I would like to propose a somewhat radical modification to how the exchanges
work, most importantly the reagent exchange.

As anyone who is remotely familiar with the trade in reagents, intense price
wars are a common occurrence on the exchanges. I think a major reason for
these price wars is not the intrinsic competition between merchants, but an
artifice of how the exchanges work.

Let me present a sample of a current reagent for sale on the exchange:

| Copper rod 1077 power 400 |
| Copper rod 216 power 390 |
| Copper rod 38 power 350 |
| Copper rod 3708 standard 300 |
| Copper rod 6139 standard 200 |
| Copper rod 514 standard 150 |
| Copper rod 300 standard 51 |
| Copper rod 2230 standard 20 |
| Copper rod 76 standard 18 |
| Copper rod 2498 standard 15 |
| Copper rod 282 standard 14 |
| Copper rod 385 standard 13 |
| Copper rod 822 standard 12 |
| Copper rod 175 standard 11 |
| Copper rod 766 standard 10 |

As can be seen by this example, there is a large quantity of material
available at the "set price" of 400 for power and 15 for standard. There are
also significant quantities for sale at subsequently lower prices. It think
it is the mechanism of how the exchange functions that is responsible for
these large amount of "underbidding." On the exchange, sales at a given price
on done on a FIFO (fist in, first out basis). By this I mean, the first
person to offer reagents for sale at a given price will get to sell ALL of
their reagents at that price before another person sells any reagents at the
same price. Given that the volume of reagents sold isn't particularly large
on a daily basis (~100 power and a few hundred standard), one person can
easily lock out all other sellers for a period of weeks by offering up a large
quantities of reagents for sale. So, now you have 1000+ power reagents for
sale at 400 gp by Merchant A. Merchant B comes along and wants to sell the
same reagents at the same price, but one look at the exchange board
discourages him from doing so. He realizes that with the current quantity for
sale he won't see any money for weeks at the current price. But, but lowering
his price a small amount, say 25 gp, he will now be the first in the sales
queue and be able to sell his reagents quite promptly. So Merchant B offers
his 200+ power reagents at 390gp. Now Merchant C comes along and comes to the
same conclusion as merchant B and offers his reagents at 350 gpbecause he
wants of chance of making a sale. It is obvious to see where the natural
conclusion of this process is. The situation is even worse for standard
reagents, where that quantities produced even further outstrip the volumes
demanded.