Ughh..

[WhoIsThis]

He's basically just trading on the lack of information and low supply of high-demand items. People will often look in CS and use that as the "right price". What they don't see is the history of what the the item has actually sold for over time, which would provide the real "right price". He can only do this because there's no public record of sale prices (say, the last 50 transactions) and not enough supply for sale to "hold" the right price in the market. When there's only one or two items ever listed, it's easy for someone with enough money to take them out of the market to drive the price up. It's a risk if he can't ever sell it for more than he paid, but as long as he's willing to wait he has a chance to make it back. The only thing that can kill him is for some major change to drive prices down, which in PL pretty much only happens with an increase in supply, e.g. drop rate increase.

This is why real-life markets both have huge supply and published sale prices. These two things keep direct price manipulation like this from being feasible. If PL published the history of sales that players could look up, the only thing left would be to try to buy up the supply to drive prices up. But that becomes a much bigger risk when everyone knows the "real" price the item sells for. The price has to legitimately go up to make any money then.

Putting something like a price history would be a huge benefit for the PL economy though. It would very quickly diminish the profit margins of merchanting. That's a huge gain in and ofitself, because merchanting fundamentally is bad for the game. It is a transfer of wealth from the poorly informed to the well informed.