bids at the last minute, the auction automatically extends for n-minutes. But, even last minute auction grabbing is a deterrent to profiteers as it tends to drive price up, not down (everyone puts in their last minute, maximum bids.)

Remember, profiteers want to buy land at prices below fair market value and then resell them at inflated prices. Auctions effectively prevent that.


@Seraph: You were lucky, but your experience does not translate to other newbies on the grid, especially those who are joining now and will be joining in the future. There is no First Land for sale now, and with SL's current rate of growth, it's likely that only a very small percentage of bonafide newbies will be able to get First Land when / if they do become available again. Most newbies wont be able to participate, and the rest of the "First Land" go to profiteers.

With an auction system, at least everyone will be on equal footing.


There are parallels in real life. For example, whenever governments make available a scarce resource -- such as wireless frequency spectrum allocations -- they are made available through auction processes.

And whenever governments afford artificial subsidies to a group, it inevitably leads to imbalances where a small part of the group profits while the rest of the group suffers.


Thanks everyone for your comments. I know such a change wont be popular, but I hope it is at least considered. I guess all that can be said has been said by now.

-peekay

I agree, but they don't combine them, they leave them as is. A 512 is a hot commodity because it's free with premium.

If you are speaking of assigning randomly, then it isn't an auction, but a lotto.

As for auto extend, that's quite a resource hog and could be extended way past it's date simply because of these last minutes, and then you might get stuck with a land that was cheaper in world in the first place.

For the most important, doing it auction style defeats the purpose of the program in the first place. It was meant to be cheap and help out new premium members. Driving the prices up in an auction negates the whole reason this system was put in place.

Why not just limit the number of 512 plots you can buy in a single day or week?

OK, say I'm a new residenter. I've been getting my feet wet, maybe I've even scored a few lindens here and there, and I now have 1500 lindens. I can afford a 512 sq. m. plot of first land for 512 lindens, if I can find one. That's cool, I can go buy land and people won't be complaining that I'm a drain on the system. I might just be able to buy me some land and start setting up my homestead or a business. YEAH! I'm having a blast!

But, if the auction system gets put in instead, then there's absolutely no way I'm going to be able to buy a parcel of land that cheaply. I'm not sure what the average going rate is now for land, but I believe it's in the neighborhood of 4,000 lindens for a 512 sq. m. parcel of land. Just for the sake of argument let's pretend that the actual market value is 4,000 lindens, then.

OK, so now I'm trying to buy a piece of land, bidding against others including huge land barons who have lindens up the ying-yang, and I've only been in-world maybe two weeks. First off, do I know how much land is worth in the first place? Maybe I've done my homework and researched it, in which case I'm fine; but how many new residents really know where to look to figure out what the property is worth in the first place? Now secondly, while someone may have a 3500 linden bid on that property, which I could beat without paying too much for that property, unless I'm already willing to buy lindens and don't have a problem with buying that many, I can't afford to buy it anyway!

How many new residents are likely to shell out that many lindens for their first piece of land if they're not as familiar with a lot of the financial dynamics of Second Life as someone who's been here a while?

Bad idea. That's going to exclude a large number of new residents, in my opinion.

How can you be so sure of that? There's nothing new about people skipping First Land due to availability issues. Certainly since I arrived back in May (there were only 140,000 users back then compared to over a million now), there have always been days or even weeks when First Land regions wouldn't become available. And it's the sudden availability of regions (not the odd abandoned parcel reverted to First Land) that are important when it comes their high visibility in the Land Sales list.

I've seen plenty of First Land appear throughout November and the only thing that seems to have changed is that it's being snapped up at a faster rate. (Guy Linden would probably confirm that I've been hanging around like a bad smell lately, were he not such a gentleman. ) Multiple regions are still being carved into First Land every 2/3 weeks -as was always the case- and getting hold of it is about having enough patience to wait for Guy to start carving up brand new regions. Nothing new there either.

Actually, I wasn't at all lucky. That was my point. I watched the First Land search like a hawk and I knew how the process would work. I see no problem in rewarding the informed consumer. That's how real estate works outside of SL, too.

I think you're missing another key of First Land. It is 1.0 per m^2. Always. So, regardless of every other factor, it can be purchased with the premium account initial stipend. I don't think an auction system would provide that because it would price according to the actual value of the land. First Land exists to provide land to brand new premium accounts, so that would be a failure.

That's not the issue.

What's happening is now land barons create brand new accounts each day.

As for the mention of first land not being able to be bought before it was this bad.. because the same method was used. The credit card verifies them regardless. It's just more and more people are getting on it now, and even paying people to follow Linden's around waiting on first land openings.

That's why I proposed not being able to sell first land for anything BUT first land again for 45 days. (see my thread below)

This way, if you don't want the land, you get your 512 back at least. Also, it makes a baron need 2 months of premium and 2 months of tier, negating a profit for land junkies.

If you decide to sell your land at the end of 45 days for a profit, around 4k is the low end going price right now, by the time you figure in 2 months premium plus sales, you recoup all your losses.

Hell I just want FirstLand to even show up! Been waiting 3 weeks for some and getting tired of waiting.

VooDoo, to further elaborate outside of RA, the land stuff is HEAVILY backed up from all the sim orders. I expect it to calm down soon though and they'll start working on more first land.

You must have a RL too VooDoo. I really have seen plenty in that time, including over a dozen FL parcels just a few days ago. I can't remember which region it was, but because it was an old sim I suspected large abandoned parcels were now being carved into 512sq. m plots to increase FL availability.

The best tip is to keep the same hours as Guy Linden. Do your searching every fifteen minutes or so while he's on.

There is no way that any newbie should be required to outbid land resellers to get their First Land.

Allowing land prices to rise so much that buying a month's premium and then reselling the first land results in a net profit was probably a mistake, and similar loopholes like that with premium accounts have been closed in the past.

I think all they need to do is to toughen up the restrictions. One First Land per credit card, no matter how many Premium accounts are registered, or if they have been cancelled in the past. No First Land for corporate credit cards, or corporate surnames.

(I thought the alt limit was in full force for Premium accounts anyway...?)

Have different 'minimum ownership' periods for different payment options for premium accounts. ie if you set the payment to monthly, then you have to wait 45 days to sell your first-land, if you are on quarterly then it's 30 days, if anually then there is no restriction. Try to attract more people to make a commitment, and discourage signing up to abuse first-land.

Yumi, they are getting throw away debit gift cards.

You can load them up for face value with no tax, come here and voila, 30 new verified alts with 30 cards with only 12 bucks each on them.

The people must still be giving their names and addresses when they create Premium accounts, which could be matched to detect excess alt creation. And if those cards are equivalent to full-status credit/debit cards, then presumably providing a false address with one is still credit/debit card fraud. True, you are not stealing someone else's money by using their card, but you are still defrauding the merchant out of knowing who they are doing business with.

Otherwise, ban these cards as payment for SL as they do not verify identity.

Or, at least, don't allow someone to purchase first land unless they have a card connected to a bank account.

Or, make all Premium members wait at least 30 days before selling their First Land. 2 months' subscription wipes out the profit.

No, it's a Dutch auction, not a lotto. In a Dutch auction, the n-highest bidders win the n-available parcels. In this scheme they just don't get to pick which 512 m^2 parcel they get.



Again, not true. No one has to put in a bid above what they consider market value. If you put in a higher bid because you think it's worth it, then by definition that is market value.



The program is already defeated. Consider two scenarios for a newbie:

Scenario 1: You've just joined SL, learning how it works. You figure out that there's something called "land ownership." All land are sold at auction. Everyone gets to buy them at open, transparent prices, whether they're a newbie like you, an oldbie, or even an Anshe Chung. Seems fair, you're happy.

Scenario 2: You've just joined SL. They tell you there's this thing called "First Land" with subsidised price. But, you can really get it unless you have no life and use the Search For Land function every five minutes. Even then, you cant really get it because there has been no First Land for sale for awhile. And, oh, when there are some available, you can't really get it because the profiteers would buy them first. There's this thing called "auction" but there are no 512 m^2 lots there either, just bigger parcels which you have to pay more to use. So, young newbie, if you want a 512 m^2 you have to buy it from one of our resident land barons at a premium cost.

Tell me, as a newbie, you wouldn't prefer Scenario 1 than Scenario 2. I would.

-peekay