It encourages lower prices, and it's how it worked in retail. Prisoner's dilemma and whatnot. Whether that benefit is worth the cost is certainly debatable.

Your 10k item posted at 9001 is literally 999 gil lower and the exact scenario I was talking about. But yes, the problem can be larger with higher sums, when someone posts a 100k item for 90,0001 or a 1Mil item for 900,001.

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It`s a mechanic that allow to drive the price down on item in the AH.

Players that bump up the price of item when there is none of the AH is the balancing force.

That means that rare item that get bough immediately will usually steadily increase in price, while item that get put on AH faster than peoples buy them will get lower in price.

Items that have found their sweet spot will have small cycle of up and low by encouraging crafter/farmer to produce the items when the price is high and to go do something else while it`s low.

Feels right to me.

It works fine when the economy is active. Right now it is stagnant and prices of gear and crafting mats have been on the downswing. In certain markets this creates a positive feedback loop where prices get crushed to the point where people just NPC everything. Sometimes when this happens that market is never able to recover.

NPC’ing mass amounts of stuff is also not great for the inflation rate. It’s a delicate balance that is currently out of whack. People need to be able to make Gil to participate fully in the game. If Gil isn’t circulating through the economy and are forced to NPC their farmed/harvested items to have access to Gil, the economy begins to atrophy. The two things that can fix this are [1] content and [2] content. Content in and of itself creates activity in the economy. It also attracts new or returning players which creates activity in the economy. Here’s to hoping some content is on the horizon.