Market Discussions

I recently had a personal conversation with a big GTC seller and that person is very concerned GTC sales will dry up without incentives. I won't reveal my friend's name. I am honourable so I will keep it secret, as is the tradition anyway with dealings with GTC sellers.

After checking the sources i have another concern (i might not have understood all the fine point on this CCP ban though as im not a native english speaker)

But wouldn't it be possible for example for somer (or any other company) to for example instead of offering blink credit offer their other currency like tokens, and open a lot of other ways to spend them more closely related to the normal blinks in a way that people would have arround the same chance of cashing out ISK the same way as they currently do??

wouldnt this bypass the CCP ban and allow them to currently do exactly what they do atm?

I agree with the premise, it is a result of monetary inflation. However sinks are not the answer and reduced ISK pay outs on missions and bounties is only part of the answer. More distinct divisions of labor and more industrial specialization are the answer.

If the overall level of ISK is reduced, by the same monetary level argument, we can conclude that prices will drop, this however will not alter the impetus to resort to ISK faucets.

What matters is the relative value of activities such as mining, industry, PI, PVP and PVE compared to one another. How much real relative wealth is created and/or collected by each of the different activities. The activity with the highest relative value will tend to attract the most players.

Suppose mission rewards and ISK paid on rat bounties are reduced. All this does is reduce the ISK inflows. What does this do to prices? It should, in general, reduce prices. But does this reduction in prices change the behavior of players?

If the amount of ISK paid out for mission rewards and rat bounties were to decrease, reduce monetary inflation, then we would expect a reduction in prices. This reduction in prices also impacts the other activities. So despite having reduced ISK pay outs, the mission runner still collects rat loot and salvage. The relative value of mining and industry and PVP (pirating primarily in this case) are still lower.

If on the other hand missions/rats were to drop no salvage and no loot, then activities that generate loot, mining and salvage will increase in value relative to shooting rats. As these other activities increase in value, less ISK will flow into the economy, since those activities are not ISK faucets.

The biggest problem with the Eve economy is that, shooting rats generates too many kinds of rewards. If the other activities were allowed to come to parity, in terms of time:wealth pricing, with shooting rats, then the incentive to do those activities would increase. As more people do those activities, the flow of ISK into the economy would reduce. A natural equilibrium would then be more obtainable by using the ISK faucet screw as it relates to rats.

All of this is tangential to Raw's op, so perhaps a different thread is in order.

First, and as brief as possible, Eve is not the real world. There is no conservation of mass or energy (not that RL fiat central bank notes know any such limits). As such, we can't always equate the real world with Eve. In an effort to skip five paragraphs of the evils of central planning, I'll ask a question:

"This would allow to truly have an EvE Central bank dispensing new ISK only when needed"

Who decides when it is needed? CCP? A small group of people deciding for everyone else what is and is not the value of a unit of ISK?

What I suggest is let the 'free market' decide by separating out ISK faucet activities to their own distinct activity.

If there is too much ISK, other prices will rise to the point where the ISK faucet activity is not as attractive as the other activities. Those activities will get more attention, and the ISK faucet activity will get less, there by slow the ISK faucet. Until, once again prices go down enough to make the faucet attractive again. In this way the players, the free market, decides the rate of inflation or deflation.

Doc E (and the rest of the Eve Econ Staff), who with all due respect, can never know what the price of anything should be at any one time, much less the multitude of value judgements thousands of players make day to day and moment to moment. Relative value of time and effort is what matters, not the positivist claims made by limited models, which are at best guesses, concocted by a small group of imperfect humans who can never have perfect knowledge.

The current muddy collection of professions in Eve, with its mixed rewards and overlaps, is what encourages the strong arm of CCP with regards to faucets and sinks. Instead of allowing the market to find its own values, CCP is forced to interfere because its own previous assumptions on relative value, such as how much loot does a rat drop, are wrong.

If CCP would clean up the economic landscape, by not mixing reward types, the market would be allowed to find its own balance, and the question of too much or too little monetary inflation would be self correcting.

I believe there is a strong belief within the Eve community that the rate of inflation is a sign that their is an imbalance in the amount of isk coming into the game v going out of it.

An interesting thought experiment would be to think about what action CCP could take to make buying GTCs more attractive. We are all focused on the demand side of the equation. Is there something on the supply side that can be done? We have seen the effects of Somer and others to add incentives and CCP to create sales. Both have helped keep the prices of PLEX down.

Is there something else CCP can do to make more people want to buy PLEX?

Show me where I said there was a problem with prices. Oh that's right, you can't because I didn't.

Strawman much?

But what if CCP is so focused on PLEX prices being low, thus protecting the value of isk, that isk is actually a solid currency? What if CCP is so obsessed with not causing inflation that the economy is in deflation?

There's a number of issues in your reasonment.

First of all, this is not a free market as it's created with precise design features, balance and constraints.
When they actually fail imposing stringent sanity checks and constraints, it's just a matter of time before some player takes huge advantages before the "hole" is closed. I will spare you the copious examples of such "oops moments" EvE had in old and recent past.
Another proof is in the pudding: check the primary EvE markets. Despite they share some rules and (lack of) liquidity often seen in RL stocks, the EvE markets tend to move within quite limited ranges. It's quite rare to see a 2-3 years old+ EvE market with variations of 1000% like you can see in some stocks and this is also why station trading works so well. Swing trading in EvE is harder than in RL as prices are generally compressed into tighter bands while in RL they can trend a lot more or longer.

The only EvE market that is showing some "reality influence" is actually the one that is really somewhat influenced by RL (cash): PLEX. Look what a rising PLEX trend is doing, compared to the utter normality an even longer trend would be looked at for a RL security.


Second thing, you assume that the markets would self regulate and select the winner activities which in turn would cause competition among the participants and basically create a stabilizing, negative feedback mechanism.

This is not so. In a permanently rising ISK mass, selection indeed happens but only to pick the most "min maxed" ISK farming activity. Yet even the worst is still going to inject a positive cash flow in the system. It's just due to the nature of ISK faucets, the best and the worst still bring in fresh ISK. This causes a destabilizing, positive feedback mechanism where the only degree of freedom consists in picking a more or less efficient way to create untold amount of ISK.

Furthermore, the very nature of some of those ISK faucets prevent competition from even regulating between them.
Have 10, 100 or 1000 L4 missioneers grind ISK: the system will still print almost as much ISK for each of them.
Same for other forms of PvE.

The only competition - as I said above - would be betweeen i.e. doing min maxed incursions vs L4. People could indeed naturally switch over incursions, but incursions would just worsen the ISK creation. Sticking with L4 would still lead to the same ISK creation, just slower.

Finally, the effect of ISK inflation: I have recently played a MMO I did not play for 6 months.
Before I left, each item I crafted would net me 11 to 22 gold. I had 2500 gold in bank. Not really rich but that was a PvP game and gear did not even wear out or break on death so having mounds of gold was just pointless.

I returned back after 6 months and my same items costed from 950 to 1050 gold each! Basically had I been a regular returning player not in a top guild (just handing me the stuff), I'd immediately face a wall between me and the ability to re-acquire updated gear.
Since a portion of MMO demographics is made by the turnover created by those who return back after a while, this inflation is really a deal breaker that may easily cause long term damage.

This is an oft made argument.... I regularly return to, or create new chars in, many MMOs, most of which have OMG inflation.

It is forgotten that inflation in games works differently than IRL.

IRL I am limited by what I am paid...this gives me my buying power. (For most people, this is the case)

In a game, if an item you previously crafted was worth 22g, and now is worth 1000g, then that is often viewed as OMG Inflation.
The price of AH goods is often shown as a barrier to new players.

What is forgotten is that, in games, I am not only limited by my pay (In this case, quest rewards from NPCs). If this was the case, then, yes,new/returning players would be at a disadvantage. However...new players and returnees get drops, and can craft and collect raw materials.

What once was a green item selling for 10s, is now an item selling for 10g+, which is well beyond the budget of a new player, unless they are also selling their green drops for 10g+ each, in which case, they rapidly acquire gold.

In Eve, if the price of trit goes through the roof, then new players have access to trit sources, and, the end products will accordingly increase in price, allowing new players to benefit from selling their items on the market.
I am not convinced about inflation in eve until we see new players unable to buy their T1 ships...at present, eve is still full of players who cannot fit a BS, but can afford one well before their training for it is complete.

Why do you think minerals were pegged to fixed ratios and NPCs would buy / sell certain things? Even today where the most visible gimbal limits have been removed, the "market forces" in reality are just a very vast yet controlled environment.
A lot of control IS applied by a tiny amound of individuals who may introduce or remove PLEXes from the economy.
EvE Central bank and the various PLEX offers are just that: the game developers puppeteering a system utlimately controlled and created by THEM. Now they just have to do the same for ISK faucets: give you a credible yet artificially controlled economy. So believable you fell for it!




With this and the subsequent replies, you are pulling a Tippia on somebody (me) whose English is a self learned 3rd or 4th tongue.
I am not going to pull counter-rethorics nor I am interested into out-speaking somebody else.

Anyway, hundreds years of market behaviors show that the basic supply and demand are just a portion of a market. On top of them there's an often overhelming emotional "greed and fear" factor. So overhelming that the same item which today costs 1000 ISK, tomorrow could jump to 3000 ISK just because of a "patch leak", despite its underlying "true" supply and demand did not change a bit.






The majority of people in EvE go after what brings them the largest amount of PLEXes (to play for "free"). Far from them any intention of shelling real cash for it, they amass as much ISK as possible.

They are not going to stay subbed just because they collected gazillions of isotopes or guidance systems or whatever is the hot stuff of the moment.

Even if they went for the "I keep items for maximum wealth" one day they'd have to interact with ISK. And the less would want to interact with ISK, the more ISK would be worthless. That could easily end in a self amplifying, destructive process similar to what I have described to Rhivre.




If makes the point that both poison the economy, no matter which one is the "markets optimized winner". If that's your point then be my guest.




Dismissive reply like the others, and like them it simplifies what it shouldn't.
I have intentionally written:


"I had 2500 gold in bank. Not really rich but that was a PvP game and gear did not even wear out or break on death so having mounds of gold was just pointless."

This means:

- PvP game.
- 2500 gold in bank.
- No wear tear or breaking.


WoW:

- is not a PvP game. It's as much of a PvP game as SWTOR is, that is a farce. Yes I have played in ranked arenas, and no, that does not make it a PvP game.

- 50 gold used to be a nice WoW wallet in 2006 but today I don't even know if 2500 is anywhere close to "not really rich".

- WoW gear wears and breaks. At least it used to, for the longest years.