Market Discussions

The yield buff is not a buff because if changes to refining efficiency it is a counter balance and almost net 0 gain

I regret that I have but one up-vote to give. Thank you for giving me Austrian-wood. I only wish this was something that they'd actually implement.

So people still think there some rampant inflation in EVE even after it was explained in great detail how the economy has slightly deflated over the last year?
I want what you guys are smoking.

There comes a point when isk is so inconsequential, comes so easy, and more importantly fast, that outlets are needed to keep the isk from being idle. Some invest in collectors items, plex, bpos, ect. The fact of the matter is, t2 bpos print isk at absolute bare bone efforts. There's no throwing away when you look at it in a long term. That is, exactly what I was talking about. The poors perception. Way to typecast yourself.

Well … you’re a better economist than I am but I don’t think they need to estimate behaviour.

What I suspect they do is to measure the total volume of faucets and sinks and look for some kind of a ratio, a sweet spot, whereby the inflationary forces and the deflationary forces more or less balance out. I think you can boil down the whole EVE economy into one number and two indicators.

To me, I think this was done for game play reasons, not for economic reasons. Why?

1) Profit margins won’t change. The reason I think this is because supply is already much higher than demand pretty much across the board and profit margins are more or less stable. This happens because inventories can continue to grow indefinitely and there is no need to go to market. We’ve seen from some ships, for example, that total inventories outstrip demand by years, not days, as one might think by just looking at the market.

2) Increases in supply will be irrelevant. The bottle neck in copy/invention slots had already been tackled by producers. The new bottle neck will become the number of slots a producer can run 24/7. However, since the biggest/serious producers were already running at nearly full manufacturing capacity, any increase will have to come from newcomers, who I don’t think will suddenly start to produce in large volumes if they weren’t already doing so. There will be newcomers but this system will only change *when* they enter as a producer, not *if* they enter.

3) Some Inflation may change. This approach gives CCP a “dail” that they can turn in order to create (or reduce) cost push inflation. Demand inflation is and always will be very limited in EVE because there is no shortage of anything. This technique gives CCP a way to increase/decrease costs of items across the board without having to tune the input requirements of every individual item on the market. Very handy. This could be seen as an economic reason but practically what it does is free up CCP resources to focus on other priorities.

"What do you think this will do the overall economy?"

If you look at recent slides of Dr Enjo you will notice that CCP is very satisfied of the current inflation rates of the economy. Also the balance of ISK in and out is good. The outage on dormant accounts is not (publicly) tracked by CCP though. But overal, no big changes are expected, the outflow ratio by industry will be monitored in this bigger picture and no new sinks were required according to last Fanfest information discussions.

In the current economy block-forming and ISK projection (as in power projection) is a problem in its own, but the nature of the beast (the sandbox). Studies always show block-forming creates and advantage over non-blocks. Recent OTEC ways showed this. Also the blue doughnut fears come from this side of the game.

Within a discussion on Fanfest I brought up that EVE economy has a few problems if compared to normal markets; there is no decay in products and no branding with the market tree. The 3 steps as mentioned above, by another player, to new equilibrium's would have a complete other time-frame / traction within a RL situation. If a brand would throw in a campaign to crumble opposition, - by marketing spending, not by specifically price manipulation, while they can be used both in a campaign -, the market steps as described would have another form completely. In EVE there is no decay or branding risk. You can just sit on stock forever, and just have "expansion- risks". When CCP makes changes within the end-usage of products. Besides that, you will make your isk back, sooner or later.

The risk we have to deal with in EVE, is supply chain risks. Think expenditures locked up in the supply chain, including security deposits by several parties. The securities are not marketable in EVE, however, some people tried and failed (excl corp / alliance based schemes). Most securities in EVE are in the form of stocks for production, spare parts in tech II and tech III production. This all is in the "material handling" side of things. Other stocks are kept in the end of the supply chain, this is called "physical distribution" part of the supply chain. The point of disconnect is something carefully managed in real life due to decay and physical stock-related risks (fire, floods, rent, currency-changes, etc). Due to the fact that EVE has no decay, another kind of stock is around, speculation stock, this stock is not represented in most RL market analysis formula's. There are some huge speculations out there in the world economy, but most ended in huge fiasco's (Google the coffee markets for example, or olive oil). As to your T1 question, the T1 industry is a to small part of the pie in EVE to give predictions without talking the bigger picture.

Small sidestep; "Costs and time requirement for ME/TE research increased significantly. Will this make it harder for new players to enter the market?". No, you can simply differentiate to more facilities. This is a logistics issue, not an ISK issue. You will just have to factor the ISK need into the overall product pricing. If you can dominate the market by numbers (in orders, TTM or speculation power), the ISK investment for a more diverse entree trace wont be an issue.

In EVE most production is located in continuous high-sec (if I remember correctly, about 80%, Pareto effect.), and a small part in non continuous high sec. The team distribution between those regions will have a certain effect on supply chains, but mostly based on pricing of teams due to auction block powers. The power-projection by big entities will rival with certain industrial's. The struggle between this price differentiation will introduce new distribution paths, replacements of stock locations and block strategies (big and small), also in play, the TTM (see blueprint thread). Smaller unique bidders maybe will team up over time to get in decent bidding range against power blocks. They will need to share market info though, and in EVE all market info is (semi-)public, but to quote Person of Interest; "but what are you doing with that information?".

That is were diplomacy and connections will come in. If blocks would start a shared production program, somewhere in their controlled regions, like OTEC, say a bidding pact (OBEC?) and they could leverage the shared interest against an non-organized high-sec industrial zone. Maybe OBEC could even dictate a price-range that is lower as average, due to simple power play. If you have a monopoly, no-one will compete. You can fix price rates on all teams outside of non-block ranges and then simply auction them of within the block, without loosing cost for the teams, the internal auction winner will simply place the winning bet on the auction and no-one will inter-fear, due to simple ISK shortages. This long time play will have consequences in pricing that cannot be projected at this moment in time, since we have simple to little information.

"Interesting times ahead" - Dr Enjo.