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CSM notes on faucets & sinks
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mynnna
State War Academy
Caldari State
#61 - 2013-01-18 00:58:54 UTC
Velocity of money seems to have an awfully minimal if not non-existent effect on inflation of non-PLEX goods in this game though. Looking at a chart of the various indices makes that abundantly clear - they're here clear back to 2003. You have a vague upward trend in all of them from say 2008 onward, but it's pretty explainable: The primary producer index includes things like moon goo which has had a tumultuous but generally upward rise (first focused on dyspro/prom and then on tech) which is reflected in the secondary PPI (which includes things like the components built from those moon minerals). Large rises or falls are often significant events - the effect of removal of drone regions on minerals in 2013, the rise and subsequent collapse of the PPI as dyspro/prom rose in value and then were nerfed (and subsequent re-rise and fall as tech rose and was nerfed), etc.

If there's any real inflationary effects there, they're lost in the noise.

Member of the Goonswarm Economic Warfare Cabal
Debra Tao
Perkone
Caldari State
#62 - 2013-01-18 01:30:37 UTC
I totally agree on the fact that velocity of the money is n't a big factor right now if it is a factor at all. But FW is, i think, a pretty good example of the effect. Large sum of money usually in the wallet of traders quickly changing hands...
mynnna
State War Academy
Caldari State
#63 - 2013-01-18 01:39:01 UTC
Yes, but it didn't really have any effect on non-PLEX commodities, or if it did that effect was buried under everything else (rise and fall of minerals, tech, etc). That's my point - PLEX is the only item in Eve that responds in any perceptible way to that sort of inflationary pressure.

Member of the Goonswarm Economic Warfare Cabal
RubyPorto
RubysRhymes
#64 - 2013-01-18 03:37:56 UTC  |  Edited by: RubyPorto
mynnna wrote:
Yes, but it didn't really have any effect on non-PLEX commodities, or if it did that effect was buried under everything else (rise and fall of minerals, tech, etc). That's my point - PLEX is the only item in Eve that responds in any perceptible way to that sort of inflationary pressure.


But the increase in PLEX prices is the prime indicator of inflation, and is entirely caused by the Free tech moon and free T2 BPO ISK faucets.

"It's easy to speak for the silent majority. They rarely object to what you put into their mouths." -Abrazzar "the risk of having your day ruined by other people is the cornerstone with which EVE was built" -CCP Solomon
DarthNefarius
Minmatar Heavy Industries
#65 - 2013-01-18 04:40:41 UTC  |  Edited by: DarthNefarius
Bugsy VanHalen wrote:


Bounties and mission payouts generate isk from nothing, while activities such as running wormhole sites do not generate isk. You may thing, wait, running wormhole sites makes more isk than missions or ratting. How can it not be a faucet? Well, sleepers in wormhole sites do not pay bounties they drop items, those items, such as nano ribbons, are then sold to other players for isk. No new isk is generated, it is just existing isk changing hands.


Sorry but you are very very incorrect about no ISK being generated from the fruits of sleeper sites ( to the tune of ~9-10 trillion ISK a month ) sleepers drop 'blue loot' ( especially in the higher class holes) which can be sold to NPC's
An' then Chicken@little.com, he come scramblin outta the    Terminal room screaming "The system's crashing! The system's    crashing!" -Uncle RAMus, 'Tales for Cyberpsychotic Children'
DarthNefarius
Minmatar Heavy Industries
#66 - 2013-01-18 05:34:41 UTC  |  Edited by: DarthNefarius
mynnna wrote:
Velocity of money seems to have an awfully minimal if not non-existent effect on inflation of non-PLEX goods in this game though.


I agree with your implication that the velocity of money affects the price of PLEX and the extreme increase thanks to the 'summer of FW lp bonanza ' went to prove that. I think this discussion though is better discussed in the thread I put forth about the PLEX intervention.

Back to sinks & faucets:
something that really disturbed me was the ISK sink reductions of FW tiers (75%)which once where taken out had an immediate effect on PLEX prices. Further more I still argue that in the long term (2 years) those ISK reductions per item will have a net negitive in the LP sink eventhough in the short term alot of ISK was taken out of the economy.

Your earlier post discussing replacing mission reward ISK with LP has merit but due to the lingering effects of reduced ISK LP from the FW bonanza LP value is espeically suffering. A way to counter that would be addition of new valuable LP items. Furthermore the FW LP bonanza had a very definite deflationary effect on items such as Fleet Issue stabbers and probably all faction ammos except Amar faction crystals.

I'm mildly curious how much the FW bonanza contributed to deflation too.
An' then Chicken@little.com, he come scramblin outta the    Terminal room screaming "The system's crashing! The system's    crashing!" -Uncle RAMus, 'Tales for Cyberpsychotic Children'
RubyPorto
RubysRhymes
#67 - 2013-01-18 06:31:52 UTC
DarthNefarius wrote:

Back to sinks & faucets:
something that really disturbed me was the ISK sink reductions of FW tiers (75%)which once where taken out had an immediate effect on PLEX prices. Further more I still argue that in the long term (2 years) those ISK reductions per item will have a net negitive in the LP sink eventhough in the short term alot of ISK was taken out of the economy.

Your earlier post discussing replacing mission reward ISK with LP has merit but due to the lingering effects of reduced ISK LP from the FW bonanza LP value is espeically suffering. A way to counter that would be addition of new valuable LP items. Furthermore the FW LP bonanza had a very definite deflationary effect on items such as Fleet Issue stabbers and probably all faction ammos except Amar faction crystals.

I'm mildly curious how much the FW bonanza contributed to deflation too.


FW Tiers did nothing to alter the "sinkiness" of an LP.
Tier 1: 1000 LP + 1000 ISK = 1 Item. => 1000 ISK sunk for 1000 LP.
Tier 5: 250LP + 1000 ISK = 1 Item => 1000LP + 1000 ISK = 4 Items. => 1000 ISK sunk or 1000 LP.

Each LP takes the same amount of ISK down the drain with it when it's used, and I didn't see any evidence of high tiers resulting in massive hoards of unspent LP being socked away because "I only needed the one item."

The market value of the resulting item is entirely irrelevant to the amount of ISK that LP stores sink.


The price of a product decreasing because the cost to produce that product has decreased is not "deflation," it's the normal workings of the market. Just like cruiser prices didn't rise (aren't rising) after Retribution because of "inflation," they rose (are rising) because the cost to produce them has increased.

"It's easy to speak for the silent majority. They rarely object to what you put into their mouths." -Abrazzar "the risk of having your day ruined by other people is the cornerstone with which EVE was built" -CCP Solomon
mynnna
State War Academy
Caldari State
#68 - 2013-01-18 06:38:34 UTC
The FW tiers did not reduce the amount of isk sunk through the LP stores. Players spent the same amount of LP (and thus the same amount of isk), they just got more for it. The effects the FW bonanza had on PLEX prices would be best attributed to the whole "increasing velocity of money" thing.

If you think LP value is still suffering I take it you haven't checked the implant markets lately. Stat implants, at least, are at record highs - pushing 10m/ea for +3s, 22m/ea (or more) for +4s, putting them around 870-960 isk/LP. +5s are still lagging a fair bit and are more down in the 600-700s range, but that's to be expected, and are all well up over 100m anyway; I'd expect them to go to 120 or so. Ammo is, according to a spreadsheet I've put together for other purposes, similarly valuable... PP and EMP L are lagging a bit in value, but the other sizes as well as all sizes of Fusion are 1000 isk/LP or better. As to the ships, FW pilots already enjoyed a sizable cost advantage for those and while you're correct that they haven't recovered much (tempest fleet issues aside, of course), it's to be expected that they will not recover a whole lot - the militia pilot pays just 45k LP (plus a normal stabber and nexus chip), while the mission runner pays 240k LP.

Member of the Goonswarm Economic Warfare Cabal
DarthNefarius
Minmatar Heavy Industries
#69 - 2013-01-18 06:40:07 UTC  |  Edited by: DarthNefarius
RubyPorto wrote:
DarthNefarius wrote:

Back to sinks & faucets:
something that really disturbed me was the ISK sink reductions of FW tiers (75%)which once where taken out had an immediate effect on PLEX prices. Further more I still argue that in the long term (2 years) those ISK reductions per item will have a net negitive in the LP sink eventhough in the short term alot of ISK was taken out of the economy.

Your earlier post discussing replacing mission reward ISK with LP has merit but due to the lingering effects of reduced ISK LP from the FW bonanza LP value is espeically suffering. A way to counter that would be addition of new valuable LP items. Furthermore the FW LP bonanza had a very definite deflationary effect on items such as Fleet Issue stabbers and probably all faction ammos except Amar faction crystals.

I'm mildly curious how much the FW bonanza contributed to deflation too.


FW Tiers did nothing to alter the "sinkiness" of an LP.
Tier 1: 1000 LP + 1000 ISK = 1 Item. => 1000 ISK sunk for 1000 LP.
Tier 5: 250LP + 1000 ISK = 1 Item => 1000LP + 1000 ISK = 4 Items. => 1000 ISK sunk or 1000 LP.

Each LP takes the same amount of ISK down the drain with it when it's used, and I didn't see any evidence of high tiers resulting in massive hoards of unspent LP being socked away because "I only needed the one item."

The market value of the resulting item is entirely irrelevant to the amount of ISK that LP stores sink.


The price of a product decreasing because the cost to produce that product has decreased is not "deflation," it's the normal workings of the market. Just like cruiser prices didn't rise (aren't rising) after Retribution because of "inflation," they rose (are rising) because the cost to produce them has increased.





Malarky 4 items where introduced where there was 1 before for the same price as 1. Unless demand is perfectly elastic we're looking at a significant ISK sink reduction over time. I would not doubt that there is some elasticity found in cheaper FW items but I think its fairly rigid
An' then Chicken@little.com, he come scramblin outta the    Terminal room screaming "The system's crashing! The system's    crashing!" -Uncle RAMus, 'Tales for Cyberpsychotic Children'
mynnna
State War Academy
Caldari State
#70 - 2013-01-18 06:41:28 UTC  |  Edited by: mynnna
If they'd left it in long enough to completely shatter the markets, perhaps. They didn't, and the excess stock was absorbed by speculative traders and released out onto the market slowly as prices rose. In essence, for the relatively short period of time, demand was perfectly elastic.

Member of the Goonswarm Economic Warfare Cabal
DarthNefarius
Minmatar Heavy Industries
#71 - 2013-01-18 06:48:17 UTC  |  Edited by: DarthNefarius
mynnna wrote:
If they'd left it in long enough to completely shatter the markets, perhaps.(snip) .


Agreed I bet the surprise early retraction of the FW ISK reductions was taken out at the same time of the PLEX intervention or slightly afterwards. Also I wouldn'tdoubt that part of the surprise early was toprevent last mad dash to cash in incredible amount of LP at tier 5.
Guess we'll find out when Dr E does his Janruary DEV blog he mentioned in the CSM minutes.
An' then Chicken@little.com, he come scramblin outta the    Terminal room screaming "The system's crashing! The system's    crashing!" -Uncle RAMus, 'Tales for Cyberpsychotic Children'
mynnna
State War Academy
Caldari State
#72 - 2013-01-18 06:51:21 UTC
That sort of timing would make sense, especially as I have a sneaking suspicion that the fact that they moved the changes up instead of including them in Retribution was on EyjoG's prompting. It would have been a sort of "Go fix the mess you've made while I contain the damage" move.

Member of the Goonswarm Economic Warfare Cabal
RubyPorto
RubysRhymes
#73 - 2013-01-18 07:09:10 UTC  |  Edited by: RubyPorto
DarthNefarius wrote:
Malarky 4 items where introduced where there was 1 before for the same price as 1. Unless demand is perfectly elastic we're looking at a significant ISK sink reduction over time. I would not doubt that there is some elasticity found in cheaper FW items but I think its fairly rigid


The only way that the normal amount of ISK would not be sunk would is if there are enormous LP stockpiles left uncashed, thus remaining LP and not sinking ISK.

I've seen nothing that even hints that this is the case.

If demand were inelastic, prices on +5s would have quickly fallen to just over their Tier 5 ISK cost as people tried to sell their surplus to a saturated market. But even then, it wouldn't matter because the ISK is sunk when you redeem the LP, so the only possible reduction in sinkyness is if Tier5 causes people to not redeem their LP.

You've had this debate with mynnna/corestwo before.
https://forums.eveonline.com/default.aspx?g=posts&t=131752

Once again, the only way that tier 5 could make LP less sinky is if people decided, en masse, upon hitting Tier 5 "Nah, I'm not going to bother redeeming my LP, I'm just going to let it rot in my journal." Where's your evidence that this happened at all, let alone to any significant extent?

What happens to the items after they've been created has no bearing on how much ISK is sunk via the LP store.

"It's easy to speak for the silent majority. They rarely object to what you put into their mouths." -Abrazzar "the risk of having your day ruined by other people is the cornerstone with which EVE was built" -CCP Solomon
DarthNefarius
Minmatar Heavy Industries
#74 - 2013-01-18 09:23:46 UTC  |  Edited by: DarthNefarius
RubyPorto wrote:

If demand were inelastic,



Show me how consumer demand for implants has increased? or especially why it will in the future?
An' then Chicken@little.com, he come scramblin outta the    Terminal room screaming "The system's crashing! The system's    crashing!" -Uncle RAMus, 'Tales for Cyberpsychotic Children'
Vaerah Vahrokha
Vahrokh Consulting
#75 - 2013-01-18 10:09:30 UTC  |  Edited by: Vaerah Vahrokha
DarthNefarius wrote:
mynnna wrote:
Velocity of money seems to have an awfully minimal if not non-existent effect on inflation of non-PLEX goods in this game though.


I agree with your implication that the velocity of money affects the price of PLEX and the extreme increase thanks to the 'summer of FW lp bonanza ' went to prove that. I think this discussion though is better discussed in the thread I put forth about the PLEX intervention.


This is a topic that imo should not be dismissed too easily as it's a prime metric for wallets segregation.

A non ISK faucet causing ISK to change hands and generally "speed up" like that means that the amount of stashed and "standby" ISK are hugenormous and just waiting for a trigger to pour out.

This means that such FW implementation (economy speaking) was excruciantly bad, I mean original Incursions type of BAD, to the point to shake the very "economy sanity" mechanisms that usually make ISK sit idle in wallets without flooding the system.

CCP have to pay much attention to their own EvE safeguards (one of the most important being the "glass ceiling" known to many traders).

EvE Online portal | EvE markets tutorials
mynnna
State War Academy
Caldari State
#76 - 2013-01-18 14:50:51 UTC
DarthNefarius wrote:
RubyPorto wrote:

If demand were inelastic,



Show me how consumer demand for implants has increased? or especially why it will in the future?


Given that there are not separate bars in the market charts that tell us the difference between consumer demand and speculator/trader demand, that will be rather hard.

In any case, I'm not entirely sure what you're trying to get at here.

Member of the Goonswarm Economic Warfare Cabal
Rengerel en Distel
#77 - 2013-01-18 15:55:26 UTC  |  Edited by: Rengerel en Distel
RubyPorto wrote:

FW Tiers did nothing to alter the "sinkiness" of an LP.
Tier 1: 1000 LP + 1000 ISK = 1 Item. => 1000 ISK sunk for 1000 LP.
Tier 5: 250LP + 1000 ISK = 1 Item => 1000LP + 1000 ISK = 4 Items. => 1000 ISK sunk or 1000 LP.

Your numbers are a bit off though, the old formula looked more like:
Tier 1: 4000 LP + 4000 ISK = 1 item
Tier 2: 2000 LP + 2000 ISK = 1 item
Tier 3: 1000 LP + 1000 ISK = 1 item
Tier 4: 500 LP + 500 ISK = 1 item
Tier 5: 250 LP + 250 ISK = 1 item

That is why people cashed out at T5 or if desperate T4. It's why the new tiers don't change either the LP or ISK in the stores, only how much LP you gain for doing tasks. You could easily make 4000 isk/lp in the old system, while now 1000+isk/lp is great*.

*Haven't looked at the prices across the entire market recently, but that's what it was last I looked. Of course, some items might still give high payouts, I'm talking general items without crashing the market.

With the increase in shiptoasting, the Report timer needs to be shortened.
RubyPorto
RubysRhymes
#78 - 2013-01-18 16:27:13 UTC
DarthNefarius wrote:
RubyPorto wrote:

If demand were inelastic,



Show me how consumer demand for implants has increased? or especially why it will in the future?


Doesn't matter. The ISK is sunk at the point of item creation. What happens to the item later is irrelevant.

Higher tiers can result in less ISK being sunk IFF (if and only if) large amounts of LP are left unconverted. You have yet to make a cogent argument for why you think that people reached Tier 5 and said "eh, I really only wanted 1 +5 implant, not 50."

"It's easy to speak for the silent majority. They rarely object to what you put into their mouths." -Abrazzar "the risk of having your day ruined by other people is the cornerstone with which EVE was built" -CCP Solomon
RubyPorto
RubysRhymes
#79 - 2013-01-18 16:28:35 UTC
Rengerel en Distel wrote:

Your numbers are a bit off though, the old formula looked more like:
Tier 1: 4000 LP + 4000 ISK = 1 item
Tier 2: 2000 LP + 2000 ISK = 1 item
Tier 3: 1000 LP + 1000 ISK = 1 item
Tier 4: 500 LP + 500 ISK = 1 item
Tier 5: 250 LP + 250 ISK = 1 item

That is why people cashed out at T5 or if desperate T4. It's why the new tiers don't change either the LP or ISK in the stores, only how much LP you gain for doing tasks. You could easily make 4000 isk/lp in the old system, while now 1000+isk/lp is great*.

*Haven't looked at the prices across the entire market recently, but that's what it was last I looked. Of course, some items might still give high payouts, I'm talking general items without crashing the market.


The specific numbers don't matter. All that matters is the fact that the ratio of ISK sunk to LP converted stays constant within any given LP store offer.

"It's easy to speak for the silent majority. They rarely object to what you put into their mouths." -Abrazzar "the risk of having your day ruined by other people is the cornerstone with which EVE was built" -CCP Solomon
DarthNefarius
Minmatar Heavy Industries
#80 - 2013-01-18 17:41:47 UTC
RubyPorto wrote:
DarthNefarius wrote:
RubyPorto wrote:

If demand were inelastic,



Show me how consumer demand for implants has increased? or especially why it will in the future?


Doesn't matter. The ISK is sunk at the point of item creation. What happens to the item later is irrelevant.


So demand doesn't matter? Roll
An' then Chicken@little.com, he come scramblin outta the    Terminal room screaming "The system's crashing! The system's    crashing!" -Uncle RAMus, 'Tales for Cyberpsychotic Children'