I have a player whose character is building a school of wizardry in game. We're using downtime rules to build the building and hire the help. He wants to create a magical sparring dojo, and wants to make the merciful spell metamagic effect be applied to all spells within that room. I am wondering what requirements (price, spellcraft DC, etc) I should levy on this.
A greater merciful rod costs 12250 gp to apply merciful to any spell 3 times per day, so let's start with that. Now we need to adjust for the fact that this is limitless use rather than 3/day. Doing a little bit of reverse-engineering based on the pricing guidelines for custom magic items with daily usage or limitless usage, it looks like this should be about 9 times more expensive. So 110250 gp. Next we need to account for the fact that this is slotless, which doubles the cost, so 220500 gp. Then we need to account for the fact that multiple people in a given area can benefit from it... which is very hard to quantify, and there is the flip-side that the effect is immobile. I'd conservatively put that around half a million gp, because this is already getting really pricey. Finally, we must consider that this effect is double-edged and can be used to potentially deleterious effects to enemies, which gives it additional utility beyond what the original rod could do. Again, I'd say double the cost.
So somewhere around 1 million gp would be my ballpark estimate, give or take depending on how big you wanted the effect to be. You could probably haggle this up or down based on your own value judgement, because it really is an unprecedented effect.
Independent Research: A wizard can also research a spell independently, duplicating an existing spell or creating an entirely new one. The cost to research a new spell, and the time required, are left up to GM discretion, but it should probably take at least 1 week and cost at least 1,000 gp per level of the spell to be researched. This should also require a number of Spellcraft and Knowledge (arcana) checks.
Personally, I would use this guideline to have him research and create a Magic Circle of Mercy (cleric, paladin, sorcerer/wizard 3 - based on the level of magic circle against evil), or a Zone of Mercy (cleric/paladin 2 based on Zone of Truth) apply it to the center of the dojo, and apply Permanency to it for maybe 5000gp worth of diamond dust (minimum CL13 as a 3rd level spell).