Greetings! My name is Jeff Corder and this is my first Magic related article.
Value is a very broad topic. My intention here isn’t to cover everything (which would be impossible, even for me!) but rather to cover some of the personal situations that I feel are worthy of your attention and consideration.
What is value? How should a person go about valuing an object? Is that different than when valuing a Magic card?
The value of any object is relative and subjective. A seasoned economist can likely talk at length about how the price of iron in South America is fluctuating and why that affects everything you buy. Those examples are not what I would consider beneficial for us: people who play, and trade, Magic cards.
Milk, on the other hand is a great example for us to examine fluctuating values. (I’ll come back to Magic in a second. Stay with me!) So, let’s talk about milk. Milk is an item in constant demand, as it is a consumable item with a limited shelf life (and totally delicious!).
In fact, yesterday I realized I didn’t have any milk in my refrigerator. I had a coupon for milk that gave me a $.35 discount. When I got to the store I found that the milk I wanted was on sale.
Normally the milk I buy is $3.80 for one gallon. Yesterday it was on sale for $3.34. With my coupon the price I paid was $2.99, plus tax.
What is the value of this milk?
Clearly I’m willing to pay $3.80, as that’s normally how much I buy milk at. But is that the value of the milk?
The store is willing to sell me the milk at $.35 less than the normal price in exchange for a coupon. So is the value of the milk $3.45?
Then they reduce the price by an additional $.45.
Got Milk?
Does that mean the value of the milk is only $2.99? If so, why would I ever buy milk at a higher price? Clearly, if milk is only worth $2.99 then I should never have to buy it at a higher price. That should be the price I always pay for it.
That isn’t the case, though. Value and price are separate things. Even if the price of milk stays consistent, my value of milk changes all the time. Maybe I really want some chocolate milk, or perhaps I want to use the milk to cook something, so my value goes up. Or maybe I have two full gallons of milk at home and the value of more milk is close to zero.
That’s also a good clue to help us realize that just because sometimes I can get milk for 2.99 doesn’t lower the value of the milk. The value I give to the milk didn’t change yesterday as I bought milk, only the price I paid changed.
Value is always relative.
We can also see these forces of fluctuating value at work when we look at prices of Magic cards.
We have access to websites like Star City Games and Channel Fireball who sell massive amounts of cards to end users.
These stores set prices based on speculation and knowledge of the current formats and pure guesses at what other people value cards at.
Just because some website says a card is worth $20 today, that doesn’t mean that the value of the card for all people is $20. If Star City Games or Channel Fireball decides they aren’t selling enough of that card they will decrease the price until it matches the value given to it by end users. That $20 card could drop to $10 the next day, then $5 the day after that.
Is the card really worth only one fourth what it was two days ago?
No!
The value of the card didn’t change for the majority of customers. Star City simply lowered the price until they found a sell price. This illustrates a very useful point:
Card sellers are not value setters.
Let me say that again.
Card sellers are not value setters.
You, as an individual, are a value setter for any cards that you may be interested in.
Don’t get me wrong. Knowing what the big online card sellers value cards at is very good information to have, as it helps you value cards you don’t have any experience with. Just don’t let it run your trades for you!
The main problem with any one person assigning value to an object is that value is subjective. Hunches, emotional attachment, top 8 deck lists, pro level player recommendation, usefulness in your local metagame, the list goes on. All of these factors play a role in determining the value of a card for a single person.
Take the following situation:
My friend Wes was trading with one of the kids (we’ll call him Jim) at our local store. Jim is about 15 years old and has been playing at the store for several months at this point.
Wes found a foil Vengevine in the kid’s binder and asked if it was for trade.
Jim said yes so Wes pulled it out and asked Jim to find some stuff to trade for it.
Jim pulled out a promo Emrakul, the Aeons Torn and asked “Is this OK?”
I remember Wes looking at Jim for a moment, and saying “Sure.” Jim closed the binder, thinking the deal was done.
Let’s pause here for a moment. Wes could have completed the trade and both parties would have been perfectly happy.
Why?
From Jim’s perspective he got this big flashy card that if he casts it he’s almost sure to win the game. Vengevine doesn’t do that. For Jim, Vengevine isn’t useful.
Instead, Wes says, “You can have more than just that, man. The Vengevine is worth like 70 bucks.”
Jim agreed to take some more and went back to Wes’s binder looking for other cards.
Jim felt bad for taking more cards, though. Even after Wes explained that a foil Vengevine was worth more than $70 online the kid was still hesitant to take more because he felt guilty. Jim felt he had already received equal value with the Emrakul, why would he need more? Eventually Jim said that was enough and he was happy with what Wes had pulled out for him.
Price doesn't always equal value.
When all was said and done the pile that Wes was trading to Jim was worth about $30 on eBay, with the foil Vengevine being worth about $70.
Yet Jim still felt guilty about taking so many cards.
Wes also felt guilty for making so much profit off of Jim. He felt more like he was a dealer during the trade, rather than trading value for value. Jim didn’t see it that way. It may seem strange, but they both felt like they were ripping the other one off.
Why does the general Magic population assume that everyone should always place the same value on a card? Cards are worth different amounts to different people at different times.
I have a friend that loves foil cards. If you were to see him trying to trade it’s obvious that, for him, the value of any foil card is greater than the value of any card you might trade him. He’ll often make trades that are lopsided just to get the foil card he wants. Trying to get foil cards away from him is even worse. He always expects more value out of a foil card than other people do.
This friend once traded away a normal Elspeth, Knight Errant and $40 for a foil version. He could have waited and bought one online at the time for about $60. When he saw that foil Elspeth, though, his personal value for the card jumped high enough to offer cash and a normal one on the spot.
The zinger is that he was as happy as could be with the new card, and his trading partner, who didn’t care about foils, was just as happy.
We have to start educating people about the economics of trading. We can’t stop there, though, we also have to educate about the psychological aspects of trading. We have to make a very conscious effort to help people understand that the value and price of cards fluctuate. Not just from time passing, but also from the person you’re trading with.
Emotions can certainly run high when trading. It’s not all just about the money!
Take me, for example. The very first pack of Magic I ever opened was a 7th Edition booster. The last card in that booster was a foil Birds of Paradise. For those that didn’t play at the time, Birds of Paradise was quite the money card. A foil one could eBay for more than $100.
I put this card in a special case and usually left it at home. This card colored my first several months of playing Magic. Being younger, and stupider, I would sometimes bring it with me to my play group as sort of an ego boost. I’m not proud to say it, but I used that card to gain respect and awe from the other players. One of these other players was trying to collect every version of Birds of Paradise. He wanted my bird. Bad.
For many months I refused to trade with him. Finally, I broke down and let him make me an offer.
He put about $150 in cards on the table before I finally relented and traded the Birds of Paradise.
I traded that card, not because of the trade value, but because my trading partner really wanted the Birds. He continued to push me until I just gave up my hold on it, rather than continuing to feel pressured.
I still regret that trade to this day.
The reason I regret the trade is not because I felt ripped off on a price scale, but because I held a great deal of sentimental value in that card. To me, that card started me on my journey, and I just gave it away. If you had watched Duck Tales you’ll understand when I say it was my “Number One Dime.”
No amount of cards, nor any monetary value, could replace that card for me.
Value is always relative.
Luckily for the savvy trader, there are ways to modify value, too. One, very effective way, is a limited time offer. We see this constantly in marketing. “Limited time only, order now!” This works amazingly well with everything from cars to pizza to Magic cards.
Recently I was at one of my local card shops and noticed that he had three Inferno Titans in the case.
“How much?”
“They’re $5 each, if you buy them now. I was about to raise the price, though.”
Let’s just say he got my $15.
The value of those Inferno Titans went up for me because of the time limit. I only needed one to complete my set. But then the need for these Titans jumped, and thus, so did the value.
Hopfully these examples will give you something to think about the next time you’re cruising the trading tables!
Thanks for reading!
I like the article Jeff! Kinda crazy, I was about to submit an article to the site on the exact same subject lol, great minds think alike, I guess!
It was a good article, but so many players are emotionally attached to every card that they can't part with them. Stu wrote a guest article here last month and the one thing he kept repeating was "cards will come back". On the other hand I still regret selling my Mirage artist signed Wall of Roots playset. I was quitting MTG for about the third time and put the remainder of my collection, my encylopedias, my Duelist 1-20 or so in a box and sold it all. I'm a lot less likely to do that now. I don't even put things like that in my trade binder.
On the other hand I've got a stack of legacy staples that I've been hanging onto for the one day I might decide to try the format. Most of them are commons and uncommons that would be a pain to reaquire, but I can get $20 easy right now for a playset of Cabal Therapy. If I don't need anything for my decks, then I might as well hold them, but I could likely trade them up into 3+ fetchlands that I could use right now. It would be poor collection management for me to play sub-optimal cards, or complain about the cost of fetchlands while holding these in my binder for a rainy day. Yet so many players do just that.
@the_cardfather: I do this too to a certain extent. Although I only have one Standard deck, I've built up a binder of Standard rares that I *could* trade or *could* play with, but I just leave it all at home. I think the big reason is I'm hoping the value of the binder will go up as the new Standard season plays itself out, but it's not doing me that much good keeping it all at home.
I think it comes down to just pulling the trigger. At some point I'll just commit to going with UW control for the long haul and put everything else back into the trade binder. Speculating is fun, but all those cards I'm sitting on could be getting me cards I actually want.
Very, very nice article. If only there was a recent discussion on this site this principle would apply to…
^ lol
Also, +1 for the Duck Tales reference.
Great article! Fun to read and makes a good point.
A lot of people forget that trades only ever take place if both the seller and the buyer perceive an increase in value. Trading can never be zero-sum in terms of value.
This is a good article.
Some more examples of value:
A coke at a ball game or amusement park.
Cards at the prerelease where hype drives local prices as much as what it's going for on Ebay.
While value fluctuates, price is more of a definate value. Different players may value cards differently, but The average price of a card on Ebay is definative. So ethically, how much should we use price vs how much should we use value? I think it depends on what is driving the value. If you're at a PTQ or Grand Prix, and someone needs cards right then for their deck, I think it's fair to have a higher value, like selling a coke at a ball game. If you're at a prerelease, and someone wants that card you just pulled, it's fair to value it higher since you can't actually get the card form SCG or Ebay yet.
Of course, you can value your cards at whatever you want. If you value your first foil birds @ $150 even though it goes for $100 on Ebay, there is nothing unfair about that. I guess what I'm trying to discuss with myself is where to draw the line. At what point is it adjusting value vs ripping someone off. So long as you let your trading partner know that you are valueing it, not lying to him about what the price is, I'm ok with that. For example, I think it is fair to overvalue Stoneforge Mystic right now. It's online price may only be $4 – $5 but it seems fair to value it at $6 + based upon speculation. As long as someone doesn't try to tell me it's price is $6, I'm ok with that. Ppl lying to me and trying to rip me off angers me, sorry for the ramble haha
Totally agree. I hate it when people just iPhone stuff and expect me to automatically respect whatever price they pull off of eBay or Starcity. You want to use those values in evaluating the trade for yourself? No problem. But don't expect me to put a card at $5 just because the site does. An example from this past weekend:
Guy wants my Moltentail Masticore, I want his Grave Titan. He says they are equal and pulls up the prices, which are indeed about equal. But I KNOW that everyone in that store will be willing to over-trade for that Masticore for the next month+ because it just came out and will be very tough to find. OTOH Grave Titan is old news and much easier to find. So maybe the site says they are both $20, but I know I can get a lot more out of the Masticore from someone else, so pony up or forget about it.
Here's another example… there's a fella at my local game store who pulled a foil primeval in a draft, and I wanted it badly. I offered him several reasonable trades for it, but in the end he made a counter-offer that included a bunch of bulk rares that, by my measure of value, summed up to about 18$. I felt guilty taking the trade, but he assured me that, very simply, he valued the cards by what use they could be in his decks (which were mostly casual), and was just happy to be obtaining the cards he wanted without having to pay his own money for them.
We both came away very happy with the trade, which is the most important thing anyway. Important thing is just not to scam them… let them know how you value the cards up front. Nothing could be worse than making a trade like that without disclosing what you value cards at, then having them see you at a later trade valuing their card at 70+. Fine line between trading with someone who values things differently and scamming them.
A very good article. A great depiction of the psychology of trading. Also my respects for not screwing over the emrakul kid. I mean… he may have been happy for a while but what happens when his friends tease him about his trading flop or 1 year passes and he learns more on the game and he realizes he's been screwed. Sure happened to me when I was a little kid playing magic. And I know that the temptation of sharking out sometimes can be quiet powerful. Experienced, versed players have a responsibility toward the little guys of the community.
Hey everyone!
Thanks for the kind words. I really do appreciate it.
I didn't notice that this went up until this last Saturday. Curse those out of town trips!
Again, I appreciate ego boost, but does anyone have any recommendations off hand to improve my writing? I take great pride in the things I produce, so if there's anyway to become better I'd certainly like to hear it!
I really liked this article.
The story about Jim and Wes reminded me to a situation I was put in this weekend. I found out that a neighbor played casually, and invited me (T2 Competitve) over for sunday magic with him and a bunch of friends. When we finally get around to trading, I see a foil molten-tail masticore. I set aside what I want, and then he flips through my binder, picking out 1 card for each one I pulled out. by the time it came to finalize I had nearly 70 in value (SCG) vs his 20. I started to protest that it was way to lopsided in my favor. His response was "If I had a use for the card, it would be in a deck and not for trade. I know it's probably worth alot to you, but to me its a shiny card I won't use."
I saw him yesterday and made sure he was still okay with it. He said was. And then followed up with.
"Hey, I need another of those Obstinate Baloths. Would you trade it for my Mox Opal?"
It really made me think about the casual side of the game and how those players value their cards.
Thank you for the insightful article.
I get what you're saying here, that different people value cards differently for different reasons, and I think it's valid that what makes a trade "fair" can depend on what and why people value the cards involved at. I agree that value is relative if the market you're talking about includes _only_ cards with value relative to each other.
The thing is, you make a practical analysis of the market for cards and the value of cards, and it needs to at least mention rationality and make a basic assumption for any of your statements to have weight. The other thing is, you forget about the secondary market for a minute. While you seem to assume that people are utility-maximizing (ie, they do the things/make the trades that make them happiest- NOT necessarily the things that add to the monetary value of their collections). So if I value that Emrakul similarly or higher to your foil Vengevine, I've made the right trade (let's leave fairness aside for now and just focus on what makes people happy).
The problem with this is that there's a secondary market for cards, wherein I can obtain that Emrakul for about 6 dollars and that foil Vengevine for 60 dollars. I can sell that foil Vengevine for 60 dollars and buy six of those Emrakuls, which gives me much more utility than the aforementioned trade, even if I am not fixated on monetary vlaue and only want cards that I need. Of course, I probably don't need 6 Emrakuls, but I can buy one and then I can buy a Kozilek, or twenty Etched Champions, or whatever. Even factoring in transactions costs for buying/selling stuff online, I can get a "trade" that makes me much happier if I remember that the cards have monetary value on the secondary market (which obviously, they do).
There are exceptions of course- most people are too lazy to buy/sell stuff on eBay or an open market, little kids don't have the knowledge or the practical opportunity to do this kind of stuff, etc. Also, there's the sentimentality thing- I opened a foil Elspeth or whatever at my prerelease and it was mine all mine, and I really didn't want to trade it, even for $100 worth of cards. But when I can sell those cards for $100 (or even $80 to a dealer) and buy a mint foil Elspeth on ebay AND have money for cards left over, why would I hold on to the Elspeth? Extreme sentimentality can explain that, and not everyone's rational… But as long as your card has monetary value, what you said can mostly be thrown out the window.
Sorry if this came off as a rant, but I want people to discuss. I want to note that I REALLY like your writing and respect your insights and agree with them most of the time, just not this time.
DJ:
I certainly thought of that while writing, but noticed the article was getting a little long as it was.
Nothing is this world has a set value. Not food, not gold, not cards, not even money.
Lets think about that for a second. Not even the currency we use to buy all of the goods and services has a set value. We can demonstrate that to be true because the cost of goods change. Therefore the amount of money required for any object or service fluctuates, making the value of the currency fluctuate as well.
This isn't even considering other competing currencies that change the value of your primary currency.
The only reason any cards have monetary value is because people want them. Simple supply and demand. This is something I danced around in the article, mainly because it sounds a little cliché, and using it felt like a crutch. However, it really is central to economics in general, which includes Magic cards in a secondary market.
Just because there is a supply of cards online with a demand from people online, does not mean that the price of a card is equal when dealing with a person on an individual basis. When dealing locally the supply is only the local supply, and the demand is only the local demand. This becomes even more refined when you're trading with someone.
Keep in mind, as well, that even the prices of cards from online retailers can change a lot in a very short amount of time.
To further illustrate my point, lets look at Emrakul a little more. Checking StarCity we see they'll sell us one for $5.99 (probably where you got your price of $6) but if we look at Channel Fireball we see they want a whole extra dollar for the same card.
How can that be? The price difference is more than 15%! Which is correct? What is the true value of the card?
Lets dig deeper and look at completed Ebay listings. The first thing of note is that there is a rather large range of prices. There are a few auctions that completed at $8.50 for one Emrakul, and a few others that completed at $4. Some even less! Just scrolling around, though, I get the feeling that people on Ebay value the pre-release Emrakul at $5 or so.
Again, why do we see such discrepancies? Emrakul clearly has a monetary value, so why isn't it more solid?
The answer is simple. Even with all of these guidelines from online retailers and Ebay sellers, personal value for a pre-release Emrakul still varies from person to person.
The prices that online retailers set are only guesses at the value their customers give to a card.
We also see excellent examples of fluctuating value with some of the most experienced traders. Jonathan Medina's Pack To Power articles explained this quite eloquently. He was often willing to trade down in absolute price to acquire cards that he knew he could move more easily. Which is to say, for Medina, liquid assets are more valuable than non-liquid.
My main point is that we cannot allow the value we associate to cards be dictated by dealers and online stores. The values that these third parties assign to cards is certainly valuable information and is required for an individual to make any actual currency trading, but that doesn't mean they can just decree what the price is.
In fact, if we take a step back and view prices from these online retailers over a period of months we can start to note trends in card prices and begin to associate reasons for these fluctuations. What we'll find is that in every case these retailers are adjusting their prices to better match the highest monetary value that the majority of their customers are willing to pay. Another way to say this, is they are attempting to maximize profit on an individual card basis while still keeping as much of their stock liquid and flowing as possible.
I only mentioned it briefly here, but I feel very strongly that we should be helping people understand that the actual value of a card and the price of a card on a website are different things.
Thanks for the reply, DJ. This is the sort of stuff I like!
Anyone else have any thoughts on the matter?
As anyone who's played around with Options and other time-sensitive derivatives will understand, the underlying value of an equity is only one factor when you're determining its current market value. Thus, the very definition of value involves variability.
When someone tries to say "but it's worth X" to negotiate a trade, I like to laugh and tell them to ram it up their can.
Unless you're giving me a complete market analysis, including many price points from not only different dealers, but a cross-section of brick and mortar stores filtered by geographic location, size, dedication to MTG and weighted to give more consideration to those most similar to the store(s) I trade or buy at, and then go on to give me an aggregated average of these factors, plus ebay, MOTL, and so forth…and don't forget to build some sort of model to account for correlation between equity values (think of archetypes like sectors and formats as considerations in defining archetypes)…if you'd like to give me that, then do some sort of options pricing model to account for the fact that a Magic card is often a depreciating asset (every day it comes closer to being less relevant to all formats), then see if you can use something like the McNutt demand index to gague liquidity of the asset and then offset any loss of liquidity with a discount on its "book" value, well….
well shit, then you can tell me that Card Y is worth $X. Until then, we're all just guessing. That's my standpoint on the issue. My card is worth as much as I want it to be, period. When liquidity becomes a concern, that's when I have to start adjusting my prices to suit the market.
Great work on the article, by the way!
jancok kabeh!!!!!