Saturday, February 25, 2012

Equilibrium Point Part 2

Last time I asked a question: Where is the equilibrium point when it comes to the fee structure?

As you can imagine, the answer will vary based on length of time chosen, whether Paypal or tickets are used as payment, and whether the Wikiprice message is displayed. For this example, we shall use that Wikiprice is being displayed, the bot is the LITE version and since this is a new bot, only one month is being considered. The rental price is $5.

At 2.5%, it takes 40 tickets worth of trades to accrue a fee of one (1) ticket.

So five (5) tickets means that two hundred (200) tickets worth of trades (in a month) is the equilibrium point.

That sounds like a lot of transactions I can hear you say. And it is.

These numbers were specifically chosen to make the math easy. Algebraically, it can be written as:

1/(amount of trades needed to accrue 1 ticket of fee ) = (rental price)/(X tickets worth of trades.)

Or, to make this into a spreadsheet-friendly form, also known as “solving for X:

X = ((amount of trades needed to accrue 1 ticket of fee )) x (rental price)

Looks ugly, doesn't it? It's easier than it looks. 1/40=5/X is how this looks for the example chosen.

X = 40 * 5 is how it looks for the spreadsheet version.

But I'll save you the trouble of opening up a spreadsheet: here are the final values and next time, we'll go over these scary numbers and draw some conclusions.

(Apologies for this. The table I drew up looks awful in the final draft. So I took a snippet as a picture and this became shrunk. Clicking each picture will put it normal sized.)

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