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Total amount of raw ISK in EVE economy?
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delonewolf
delonewolf's den
The Lone Space Wolves
#41 - 2011-11-04 19:06:04 UTC
MeestaPenni wrote:
Carceret Rinah wrote:

That billion came from ANOTHER PLAYER'S WALLET.


I don't think you're getting the point.....

Here, I'll shout it as well, maybe you're a touch deaf....

I CAN MAGICALLY CREATE NEARLY A BILLION ISK WORTH OF ASSETS WITHOUT EVEN PLAYING THE GAME.

It's assets out of thin air. Are you not paying attention to the real world? There is no economical model that can sustain a situation where assets and wealth are created out of nothing.....

POOF! I'm rich.


No need to shout young one. You are still wrong, you created no assets, no ships, no modules, no isk, no nothing, you traded gametime, which is not an ingame asset, for isk made by another player. the net effect on the economy is only the slight isk sink in the form of taxes on the sale.

All the assets and isk in the economy would still be the same whether or not you bought a plex.
Cpt Fina
Perkone
Caldari State
#42 - 2011-11-04 19:19:41 UTC
MeestaPenni wrote:
Cpt Fina wrote:
MeestaPenni wrote:
1) Far too much.


The stock of nominal money in an economy is pretty much irrelevant.
It's the flow that has real consequenses.


This is not a 'real' economy. It wasn't too long ago that EvE advertised a special deal on PLEX. With a couple of hundred dollars it was a simple process to suddenly inflate a wallet by 5,000,000,000 ISK; without generating it via the EvE economy. When the wealth is created without flowing through the economy.....it has real consequences.

There is far too much liquidity sitting in corp and individual wallets. It tends to produce boredom. Of course, it can also tend to produce creative ways of burning off some of the liquidity....[ref: suicide ganks].



As I said – the total amount of money in an economy is totally uninterested. You can't say anything more about economy X if i tell you that a sixpack of beer there cost 1,000,000 units of curreny instead of 100 units.

What you are refering to is wealth redistribution and savingsrate – two concepts that aren't equated to the stock of money in an economy.

And bringing up the "eve is not a real economy"-argument is only valid in the cases where you can pinpoint the differences making an IRL comparison invalid.
Tippia
Sunshine and Lollipops
#43 - 2011-11-04 19:43:21 UTC
MeestaPenni wrote:
PLEX magically appear when GTC are converted; with significant value. Nothing in the EvE economy is needed for me to instantly become a billion ISK richer.
False. When you convert a GTC, you get a PLEX with no in-game value whatsoever, and with an out-of-game value of 30 days of game time.

When you put it on the market, other players may choose to give you ISK in exchange for it. In order for you to instantly become a billion ISK richer, the EVE economy requires other players to have tat billion ISK and requires them to want your PLEX and requires an immense amount of other things to make that trade worth-while for both parties. All of that is needed, or you would get exactly zero ISK for your PLEX — or, more accurately, you wouldn't get anything because you wouldn't be able to sell it. In and of itself, it is worth 30 days, and nothing more.
Quote:
Not so with PLEX......the very moment I convert GTC to a couple of PLEX.......BAMM!!......there's nearly a billion ISK suddenly appearing in the economy a PLEX has suddenly appeared in the economy
Fixed. No ISK has appeared, just a PLEX.
MeestaPenni wrote:
Carceret Rinah wrote:

That billion came from ANOTHER PLAYER'S WALLET.
I don't think you're getting the point.....

Here, I'll shout it as well, maybe you're a touch deaf....

I CAN MAGICALLY CREATE NEARLY A BILLION ISK WORTH OF ASSETS WITHOUT EVEN PLAYING THE GAME.
The problem is that you think “a billion ISK worth of assets” means a billion ISK has been added to the economy. This is not the case. A PLEX has been added to the economy, that is all. It is up to other players to determine what it is worth, and the PLEX leaves a negligible imprint on the economy as it passes through it. Once it arrives at its destination, it is removed from the economy and converted into game time, and in the mean time, all it has done is shift a bunch of ISK around and made some ISK disappear through taxes. It is a self-contained faucet-sink pair that ends up with a very tiny negative ISK adjustment to the economy at large.

Even if you exercise the other call option and turn the PLEX into AUR, the voyage of the PLEX still makes no difference, because at the end, it is still removed from the economy.
Rocky Deadshot wrote:
probably the only real ISK sink in this game is War Dec payments, taxes, and other payments imposed by npcs that actually removes isk from player hands.
Plex are not an isk sink... because as mentioned.... the isk you pay for it goes to another person's hands.
Here's the full list:

Faucets:
  • NPC bounties
  • NPC buy orders
  • Mission rewards
  • Insurance payout
  • GM actions: Reimbursement for lost pods
  • Character creation

Sinks:
  • Market taxes & fees: Broker fees, Sales tax
  • NPC sell orders
  • NPC station services: Repairs, Jump clone installation, Medical clone installation/upgrade/station change, Science and industry slot rental, Ship insurance
  • NPC station office fees: Rent, Impound penalties
  • Wardecs
  • Sovereignty fees
  • PI fees: Building PI structures, Import/export tax (from NPC-owned customs offices)
  • Corp & alliance fees: Corp creation, Alliance creation, Alliance upkeep, Creating/awarding medals, Corp registry ads
  • Agent fees: (Certain) LP store items, Locator agent services, Courier missions w/ deposits
  • CSPA Charges
  • Smuggling fines
  • GM Actions: Removal of bought ISK, Removal of insurance after ship reimbursement
  • Character deletion
Ptraci
3 R Corporation
#44 - 2011-11-04 20:20:55 UTC
Tippia wrote:
False. When you convert a GTC, you get a PLEX with no in-game value whatsoever, and with an out-of-game value of 30 days of game time.



Quoted for Truth. It never fails to surprise me how people can be attracted to a game largely based on economics, when they have no clue about economics. PLEX just passes through the game on its merry journey from creation to destruction. The creation of PLEX involves the transfer of US dollars, Euros, or whatever real currency from someone to CCP. Its destruction involves the transfer of 30 days of game time from CCP to someone's account. ISK is only a medium of exchange for this temporary creation that is PLEX. ISK is neither created nor destroyed by PLEX. It only moves from A to B.
Magie Elster
Doomheim
#45 - 2011-11-04 20:39:17 UTC
Tippia wrote:


Faucets:
  • NPC bounties
  • NPC buy orders
  • Mission rewards
  • Insurance payout
  • GM actions: Reimbursement for lost pods
  • Character creation

Sinks:
  • Market taxes & fees: Broker fees, Sales tax
  • NPC sell orders
  • NPC station services: Repairs, Jump clone installation, Medical clone installation/upgrade/station change, Science and industry slot rental, Ship insurance
  • NPC station office fees: Rent, Impound penalties
  • Wardecs
  • Sovereignty fees
  • PI fees: Building PI structures, Import/export tax (from NPC-owned customs offices)
  • Corp & alliance fees: Corp creation, Alliance creation, Alliance upkeep, Creating/awarding medals, Corp registry ads
  • Agent fees: (Certain) LP store items, Locator agent services, Courier missions w/ deposits
  • CSPA Charges
  • Smuggling fines
  • GM Actions: Removal of bought ISK, Removal of insurance after ship reimbursement
  • Character deletion

Thanks a lot. Exactly what I was looking for in my third question.
Astrid Stjerna
Sebiestor Tribe
#46 - 2011-11-06 01:44:06 UTC  |  Edited by: Astrid Stjerna
Ptraci wrote:

Quoted for Truth. It never fails to surprise me how people can be attracted to a game largely based on economics, when they have no clue about economics. PLEX just passes through the game on its merry journey from creation to destruction. The creation of PLEX involves the transfer of US dollars, Euros, or whatever real currency from someone to CCP. Its destruction involves the transfer of 30 days of game time from CCP to someone's account. ISK is only a medium of exchange for this temporary creation that is PLEX. ISK is neither created nor destroyed by PLEX. It only moves from A to B.


And as I've tried to point out, that's the nature of a closed economy. There's no exchange rate in New Eden that will alter the value of the ISK; one million ISK will always buy a product that's priced at one million ISK, provided that someone will pay that much for the product.

Without ISK sinks, the amount of ISK in New Eden would increase geometrically. Money would come in, but have no way to go out again, and eventually the purchasing power (note that purchasing power is different from value) of one ISK drops. Where a one-million-ISK rig was once considered an expensive purchase, one million ISK would now be 'chump change', and purchases of two-million ISK would be considered 'expensive'.

Eventually, without removing ISK from the economy, the purchasing power of ISK drops to the point where a seventy million dollar ship is traded as though it were a shuttle.

I can't get rid of my darn signature!  Oh, wait....
Tippia
Sunshine and Lollipops
#47 - 2011-11-06 01:51:02 UTC
Astrid Stjerna wrote:
And as I've tried to point out, that's the nature of a closed economy. There's no exchange rate in New Eden that will alter the value of the ISK; one million ISK will always buy a product that's priced at one million ISK, provided that someone will pay that much for the product.
But that's the thing: EVE is not a closed economy. Influx is not connected to outflux. And The exchange rate is entirely volatile because, while you always get “a product priced at 1M” for your 1M ISK, what that product is is entirely variable. You might get a single unit of trit, or you might get an entire battleship.

There is no fixed exchange rate between items and ISK because neither of the two have faucets that are mechanically tied to the flow rate of the sinks.
Quote:
Where a one-million-ISK rig was once considered an expensive purchase, one million ISK would now be 'chump change', and purchases of two-million ISK would be considered 'expensive'.
…and this can (and indeed has and does) happen even in the presence of sinks, as long as those sinks are not coupled with the facuets.
MeestaPenni
Mercantile and Stuff
#48 - 2011-11-06 02:24:02 UTC
Tippia wrote:
and this can (and indeed has and does) happen even in the presence of sinks, as long as those sinks are not coupled with the facuets.


Do you have any idea what you wrote here?

If so,

how so?

I am not Prencleeve Grothsmore.
Tippia
Sunshine and Lollipops
#49 - 2011-11-06 02:31:14 UTC  |  Edited by: Tippia
MeestaPenni wrote:
Do you have any idea what you wrote here?
Yes. A very condensed history of EVE.
Quote:
If so, how so?
Because I wrote it.

Or do you mean “how can it happen”? If so, by not having an equal input and output (or having faucets and sinks that scale differently as numbers increase), ISK can accumulate faster than the stuff accumulates. In particular, this can happen when the methods for generating ISK are tied to skill uses and tactics that can be improved by time, whereas the item injection runs up against hard limits (and the item sinks are made less effective by those previously mentioned skills and tactics).

Once upon a time, 1M ISK was a lot of money. These days it isn't. This isn't because the economy is closed, but because of how faucets and sinks have scaled with number over time.
Zions Child
Higashikata Industries
#50 - 2011-11-06 02:48:57 UTC
People are so stupid... by the by, just look at the multi-year market history for a basket of items, choose a raven, a hulk, trit, maybe about fifteen other items and look at the average price over the years (make sure to take into account volume traded as well). You will find that EVE has a fairly stable currency at the moment, with short-term fluctuations. PLEX are merely something experiencing an increase in demand, and thus the equilibrium price for that particular item has gone up. If every raven in the universe were to blow up tomorrow, prices on that would shoot up. But not because of inflation, it would be because the supply of ravens plummeted.

C'mon, people, basic microeconomics.
Astrid Stjerna
Sebiestor Tribe
#51 - 2011-11-06 03:21:05 UTC
Tippia wrote:
Astrid Stjerna wrote:
And as I've tried to point out, that's the nature of a closed economy. There's no exchange rate in New Eden that will alter the value of the ISK; one million ISK will always buy a product that's priced at one million ISK, provided that someone will pay that much for the product.
But that's the thing: EVE is not a closed economy. Influx is not connected to outflux. And The exchange rate is entirely volatile because, while you always get “a product priced at 1M” for your 1M ISK, what that product is is entirely variable. You might get a single unit of trit, or you might get an entire battleship.

There is no fixed exchange rate between items and ISK because neither of the two have faucets that are mechanically tied to the flow rate of the sinks.
Quote:
Where a one-million-ISK rig was once considered an expensive purchase, one million ISK would now be 'chump change', and purchases of two-million ISK would be considered 'expensive'.
…and this can (and indeed has and does) happen even in the presence of sinks, as long as those sinks are not coupled with the facuets.


I think you're either mistaken on the concept of a 'closed' vs 'open' economy, or you're confused about the term 'exchange rate'. Either way, I suggest that you investigate both terms.

According to eNotes' Encyclopedia of Business, 'A closed economy is a self-contained economic unit that has no business or trading relations with anyone outside of that unit.' As New Eden has only one form of currency (namely, ISK), and no other economic bodies to trade with, it most decidedly is a closed economy (as are the vast majority of MMOs, by nature of design).

An 'exchange rate' is not 'one item for another' -- it refers to the agreed-upon value of a given currency in a given market. (The definition on Exchangerates.net.au: 'By its most basic definition, an exchange rate determines the per-unit value of one country's currency as compared to another country's currency. For example, $1.00 AUD could hypothetically exchange for 1.45 Euros.')

If you take the time to read the paper to which I linked earlier, you'll find a very well-written explanation of how an MMO's closed economic system operates. Ultima Online, World of Warcraft, and EVE online -- in fact, any MMO -- is a closed economic system.

I can't get rid of my darn signature!  Oh, wait....
MeestaPenni
Mercantile and Stuff
#52 - 2011-11-06 03:23:52 UTC
Astrid Stjerna wrote:

If you take the time to read the paper to which I linked earlier, you'll find a very well-written explanation of how an MMO's closed economic system operates. Ultima Online, World of Warcraft, and EVE online -- in fact, any MMO -- is a closed economic system.


IBFTippia,

How so?

I am not Prencleeve Grothsmore.
Astrid Stjerna
Sebiestor Tribe
#53 - 2011-11-06 03:54:27 UTC  |  Edited by: Astrid Stjerna
MeestaPenni wrote:
Astrid Stjerna wrote:

If you take the time to read the paper to which I linked earlier, you'll find a very well-written explanation of how an MMO's closed economic system operates. Ultima Online, World of Warcraft, and EVE online -- in fact, any MMO -- is a closed economic system.


IBFTippia,

How so?


The paper goes examines in detail, particularly in Chapter 3, about the design of an MMO's economic system. As Ultima Online is considered to be the ur-example of MMORPGs, the document as a whole explains the problems inherent to the a closed-loop economic system, and the possible methods for repairing or at least mitigating the damage.

Pay particular attention to the subsection' Hoarding and the Failure of the Closed Economy':

Quote:

Figure 1 illustrates the original design of the macro-economy. Notice that all of the drain paths lead back up to the top, forming a closed loop. The impetus for this design was to prevent resource inflation; the theory being that a fixed quantity of resources would simply circulate from abstract to concrete and back again thus preventing the inflation that had plagued many similar on-line worlds. While this sounded good in theory, it was a failure in practice.


and later in the same section:

Quote:

At first, the designers attempted to solve the deflation problem by pumping more resources into the world – they simply increased the total quantity of resources in the bank. But, no matter how much they added, the resources always flowed into inventory and just sat there. The problem, they concluded, was the lack of drains – not enough stuff was flowing out. However, players are (understandably) extremely resistant to rule changes which take things away from them.
(emphasis added).

In short, players hoarded both gold and items, and (since there were very few money sinks initially) the economy collapsed.

I won't quote any more here; I'm pretty sure I've exceeded fair use already.

I can't get rid of my darn signature!  Oh, wait....
Tippia
Sunshine and Lollipops
#54 - 2011-11-06 03:54:54 UTC
Astrid Stjerna wrote:
I think you're either mistaken on the concept of a 'closed' vs 'open' economy, or you're confused about the term 'exchange rate'. Either way, I suggest that you investigate both terms.
Per the link you posted earlier: a closed economy is one where input and output is a closed loop: stuff going in ≣ stuff going out.

An open economy is one where the two are decoupled from each other

EVE is not a closed economy because it does indeed have “outside” sources and recipients for the stuff being generated. Most notably NPCs and things rewpawning on a timer rather than on some hard-coded input limits.
Quote:
An 'exchange rate' is not 'one item for another' -- it refers to the agreed-upon value of a given currency in a given market.
But that's just it: the ISK doesn't have an agreed-upon value. Its value varies with what you can get for it, and that varies depending on the supply and demand of both ISK and items. One is defined in terms of the other, and the other is defined in terms of the one… but both of them differently depending on where you are (and when). This is caused by the external, non-closed, sources of both items and ISK that creates fluctuations in how much a single ISK is valued. The value of the ISK has most certainly changed over time.

The only fixed exchange rate in EVE is the PLEX, which can be exchanged for 30 days or 3500 AUR.
Quote:
If you take the time to read the paper to which I linked earlier, you'll find a very well-written explanation of how an MMO's closed economic system operates. Ultima Online, World of Warcraft, and EVE online -- in fact, any MMO -- is a closed economic system.
Read it again: UO was a closed economy, which is why that economy failed. They had to open it up and decouple the input from the output to simulate an “outside” and thus create a simulacrum of an open economy. EVE was built from day one to have that kind of outside simulation and not feature any closed loops, which made it an open economy from the very beginning.
MeestaPenni
Mercantile and Stuff
#55 - 2011-11-06 03:58:30 UTC
Astrid Stjerna wrote:

In short, players hoarded both gold and items, and (since there were very few money sinks initially) the economy collapsed.


This has been, in a nutshell, my entire point.

I am not Prencleeve Grothsmore.
MeestaPenni
Mercantile and Stuff
#56 - 2011-11-06 04:00:44 UTC
Tippia wrote:
One is defined in terms of the other, and the other is defined in terms of the one… but both of them differently depending on where you are (and when).


Holy smokes....I think Tippia is trying to divide by zero.

I am not Prencleeve Grothsmore.
Astrid Stjerna
Sebiestor Tribe
#57 - 2011-11-06 04:01:23 UTC
Tippia wrote:
But that's just it: the ISK doesn't have an agreed-upon value.


That's what I just said!! There is no exchange rate because there's nobody to exchange goods with....

/headdesk

And again, you've either disregarded the definition that I posted -- which I will post again -- or you're intentionally ignoring it, which is disingenuous in the extreme:

A closed economy is a self-contained economic unit that has no business or trading relations with anyone outside of that unit.

Last I checked, there's no other galaxy out there that can trade goods or do business with New Eden. Economic activity, such as the purchase and sale of goods, happens entirely within New Eden.

I can't get rid of my darn signature!  Oh, wait....
Tippia
Sunshine and Lollipops
#58 - 2011-11-06 04:10:05 UTC  |  Edited by: Tippia
Astrid Stjerna wrote:
That's what I just said!! There is no exchange rate because there's nobody to exchange goods with....
Except that there is someone to exchange goods with: the simulated outside world.
Quote:
And again, you've either disregarded the definition that I posted -- which I will post again -- or you're intentionally ignoring it, which is disingenuous in the extreme:

A closed economy is a self-contained economic unit that has no business or trading relations with anyone outside of that unit.
And again: you seem to disregard/ignore the how this plays out in an MMO. Go back to your article, and read it again.

In UO, they at first implemented a closed economy by having a fixed amount of resources that just travelled around and around in the system (or, rather, didn't, which was the whole problem…) — a closed loop of items and money. When this broke down, they fixed it by creating a simulated outside world that the game economy could use as an exchange partner, which made it work a bit better. EVE works on a similar, but even more elaborate principle: there is a simulated outside world that produces and consumes goods and currency and which generates fluctuations in the value of the ISK.
Astrid Stjerna
Sebiestor Tribe
#59 - 2011-11-06 04:15:32 UTC
Tippia wrote:
Astrid Stjerna wrote:
That's what I just said!! There is no exchange rate because there's nobody to exchange goods with....
Except that there is someone to exchange goods with: the simulated outside world.
Quote:
And again, you've either disregarded the definition that I posted -- which I will post again -- or you're intentionally ignoring it, which is disingenuous in the extreme:

A closed economy is a self-contained economic unit that has no business or trading relations with anyone outside of that unit.
And again: you seem to disregard/ignore the how this plays out in an MMO. Go back to your article, and read it again.

In UO, they at first implemented a closed economy by having a fixed amount of resources that just travelled around and around in the system (or, rather, didn't, which was the whole problem…) — a closed loop of items and money. When this broke down, they fixed it by creating a simulated outside world that the game economy could use as an exchange partner, which made it work a bit better. EVE works on a similar, but even more elaborate principle: there is a simulated outside world that produces and consumes goods and currency and which generates fluctuations in the value of the ISK.



Simulated....what? EVE's economy is entirely player-driven. If you see an item on the market, a player has made or purchased that item. The items on the market are all being transferred between real people, and they don't leave New Eden.

You are trying to divide by zero, and my brain is trying to crawl out through my ears because of this discussion....

I can't get rid of my darn signature!  Oh, wait....
Covert Kitty
SRS Industries
#60 - 2011-11-06 04:20:37 UTC
Quote:
This is not a 'real' economy. It wasn't too long ago that EvE advertised a special deal on PLEX. With a couple of hundred dollars it was a simple process to suddenly inflate a wallet by 5,000,000,000 ISK;


Suddenly, by selling the plex to another player who made that isk in game.... PLEX has nothing to do at all with the volume of isk in the game, it is not a sink or a faucet.