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Second Life Land Market is Weird
Chicago Kent
Registered User
Join date: 19 Jan 2005
Posts: 68
02-10-2005 11:01
From: Hiro Pendragon
I've studied macroeconomics... you've got it reversed.

If something moves easily, you RAISE the price as it has a HIGH demand. When the price is raised to a point where the demand starts to drop, you halt raising the price as you have found equilibrium.

If something is not moving easily, you LOWER the price as it has a LOW demand. When the price is lowered to a point where the demand starts to raise, you halt lowering the price as you have found equilibrium.

What stumps me is that if the small plots move so easily, why don't land barrons sell more larger sized plots?

It's clear equilibrium is out of whack on land sales.


(*personal attack edited.) And if you studied economics, its obvious you failed.

So let me get this straight... WalMart, a high volume retailer, should charge a premium.
And Nordstroms, a low volume retailer, should switch their strategy to low-cost.

riiiiight.
Haney Linden
Senior Member
Join date: 3 Oct 2002
Posts: 990
02-10-2005 11:40
Let's debate the ideas, not attack the people offering ideas.
Chicago Kent
Registered User
Join date: 19 Jan 2005
Posts: 68
02-10-2005 11:42
Sorry! I guess I did get a bit carried away :-/

But his theory is full of bunk. Hiro, I think you're theory is wrong. Not you, personally.
Walker Spaight
Raving Correspondent
Join date: 2 Jan 2005
Posts: 281
02-10-2005 13:08
The basic macroeconomic laws of supply and demand apply best in a totally efficient market in which every participant has exactly as much information as every other participant. Otherwise, they have only limited application.

The SL land market is not very "efficient" in the classical macroeconomic sense. "Find" provides a kind of clearinghouse for on-sale parcels, but the amount of work it takes to get a comprehensive knowledge of the market at any given moment means that most retail buyers are operating at a disadvantage. Which is pretty much the same as in RL.

It would be interesting to correlate land prices with other factors, such as PG/Mature, age of sim, or sim-wide traffic figures, as I'm sure these things have an impact that isn't being much considered. I also imagine there's interesting data to be had comparing prices of land sold by big brokers to that of land sold by "small-holders". Basically, that would be the difference between "retail" and "commercial" or "wholesale" transactions, or however you want to cut it up. At any rate, it's an important distinction.
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