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The "Opportunity Cost" Meme has to end.

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Author
Zet Soirn
Soirn Enterprises
#21 - 2016-04-15 14:33:26 UTC
Xylem Viliana wrote:
In the end though it comes down to the individual, do you want to mine build etc and follow the process from rock in space to completed article sold on the market or is it just the money you want, everyone finds their groove.


Yes. It all boils down to realizing that the term "Opportunity Cost" might be misleading, because it can be interpreted in two ways. One is wrong, and the other makes sense. I think it should be simply referred to as "Time Cost" or "Time Management".
Steve Ronuken
Fuzzwork Enterprises
Vote Steve Ronuken for CSM
#22 - 2016-04-15 14:35:01 UTC  |  Edited by: Steve Ronuken
Your friend is, indeed, wrong.

If you mine 6 million isk worth of minerals in an hour, you have increased your net worth by 6 million isk.

If you buy 6 million isk worth of minerals, your net worth remains static.

Now, the opportunity cost is down to what you'd do in that hour, if you were not mining. Sure, you could probably do something else, which would net you more isk. But it's not just time that's important. It's attention spent. Mining is a low attention activity. So, missions vs mining, you might have spent the same attention, for the same increase in net worth.


(The value of the minerals is set by the market. But I suspect you already know this Big smile There's just a common fallacy that 'the minerals I mine are free!' which leads to people undervaluing their assets, to make more 'profit' from manufacturing)

Woo! CSM XI!

Fuzzwork Enterprises

Twitter: @fuzzysteve on Twitter

Zet Soirn
Soirn Enterprises
#23 - 2016-04-15 14:46:13 UTC  |  Edited by: Zet Soirn
ISD Fractal wrote:
Zet Soirn wrote:
I was commenting on his logic, which seemed to be pointing out that mining is useless, which is false.


That's not his logic, that's your logic. He isn't saying that mining in general is useless, he's saying that spending an hour to mine the minerals you would buy anyway costs you more (time plus ISK) than if you just bought them yourself (only ISK), which doesn't make much sense.

He's not wrong in that regard. As I said, if you were dead set on mining you'd be better off spending that hour mining the most valuable ores, selling them and buying the minerals you need afterwards, leaving you with a profit.

This is treading dangerously close to the "minerals I mine are free" mindset that causes many items on the market to be sold at a price lower than it costs to manufacture them if you bought all the inputs off the market.



Don´t worry, I don´t believe that minerals I mine are free. I understand they have value and that my time has value, too.

You might be right. I might have interpreted my friend wrong, which only proves how misleading this term is or his describment was or I have simply made a mistake, when decrypting this term.
I might have neglected the value of my time, since mining is at the moment actually the best profitable thing for me, which then completely proves my point, but it also validates your point, too.
Zet Soirn
Soirn Enterprises
#24 - 2016-04-15 14:51:20 UTC
Steve Ronuken wrote:
Your friend is, indeed, wrong.

If you mine 6 million isk worth of minerals in an hour, you have increased your net worth by 6 million isk.

If you buy 6 million isk worth of minerals, your net worth remains static.

Now, the opportunity cost is down to what you'd do in that hour, if you were not mining. Sure, you could probably do something else, which would net you more isk. But it's not just time that's important. It's attention spent. Mining is a low attention activity. So, missions vs mining, you might have spent the same attention, for the same increase in net worth.


(The value of the minerals is set by the market. But I suspect you already know this Big smile There's just a common fallacy that 'the minerals I mine are free!' which leads to people undervaluing their assets, to make more 'profit' from manufacturing)


Correct, you have just summed it up all, sir. :)
Zet Soirn
Soirn Enterprises
#25 - 2016-04-15 15:32:48 UTC
If any moderators here, I think you can lock this thread, since it has outlived its potential.
Archive it, please, since someone could find their answers here.
Thanks You everyone, you were fantastic.. Absolutely fantastic.. And you know what? So was I. (cookie for everyone, who gets the reference.. :p )
Teckos Pech
Hogyoku
Goonswarm Federation
#26 - 2016-04-15 18:15:04 UTC  |  Edited by: Teckos Pech
Zet Soirn wrote:
ISD Fractal wrote:
Opportunity cost exists in all cases. I'm typing this post now when I could have been doing something else.

With regards to the situation you described, your friend isn't necessarily wrong. If you are a manufacturer, you're going to spend 6 mil on minerals regardless of whether or not you mine them or buy them. If you mine them yourself, you've now spent an hour of your time doing that when you could have been doing something else. If you weren't going to do anything else anyway, then you might be okay with that, although you still could potentially be doing something that would earn you more ISK.

Your friend's accurate point is that you need not waste an hour mining minerals when you need to value the minerals you mine at the cost you would have bought them at. Truly, the difference between mining them and buying them is the hour you spend mining them. If anything, you should spend that hour mining the most valuable ore, sell it and use that to buy the minerals you need, leaving you with a profit.

People choose to do things even if they know that they can be making more ISK doing something else, and that's okay too. For example, I PvP which loses ISK and I could certainly choose to do something else that makes ISK during that time, but I don't because I enjoy PvP. Similarly, miners mine because they enjoy it or can easily do it AFK while they do something on another screen, which answers the question of why people mine in the first place.


Yes, yes, I know.

I could do mission running and make 10mill, and then buy minerals for 6mill, which would give me an extra profit of 4mill, instead of just mining for an hour to acquire 6mill worth of resources.
This is more of a time management thing. And in my current situation, I spend my time best by mining, because I have low amount of skill points to do even lvl 3 missions.
I was commenting on his logic, which seemed to be pointing out that mining is useless, which is false.


Okay, so lets look at this. Opportunity cost says the following using your numbers:

You can mine and get 6 million ISK of minerals.

You can mission and make 10 million ISK.

The opportunity cost of mining over missioning is 4 million ISK. So, your profit calculus should be as follows:

8,000,000 - 6,000,000 - 4,000,000 = -2,000,000.

The minerals have a market value of 6,000,000 and as such are now a cost...even if you mine those minerals yourself. That you passed up the 4,000,000 net benefit from running missions instead means you lose out on the 4,000,000.

Now! And this is the important part. Your wallet WILL NOT reflect the -2,000,000. Accounting costs and economic costs are NOT the same thing. Accountants do not factor in opportunity costs. Mainly because opportunity costs may not be directly observable. Opportunity costs can be dependent on the person. For example, I hate missions. So even , though I could make 10,000,000 ISK it is simply not worth it to me to spend my free time that way.

Further, the idea that there is no opportunity cost means that by destroying property we can promote economic activity. After all, if I bulldoze your house...you'll have to build a new one. You shouldn't be mad I bulldozed your house, you should be happy! More economic activity. When a country goes into recession it should bomb itself to promote economic growth. Basically you are subscribing to the broken window fallacy.

"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."--Friedrich August von Hayek

8 Golden Rules for EVE Online

Bumblefck
Kerensky Initiatives
#27 - 2016-04-15 18:22:38 UTC
7/10 for actually getting responses.

Perfection is a dish best served like wasabi .

Bumble's Space Log

Zet Soirn
Soirn Enterprises
#28 - 2016-04-15 18:51:16 UTC  |  Edited by: Zet Soirn
Teckos Pech wrote:


Okay, so lets look at this. Opportunity cost says the following using your numbers:

You can mine and get 6 million ISK of minerals.

You can mission and make 10 million ISK.

The opportunity cost of mining over missioning is 4 million ISK. So, your profit calculus should be as follows:

8,000,000 - 6,000,000 - 4,000,000 = -2,000,000.

The minerals have a market value of 6,000,000 and as such are now a cost...even if you mine those minerals yourself. That you passed up the 4,000,000 net benefit from running missions instead means you lose out on the 4,000,000.

Now! And this is the important part. Your wallet WILL NOT reflect the -2,000,000. Accounting costs and economic costs are NOT the same thing. Accountants do not factor in opportunity costs. Mainly because opportunity costs may not be directly observable. Opportunity costs can be dependent on the person. For example, I hate missions. So even , though I could make 10,000,000 ISK it is simply not worth it to me to spend my free time that way.

Further, the idea that there is no opportunity cost means that by destroying property we can promote economic activity. After all, if I bulldoze your house...you'll have to build a new one. You shouldn't be mad I bulldozed your house, you should be happy! More economic activity. When a country goes into recession it should bomb itself to promote economic growth. Basically you are subscribing to the broken window fallacy.



NO!



Stahp, just stahp, my baby boy... Shhhhhh...

Missions:
(10mill - 6mill) + 2mill (ship margin profit) = 6 mill

Mining:
(6mill(mined ore)+2mill(margin)) - 4mill(difference in isk/time between mining and missions) = 4mill


Stop with your hocus pocus math, Jesus.

This is getting outta hand.

You can´t count 10mill from missions as positive and then right away count 6mill from mining as negative.

GODDAMN!
Caleb Ayrania
TarNec
Invisible Exchequer
#29 - 2016-04-15 18:59:22 UTC
This thread is a popcorn thread!
Cassandra Masami
Stratotech Industries
Intrepid Crossing
#30 - 2016-04-15 19:08:14 UTC
I've found the best way of describing "Opportunity Cost" is this:

What did you give up in order to do what you just did?

If what you gave up is more valuable than what you actually did, then it could be argued to have been a poor choice. But when determining something's value, remember it's not just the quantitative things like ISK per hour. Value can be more subjective, like learning and understanding the entire process, relaxation (mental health), or just about anything else.
Zet Soirn
Soirn Enterprises
#31 - 2016-04-15 19:10:34 UTC
Cassandra Masami wrote:
I've found the best way of describing "Opportunity Cost" is this:

What did you give up in order to do what you just did?

If what you gave up is more valuable than what you actually did, then it could be argued to have been a poor choice. But when determining something's value, remember it's not just the quantitative things like ISK per hour. Value can be more subjective, like learning and understanding the entire process, relaxation (mental health), or just about anything else.



I prefer not to delve into these almost philosophical views on this matter.

Just keep it simple.

It simply is "TIME MANAGEMENT".

I could spend my time better and make more profit, but I didn´t and made a bit less profit, but I have still made a profit.

Simple, fresh, beatiful.
Thoraemond
Far Ranger
#32 - 2016-04-15 19:11:28 UTC
Zet Soirn wrote:
To my surprise, my Vet friend introduced me to an "Opportunity Cost" term, which I believe has no logic and has to crumble on itself.

Your friend may not have helped you understand the term, but it's a basic concept and there are plenty of helpful definitions available, e.g., http://www.investopedia.com/terms/o/opportunitycost.asp or https://en.wikipedia.org/wiki/Opportunity_cost.


Zet Soirn wrote:
Yesterday, I asked my friend about the "Opportunity Cost" and if it is profitable to mine your own ore for less resource demanding manufacturing projects.


Based on your question, it looks like you had already heard of the concept of "opportunity cost", but didn't understand it. Your question builds in two elements that make it hard to give a simple "yes or no" answer.


First, whether or not mining is itself at all profitable is not determined by any opportunity cost. Opportunity cost is about discounting that profit by other profits that you could have earned using the same inputs (here, apparently, ISK and time). That is, asking "if it is profitable to mine your own ore" allows for a "yes" even when the profit is pitiful.

For example, mining for an hour may yield 6 million ISK-worth of minerals at a cost of one hour and zero ISK. Let's call that a profit.

The concept of opportunity cost then says: well, what else could you have obtained with a cost of one hour and zero ISK? If any of those other things would get you something more valuable than 6 million ISK-worth of minerals, then the difference between the profit you could have obtained and the profit you did obtain is the opportunity cost. So if, for the sake of argument, you could have run missions for almost an hour and then bought 6 million ISK-worth of minerals with your income and still had 10 million ISK left over, then that 10 million ISK is the opportunity cost when you choose to mine instead (amongst those two options).

Note that the 10 million ISK foregone doesn't eliminate the 6 million ISK-worth of minerals, it just means you could have had more than just the minerals.


Second, you asked about the situation "for less resource demanding manufacturing projects". The concept of opportunity cost applies to projects of any size, and will apply regardless of whether you're talking about a frigate or a titan. You cannot escape it, though you may decide certain numbers don't matter to you. That said, the other options in the contemplation of opportunity cost must at least be available.

So, for example, if it's just impossible for me to mine enough minerals to build a titan, I cannot consider mining all the minerals as an alternative to other activities when assessing those activities for their contribution toward my goal.

Also, preferences are important, especially in New Eden. If I hate running missions and I like mining, that might be an important (and hard to quantify) variable as well. In the example above, maybe I will only spend 15 minutes running missions, not an hour... that's only 4 million ISK in that example, so not enough that I can get the 6 million ISK-worth of minerals I want.... but I do still have 0.75 h left for mining!


Zet Soirn wrote:
You guys don´t realize that [...]
Stop using those accounting schemes [...] that don´t apply to EvE at all.
I have nothing against Vet players, I love you guys, but your reasoning behind "Opportunity cost" just don´t sit well with me.

Your friend may not understand the concept, but that doesn't mean it fails to apply to New Eden. It's a concept that arises from having options about how resources (like time and ISK) are used in activities, and having goals can be furthered different amounts by different activities. It's thus a concept that has extremely common applicability, and well-recognized analogues in fields beyond economics and investment, e.g., in biological systems.
Zet Soirn
Soirn Enterprises
#33 - 2016-04-15 19:16:47 UTC  |  Edited by: Zet Soirn
Thoraemond wrote:
Zet Soirn wrote:
To my surprise, my Vet friend introduced me to an "Opportunity Cost" term, which I believe has no logic and has to crumble on itself.

Your friend may not have helped you understand the term, but it's a basic concept and there are plenty of helpful definitions available, e.g., http://www.investopedia.com/terms/o/opportunitycost.asp or https://en.wikipedia.org/wiki/Opportunity_cost.


Zet Soirn wrote:
Yesterday, I asked my friend about the "Opportunity Cost" and if it is profitable to mine your own ore for less resource demanding manufacturing projects.


Based on your question, it looks like you had already heard of the concept of "opportunity cost", but didn't understand it. Your question builds in two elements that make it hard to give a simple "yes or no" answer.


First, whether or not mining is itself at all profitable is not determined by any opportunity cost. Opportunity cost is about discounting that profit by other profits that you could have earned using the same inputs (here, apparently, ISK and time). That is, asking "if it is profitable to mine your own ore" allows for a "yes" even when the profit is pitiful.

For example, mining for an hour may yield 6 million ISK-worth of minerals at a cost of one hour and zero ISK. Let's call that a profit.

The concept of opportunity cost then says: well, what else could you have obtained with a cost of one hour and zero ISK? If any of those other things would get you something more valuable than 6 million ISK-worth of minerals, then the difference between the profit you could have obtained and the profit you did obtain is the opportunity cost. So if, for the sake of argument, you could have run missions for almost an hour and then bought 6 million ISK-worth of minerals with your income and still had 10 million ISK left over, then that 10 million ISK is the opportunity cost when you choose to mine instead (amongst those two options).

Note that the 10 million ISK foregone doesn't eliminate the 6 million ISK-worth of minerals, it just means you could have had more than just the minerals.


Second, you asked about the situation "for less resource demanding manufacturing projects". The concept of opportunity cost applies to projects of any size, and will apply regardless of whether you're talking about a frigate or a titan. You cannot escape it, though you may decide certain numbers don't matter to you. That said, the other options in the contemplation of opportunity cost must at least be available.

So, for example, if it's just impossible for me to mine enough minerals to build a titan, I cannot consider mining all the minerals as an alternative to other activities when assessing those activities for their contribution toward my goal.

Also, preferences are important, especially in New Eden. If I hate running missions and I like mining, that might be an important (and hard to quantify) variable as well. In the example above, maybe I will only spend 15 minutes running missions, not an hour... that's only 4 million ISK in that example, so not enough that I can get the 6 million ISK-worth of minerals I want.... but I do still have 0.75 h left for mining!


Zet Soirn wrote:
You guys don´t realize that [...]
Stop using those accounting schemes [...] that don´t apply to EvE at all.
I have nothing against Vet players, I love you guys, but your reasoning behind "Opportunity cost" just don´t sit well with me.

Your friend may not understand the concept, but that doesn't mean it fails to apply to New Eden. It's a concept that arises from having options about how resources (like time and ISK) are used in activities, and having goals can be furthered different amounts by different activities. It's thus a concept that has extremely common applicability, and well-recognized analogues in fields beyond economics and investment, e.g., in biological systems.



Thanks for the response.

The term "Opportunity Cost" is slightly misleading and there are tons of different interpretations all around New Eden.

Just keep it simple.

It simply is "TIME MANAGEMENT".

I could have spent my time better and make more profit, but I didn´t and made a bit less profit, but I have still made a profit.

Simple, fresh, beatiful.
Thoraemond
Far Ranger
#34 - 2016-04-15 19:29:19 UTC
Zet Soirn wrote:
The term "Opportunity Cost" is slightly misleading and there are tons of different interpretations all around New Eden.

Now that you understand the concept, you can help other people understand it. The links I provided are web search results: there's no secret in what this concept means, and it's not an "EVE thing". Or just link people here, even.

You could start with your friend!


Zet Soirn wrote:
Just keep it simple. It simply is "Time Management". I could spend my time better and make more profit, but I didn´t and made a bit less profit, but I have still made a profit. Simple, fresh, beatiful.

It may be quixotic to try to convince people to use an alternative term like "Time Management" when there is an existing, widely-used basic economic concept that applies, and which directly explains a key mistake that many rookies make when trying to optimize their activities toward some goal in New Eden: "Opportunity Cost".

Also, why stop your simplification there? How about "Management"? Or even just "make decisions better"?
Teckos Pech
Hogyoku
Goonswarm Federation
#35 - 2016-04-15 19:35:56 UTC
Zet Soirn wrote:



NO!



Stahp, just stahp, my baby boy... Shhhhhh...

Missions:
(10mill - 6mill) + 2mill (ship margin profit) = 6 mill

Mining:
(6mill(mined ore)+2mill(margin)) - 4mill(difference in isk/time between mining and missions) = 4mill


Stop with your hocus pocus math, Jesus.

This is getting outta hand.

You can´t count 10mill from missions as positive and then right away count 6mill from mining as negative.

GODDAMN!


You are quite simply wrong. Let's assume you have 10 million ISK already. You mine and get 6 million ISK in minerals. Your wealth: 16 million ISK of minerals. You build and sell the ship, but you have to use your minerals. Your wealth: 18 million ISK. Selling the ship, nets you 2 million in profits over and above what you already had in terms of your wealth.

Now, similar calculations with buying minerals....

You buy 6 million IS of minerals. Your wealth is 10 million ISK. You build and sell the ship, but you have to use your minerals. Your wealth: 12 million ISK. Selling the ship nets you 2 million profits. Selling the ship, nets you 2 million in profits over and above what you already had in terms of your wealth.

In both cases, making and selling the ship nets you 2 million ISK in profits. In the first case you also increased your wealth by mining. Opportunity cost, contrary to your claims, does not imply mining is pointless or does not increase your wealth in game.

Think of it this way....

You can go mine the minerals yourself....which is a cost. Or you, you can pay somebody else to do it....which is a cost. If you are mining you are not doing something else. That is the essence of opportunity cost. That when you make a choice, the opportunity cost is the net benefit of the other activity you could have chosen, but did not.

"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."--Friedrich August von Hayek

8 Golden Rules for EVE Online

Zet Soirn
Soirn Enterprises
#36 - 2016-04-15 19:36:03 UTC
Thoraemond wrote:
Zet Soirn wrote:
The term "Opportunity Cost" is slightly misleading and there are tons of different interpretations all around New Eden.

Now that you understand the concept, you can help other people understand it. The links I provided are web search results: there's no secret in what this concept means, and it's not an "EVE thing". Or just link people here, even.

You could start with your friend!


Zet Soirn wrote:
Just keep it simple. It simply is "Time Management". I could spend my time better and make more profit, but I didn´t and made a bit less profit, but I have still made a profit. Simple, fresh, beatiful.

It may be quixotic to try to convince people to use an alternative term like "Time Management" when there is an existing, widely-used basic economic concept that applies, and which directly explains a key mistake that many rookies make when trying to optimize their activities toward some goal in New Eden: "Opportunity Cost".

Also, why stop your simplification there? How about "Management"? Or even just "make decisions better"?



Since you have acknowledged, that there are people that don´t understand the concept properly, I believe a some kind of simplification of the term should occur.
There are even Vets, that don´t know how to do the math correctly on this matter. They throw the numbers around like bananas and confusing rookies while at it. It´s insane.

I said simplification, not over-simplification. The term "Management" is vague and so is "Make decisions better".
I believe you understand that pretty well, no need to be passive-aggresive about that, sir.
Zet Soirn
Soirn Enterprises
#37 - 2016-04-15 19:41:30 UTC  |  Edited by: Zet Soirn
Teckos Pech wrote:
Zet Soirn wrote:



NO!



Stahp, just stahp, my baby boy... Shhhhhh...

Missions:
(10mill - 6mill) + 2mill (ship margin profit) = 6 mill

Mining:
(6mill(mined ore)+2mill(margin)) - 4mill(difference in isk/time between mining and missions) = 4mill


Stop with your hocus pocus math, Jesus.

This is getting outta hand.

You can´t count 10mill from missions as positive and then right away count 6mill from mining as negative.

GODDAMN!


You are quite simply wrong. Let's assume you have 10 million ISK already. You mine and get 6 million ISK in minerals. Your wealth: 16 million ISK of minerals. You build and sell the ship, but you have to use your minerals. Your wealth: 18 million ISK. Selling the ship, nets you 2 million in profits over and above what you already had in terms of your wealth.

Now, similar calculations with buying minerals....

You buy 6 million IS of minerals. Your wealth is 10 million ISK. You build and sell the ship, but you have to use your minerals. Your wealth: 12 million ISK. Selling the ship nets you 2 million profits. Selling the ship, nets you 2 million in profits over and above what you already had in terms of your wealth.

In both cases, making and selling the ship nets you 2 million ISK in profits. In the first case you also increased your wealth by mining. Opportunity cost, contrary to your claims, does not imply mining is pointless or does not increase your wealth in game.

Think of it this way....

You can go mine the minerals yourself....which is a cost. Or you, you can pay somebody else to do it....which is a cost. If you are mining you are not doing something else. That is the essence of opportunity cost. That when you make a choice, the opportunity cost is the net benefit of the other activity you could have chosen, but did not.



Doesn´t mean I am wrong. You are just saying, what I have pointed out in post before.
Teckos Pech
Hogyoku
Goonswarm Federation
#38 - 2016-04-15 19:49:33 UTC
Zet Soirn wrote:
Cassandra Masami wrote:
I've found the best way of describing "Opportunity Cost" is this:

What did you give up in order to do what you just did?

If what you gave up is more valuable than what you actually did, then it could be argued to have been a poor choice. But when determining something's value, remember it's not just the quantitative things like ISK per hour. Value can be more subjective, like learning and understanding the entire process, relaxation (mental health), or just about anything else.



I prefer not to delve into these almost philosophical views on this matter.

Just keep it simple.

It simply is "TIME MANAGEMENT".

I could spend my time better and make more profit, but I didn´t and made a bit less profit, but I have still made a profit.

Simple, fresh, beatiful.


But that IS the issue with opportunity cost. That is pretty much the definition anywhere you look

Microeconomics, by Walter Nicholson, Fifth Edition, page 812,

Quote:
Opportunity cost doctrine The simple, yet far-reaching, observation that the true cost of any action can be measured by the value of the best alternative that must be forgone when the action is taken.


As ISD Fractal noted, opportunity cost is everywhere. It never is not there. Any time you take and action it applies. And how we value things is subjective. I like to eat stinky tofu. You probably don't. So I put a higher value on stinky tofu than you probably would. This observation does not make either of us right or wrong.

"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."--Friedrich August von Hayek

8 Golden Rules for EVE Online

Thoraemond
Far Ranger
#39 - 2016-04-15 19:51:54 UTC
Zet Soirn wrote:
[T]here are people that don't understand the concept properly, I believe a some kind of simplification of the term should occur.

"Time Management" is not a magically easier-to-understand alternative term for the concept of opportunity cost... it is a different concept.

If the problem is that some people don't yet understand something, surely the better solution is to help people understand it, rather than to explain a different concept to them? Or worse, mis-labelling an existing concept (e.g., defining "opportunity cost" but under the label "time management").


Zet Soirn wrote:
I said simplification, not over-simplification. The term "Management" is vague and so is "Make decisions better".

I hope you got my point, but I'll spell it out: "Time Management" is itself an over-simplification.
Teckos Pech
Hogyoku
Goonswarm Federation
#40 - 2016-04-15 19:58:48 UTC
Zet Soirn wrote:

I will start with an anecdote. Yesterday, I have asked my friend about the "Opportunity Cost" and if it is profitable to mine your own ore for less resource demanding manufacturing projects.
He said "no". His argumenting was following "If you paid for ore/minerals on market, you have paid 6 million ISK (example). Now, if you mined your own ore, you have paid 6 million ISK and one hour(of mining)."
I was surprised and also deeply disturbed by this logic, which would mean, that there is no point in mining at all. By that logic, miners wouldn´t make any money selling their ores. But they do, right?


And I'll say that mining is not a waste of time if that is what you like to do. If mining and building stuff is your thing in game...go for it. It is not wrong in that we all have different preferences. As I indicated I do not like running missions.

I have made the argument that while many argue mining is boring and needs a revamp....that maybe it doesn't. Mining tends to be a low attention activity. You can, for example, mine and watch Netflix or a DVD. You can get on comms and chit-chat with buddies. If you have the luxury of connecting while working you could work and earn RL ISK and mine.

So in that regard I'd say your friend is wrong.

"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."--Friedrich August von Hayek

8 Golden Rules for EVE Online

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