Project Lore

I often can't understand the average player. Many players acquire gold primarily by doing dailies, farming, or running random dungeons. All three are relatively comparable in profitability. Then again, most players don't have much gold and make just enough to get by. Sometimes they get a windfall, like a Battered Hilt or rare pet drop, then put it on the Auction House, convert their fortune to cash, and stop working to acquire gold. Most players will buy their tier 10 pieces or other Frost Emblem purchases as soon as they have enough emblems instead of buying Primordial Saronite and selling it for an easy ~2,000 gold. Its almost like having the ability to control when you get fortunate enough to cash in on a high-tag item, but hardly anyone does it. Why?

There are three cognitive biases that can help explain this phenomenon - the endowment effect, also known as loss aversion, system justification, and hyperbolic discounting.

The endowment effect is the tendency of people to feel like they deserve something that they earned and overvalue it. That is, a person who acquires something is likely to be unwilling to sell it at a price comparable to the price at which they would have bought it. For example, players who do their random dungeon, run ICC, and do the weekly raid quest acquire Emblems of Frost. The decision they must make is this: "should I buy gear with this, or buy a very popular commodity, Primordial Saronite, and sell it?" Assuming that Primordial Saronite currently sells for 2,000 gold (check your server's AH), and knowing that Primordial Saronite costs 23 Emblems of Frost, we can see that we can easily change each Frost Emblem into about 86 gold each. A player spending 60 Frost Emblems for their tier 10 pants or legs therefore forgoes 5,160 gold, and a player buying the other tier 10 items at 90 Emblems is forgoing 7,740 gold. However, these same players would probably not be willing to work for and spend 7.7k gold on the same gear, or spend a few thousand on an often times better BoE piece.

Since Frost Emblems have been in the game for about 2 months, most players have had time to acquire enough Frost Emblems to make a purchase or two. To most players, the thought of exchanging Emblems for gold doesn't even cross their minds. While tier 10 gear is very good, I seriously doubt the majority of players currently wearing a tier 10 piece or two would have spent 7.7 thousand gold on one piece of gear, yet they are quick to lose the opportunity to have 7.7k gold (which is worth just as much). Consider this - there are boots craftable with 5 Primordial Saronite, plus a few other expensive items, totaling perhaps 12,000 gold to purchase.  Hardly anyone has these boots, yet just about every chump has at least one tier 10 piece. Its really silly, especially when two of the tier 10 pieces drop from Vault of Archavon (even in the upgraded version) and Primordial Saronite, like almost everything in WoW, loses value over time. Everyone is buying gear right now, but in a few months, when more guilds will have ICC on farm and Frost Emblems out the wazzoo, everyone and their dog will be trying to sell you some Primordial Saronite.

Instead of being left at a complete loss on why people are susceptible to the endowment effect, lets also look at system justification. The theory of system justification states that people are likely to support the status quo simply because it is the status quo. Everyone is buying tier 10 gear, and having tier 10 gear is held by many to show dedication and skill. As such, since everyone is buying tier 10 gear, the average player will also buy tier 10 gear before making a rational decision. People want to appear good players, even is that means making poor decisions. Most guilds that can't progress past Saurfang would rather have every member purchase and wear a piece of tier 10 before having 130,000 gold in their bank (25 people times 60 emblems times 87 gold). If you can't get people to use consumables regularly and don't have the guild funds to buy everyone consumables, I can't help but find the paradigm hypocritical. People will value how well their character or guild fits into the status quo over rational decisions.

The third effect I listed, hyperbolic discounting, means that people overvalue having something now rather than having something later. That tier 10 piece will help you and your guild progress, but how much do you value progression? Primordial Saronite will be much cheaper in the future when you have a full set of tier 10. If you can get a full set of tier 10 in 2 months, would you rather have 34,000 gold (the value of 395 emblems, the cost of a set of tier 10) after two months and no tier 10, or a full set? After 4 months, you've lost the opportunity to sell while Primordial Saronite prices are high, so you only get perhaps 300g per Saronite. After four months, the guy who sold his Frost Emblems walks away with 34,000 gold and a set of tier 10, while the guy who bought tier 10 first only walks away with 5,000 more gold. Do you value having tier 10 now instead of later at the difference, 29,000g? Probably not, but most players will buy tier 10 now anyway.

This isn't to say that purchasing tier 10 isn't acceptable in some situations. For guilds where every member puts in 100% to maximize their performance, acquiring tier 10 may be appropriate. They are likely to have access to Marks of Sanctification to upgrade their tier 10 pieces and want to squeeze out every DPS possible. To the group, the value of downing a new boss or hard mode is more than the total gold spent and forgone by acquiring best in slot gear. To the average player, the marginal DPS that these upgrades provide won't make or break your group's success and you are better off waiting on drops from whatever dungeons and raid you are running.

So, jump on your alts and do some random dungeons or find an ICC group. Its great money and it won't last forever.