Market Discussions

Care to try and prove that? Good luck. Also stop tossing around phrases like "free capital market", sounds like a politician proposing 5,000 pages of government regulations and calling it "free trade" when real free trade is the absence of government meddling.

The capital market in Eve suffers due to trust and lack of proper means of retribution. Focus there.



You are confusing philosophies.




ISK is produced by players when players go out and shoot rats, transport NPCs goods and a few other activities. Stop thinking of ISK in its RP/Lore terms and consider what it is from a functional perspective.

Now if you want to stop rat bounties and other faucets, and replace all faucets with something else, that would be a different discussion and that may lead to some interesting conclusions. However, what you propose, with out also proposing the removal of the other faucets will not work.

Pretty much this, and its amusing that he talks about the capital market in EvE, has Bad Bobby post on his thread and he doesnt know who Bad Bobby *is*, or why he is important for any discussion of bonds in EvE.

Compared to that, him not knowing EvE already has a risk free rate of return (its zero) is pretty minor.

So wait , you want a central bank, and then are shouting that the problem is that isk is only made by a central bank?

Go to eve-search.com, go to the MD forum, search on the words stocks and the word bonds. You will find a number of proposed ideas.

And I don't care if you've spent 100s of hours doing a paper. If you can't sum up your thesis in one nice little paragraph, then I suggest make an examination of the concept known as opportunity cost and reexamine that 100s of hours. Sorry if it makes me sound like an ass, but I am not going to give any weight to vapor.

Never again make the suggestion or entertain the idea that NPCs pay interest on some risk free instrument and you'll be off to a better start. That is the main issue with your idea.



We have lore, and we have reality. in lore, rats (NPCs) are evil pirates floating around doing nasty things. In reality they are sheep waiting to be fleeced by players.

Do not confuse the lore of Eve with the reality of Eve.

Players are paid for their services, as you say. But why? Because a player spent time and effort to go do something. It may be true from a "lore perspective" that some NPC central bank some where printed up a bunch of ISK. But the reality of the situation is, the only way for that ISK to enter into the Eve economy is by some player expending time and effort.

Time is the only real commodity in Eve.

Here's an example, do asteroids pay players in veldspar? No, do asteroid belts print veldspar? No. It is simply there. The only way for players to obtain veldspar is to go spend time and effort to collect it. ISK is no different in this regard.



No one cares about NPC deficits. NPC do not pay subscriptions, they are immune to politics, they are immune to sleep. They do not matter in the grand scheme of things. NPCs do not need to feed their children. You can blow up 50,000 faction police and they won't even consider thinking about breaking a sweat.



Again, NPC do not need money, they are not thinking entities. They can make no value judgements.




When you clearly demonstrate you understand what ISK is, from a functional perspective, and I see a glimmer that you understand that money is simply the most sellable abstraction of labor in a market, then we can have further discussions.

Let's fix the misconceptions first. :)

Although I like it when the eve economy emulates the real world economy, I don't like it when it is taken out of the players hands and is controlled by CCP. I find that the stepping stone argument, till we have player controlled banks doesn't hold any credence. EVE can never have player controlled banks for the the public as a whole. No repercussions, no control and the utility of stealing the assets is always higher than keeping the bank active. The whole banking system is based on trust (heard of "bank runs"), and sadly in EVE if you trust someone you don't know, then you are playing the game wrong.

The problem of inflation is already solved by the systems of isk sinks and faucets in EVE. RIghly the npc pays them out, but you are wrong in that the npc controls them, it is actually the players that do. Because through supply and demand the players can decide what activities they want to do, and hence decide (as a collective) what the money supply rate is going to be.

Let me give you an example. Say many people are ratting (isk faucet) increasing the money supply. Now according to the rules of supply and demand isk should become "cheaper" relative to other commodities (inflation) such as moon goo, minerals etc. and by that relationship those things will become more "expensive" relative to isk. Their prices will increase, till the point that the isk/(hour/effort/risk/fun) becomes more than ratting, making more people actually mine instead of rat, reversing the previous effect, reaching an equilibrium state again. Obviously things are not perfect, because people are not perfectly rational and will still do missions instead of incursions, but the system is sufficient to keep things in a balance "range" and theoretically should deliver the intended results of keeping the money supply in balance with the various commodities in the game.

As you can see from the above example the players are the ones controlling the supply of isk relative to the commodities through the ever famous "invisible hand". This emulates the real world not by method, but by result (which is great) and leaves the supply in player hands. (the real world statement here assumes "no government' and "no central bank")

Just an addition since we are on the topic, as some insightful people have said before, EVE can never fully emulate a real world independent economy, simply because there are no means of innovation, and all forms of it are controlled and introduced by CCP, seemigly close to live overlord aliens if you like. Without innovation we will always be constrained to the range of prices CCP deems "appropriate" for the items in the game. Innovation in the real world is the main driver of the overall economy industrial revolution, the internet etc...). If CCP can introduce innovation into the game (truly an almost impossible tank, if not impossible) then they will have achieved a feat no one can equate to in the gaming industry.

And yea if you still are adamant about player controlled banks, please send me all your iskies and with the capital i'll start one asap, with 200% yearly interest rates.

And yes i did use the word "emulate" quite extensively in the post, but it just sounds nice and makes me sophisticated, so bugger off.

I agree with your statement that the Risk-free rate is zero at the moment.
This is unfortunate and a product of lacking options for players, no investor protection and ingame system mechanics.
But I believe it do not have to be like this in the future.

RL banks are not based on trust alone, so shouldn't EVE banks in the future. If we get the right credit risk settings and covenant rules and regulations, trust would only become a minor factor.

I disagree with the statement that inflation is player controlled. If CCP decided via NPCs that certain activities suddenly would pay more we would see a surge in such activities and money supply would increase substantially, creating inflation.
As you say prices go up and people start mining again but by this state the inflation have already been created and we will not see a reverse effect or deflation back to price levels before NPC payout changes.
The source of the inflation was therefore a product of NPC better payouts.

I agree with your statement on innovation lacking activities, perhaps this is another area which could be developed in the future.

What you are suggesting will inflate the money supply even more.

Your suggestion of a risk free bond will have an interest rate almost at zero. Players will bid the price of bonds up to the point where the yield covers the broker fees and taxes or what ever other silly costs are involved. So even if the NPC governments had the ability to make value judgements, near zero percent interest rates would not induce them to stop spending. Say hello to Operation Twist and QE Infinity, Mr. Bernake.

Now, let's suppose that interest rates were 50,000%. It still would not stop NPCs from spending because they are NPCs, they do not think, they can make no value judgements. In the real world, governments are spending money like crazy and central banks are finding every excuse and method to expand credit and they are supposedly rational human beings. NPCs are not people, they care about stupidity even less.

If you really want to fight monetary inflation in Eve, then pay careful attention to the points made by Joan Greywind, in this thread and listen to RAW when he says you are wrong.

Please stop taking debate lessons from Harry Forever.

I suggest that we draw up an outline of how a player-run project like this could work. We can then present it to the Mittani for consideration.

In the CCP quarterly economic newletter inflation concers have been raised in the past, but I do agree with you in most of your observations. However my suggestion of creating government securities was never meant to control inflation as primary function but merely as the step stone towards liberal capital markets. The inflation controlling element in my suggestion is however just a positive effect which CCP can use actively to manage the money supply better.