Friday, March 28, 2008

Goodbye Outliers

After fruitful discussions with a consulting economist, we've made a minor adjustment to the way we calculate prices. The goal was to reduce the influence that outlying price points could have on our determination of market prices. For instance, let's say that someone lists a copy of
Playboy: The Mansion for $1,223.73 or Battletanx Global Assault for $999.99 (which has since been removed). Both of those prices are far above the market price for those games. In certain circumstances, under our old algorithm, those outliers could have caused us to list the Current Price as higher than it should have been. With the new algorithm, such outliers no longer cause a problem.

This seems like a good time to mention a couple caveats about market pricing in the video game industry. Because of low sales volumes for many used games, the market is much less efficient than a typical commodities market. That means that the charts and prices can be highly volatile. For popular games, this isn't much of a problem. Rare games, however, are particularly vulnerable.


racketboy said...

Cool. That was another thing I was going to suggest, but forgot about later. good work!

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