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PLEX price intervention. How?
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Antihrist Pripravnik
Cultural Enrichment and Synergy of Diversity
Stain Neurodiverse Democracy
#1 - 2014-06-25 15:33:44 UTC
During the economy presentation at this year's Fanfest, there was an interesting claim that CCP have intervened on the PLEX market. Here's the video link: http://www.youtube.com/watch?feature=player_detailpage&v=w2hsqEvPGWQ#t=1216

Without getting into the actual price of PLEX, as this has been already discussed many times before, I'd like to discuss about the intervention itself. Not much has been revealed in the presentation itself about what the actual intervention was and that makes it a good subject for discussion. It's like a puzzle and I like solving puzzles.

So, what we know from the video:
- prices were stabilized effectively with the intervention;
- It's not a long term solution;
- the volume of the PLEX sold has not increased during the intervention.

The last point means that the intervention is likely not connected to CCP dumping their own PLEX, since the artificial supply of under valued PLEX would be noticed and the volume traded would go up.

I'm curious to know what mechanism was used and if it's done by using in-game tools, tools they have as developers of EVE or by social engineering. Whatever was done, it was done in plain sight because market obviously reacted in a desired direction. I just can't find the clues of what exactly was done.

So... any clues? Ideas?
Evil Brock Nelson
#2 - 2014-06-25 16:07:22 UTC
As previously done before on the Chinese server, CCP has a stock of PLEX in their reserve in one of the NPC bank and simply just put it on the market.
Nex Killer
Perkone
Caldari State
#3 - 2014-06-25 18:42:39 UTC
CCP could have a tool that would, lets say fulfill every other buy order that is placed on the market at the time and people in the sell orders see that their plex isn't selling so they lower their price and once the price gets to a point CCP likes they turn off their black magic.
Claire Voyant
#4 - 2014-06-25 19:59:25 UTC
It would require going back a few years of fanfest videos, but I think it was definitively stated by Dr. E that the interventions are selling PLEX on the market that have been seized from banned accounts.

How that takes place is pure speculation, but my guess is that they want to disguise the seller so they use a regular player account character (not a CCP character or NPC sell orders.) No coding is required.
Vaerah Vahrokha
Vahrokh Consulting
#5 - 2014-06-25 20:08:57 UTC  |  Edited by: Vaerah Vahrokha
Antihrist Pripravnik wrote:
During the economy presentation at this year's Fanfest, there was an interesting claim that CCP have intervened on the PLEX market. Here's the video link: http://www.youtube.com/watch?feature=player_detailpage&v=w2hsqEvPGWQ#t=1216

Without getting into the actual price of PLEX, as this has been already discussed many times before, I'd like to discuss about the intervention itself. Not much has been revealed in the presentation itself about what the actual intervention was and that makes it a good subject for discussion. It's like a puzzle and I like solving puzzles.

So, what we know from the video:
- prices were stabilized effectively with the intervention;
- It's not a long term solution;
- the volume of the PLEX sold has not increased during the intervention.

The last point means that the intervention is likely not connected to CCP dumping their own PLEX, since the artificial supply of under valued PLEX would be noticed and the volume traded would go up.

I'm curious to know what mechanism was used and if it's done by using in-game tools, tools they have as developers of EVE or by social engineering. Whatever was done, it was done in plain sight because market obviously reacted in a desired direction. I just can't find the clues of what exactly was done.

So... any clues? Ideas?


It's very complicated to explain even if it's a very simple market mechanic.

All CCP had to do is to:

- use an unknown / throwaway NPC alt

- wait for an upswing in price to reach a certain value

- the best certain value for this "trick" is to wait for price to reach a trend line (PLEX was in uptrend since a long time) during an upswing or for price to hit a resistance level (this mechanism can be used in several scenarios). It works best when volumes at that value thin out.

What happens when price acts like that and volumes thin out? That the market becomes fragile. This phenomenon is called "exhaustion" and happens in RL markets as well.

- at this point, the market is susceptible to crashes. With a small amount of stock injected at that point one may basically cause a ripple / snowball effect: thin volume means even that small stock will make price drop fast and this causes small traders to panick and dump their stock. This in turn usually causes a small buyout from "dip buyers" but the market was stretched already so the buyout only creates a second "top". At this point CCP injects a very small additional amount of stock and the double top mechanic starts: price drops, sometimes (depends on tons of factors) very hard. In certain cases it's even possible to predict where price is going to go from there.


Replace CCP with "medium to large market actor" and you see this also happens in RL markets.

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