Market Discussions

Here's an idea that got kicked around in SCC, so thought I'd write it up.

There are two pieces to this to make the whole, so before you jump out of your seat and start flaming, read both parts please.

First part of this is NPC corp shares. Place all the NPC corp shares on a market, and let the players buy them and sell them as they wish. After a month, we should have a pretty good idea of what they are worth. Of course dear reader, they are worthless so far, until the second part. Which is ...

In order for a corp to rent an office at an NPC station, the corp must be the owner of some number of shares. These shares are not used in payment, they are instead used as a simple gate keeper, or 'key' if you like. The proof that a corp owns equity in the NPC corp.

Renting an office will require shares be held by the renting corp. This number will be dynamic and use the same mechanism used now, but instead will be expressed in shares instead of ISK, and instead of being the rent, it is instead the 'Equity Value Required'. The monthly rental fee of any and all offices will be reduced to a measly 50,000 ISK a month, even for Jita.

So for instance, to rent an office in Jita right now, it costs 1,987,242,731 ISK a month. Let's suppose shares had a market value of 500,000 ISK. To be allowed to rent an office at Jita, a corp would need to be in possession of 3,975 shares of Caldari Navy Stock. Furthermore, the renting corp would need to maintain the amount of equity required on a monthly basis, so will need to buy (or sell) as needed.

If the corp has the required amount of equity expressed in the applicable NPC corp shares, they can rent the office and pay their 50,000 a month rent. If they are not in possession of the required equity, they can not rent an office.

An office that has an 'Equity Value' of less than the value of one share, would simply require one share of stock.

This feature would give NPC shares some tangible value, create new markets and possibly new professions, add a new dynamic to the economy and perhaps, give CCP a testing ground for further financial market ideas and features.

Have at it, find the holes, the errors, thought experiment it ... ya'll know the drill.

The idea is very useful for the purpose of introducing both shares, real estate and exchange trade into our current ecology.

A few details will ofc be needed to have a workable and ready feature.

The rental price dynamic still needs to move and be similar in nature as it is now, the difference would be that it would be reduced to a fraction of current price. So the rent would be 5% of current price, but demand the shares value of 2-3 months. In Jita case this number becomes a bit crazy, but the intention is to grant players the ability to indirectly trade the underlying asset of their real estate.

From a fundamental "clean slate" view all stations would cost 10.000 isk to rent. And to rent a slot you would need 100.000 nominal value shares, per office.

If you buy shares but dont rent an office you get monthly dividends from the players renting Office slots. the idea is to pay back 50% of the rental profits as dividends.

Now as rental prices goes up on a mechanic similar to the current one, maybe with a bit of tweaking that means the dividends will increase and the cost to hold the original 100.000 nominal shares go up.

This would fundamentally be the first integration of npc in a dynamic player active economy. Later factional warfare, market seeded goods etc could become a part of this npc dynamic economy, and be the template for the player equivalent.

The shares would need to be handled initially in some "fair" manner maybe via an IPO dutch auction system, or by just granting an offer based on standing, and the number of shares bought would set the price.. This is a bit "technical" if we get into the details, but the system is well known and should not be rocket science to ccp devs and economists. (If they can understand the latest CSM voting system, I am sure IPO pricing will be a piece of cake)

Good questions.

For newbies: I agree that the cost of shares could possibly become prohibitive for new players. But we have to keep a couple of things in mind. First, there are a lot of stations and NPC corps in Eve. Less desirable NPC corps will have share prices that are relatively inexpensive. Caldari Navy, Emperor Family, Brutor Tribe will likely be rather expensive. But Native Fresh Foods and that ilk will likely not be too expensive.

Having goals in Eve is not a bad thing, being able to move your offices from Baltic Avenue to Boardwalk is an accomplishment. Eve is not about social justice. If it turns out that all share prices just go insane, there is nothing stopping CCP from having the NPC corps issue additional shares, which brings us to your other question.

Zombie Shares: Corps do go inactive at times, people leave the game and so forth. So there could be an issue where shares are consumed by inactivity. To alleviate this problem, CCP could institute a policy by which NPC corps issue 2% a month of new shares. These new shares would be sold by the NPC corps, on the market, at the 20 day moving average.

Also, a corp that officially closes, would have all NPC shares confiscated and put back into possession of the NPC corp which then sells them on the market at the 20 day moving average.

For corps that go inactive and do not close, they simply become zombie shares. After a year CCP would have a pretty good idea of how much zombification there was, and could adjust that 2% mentioned above, to whatever value is appropriate.

Bas, bad, bad Idea. Did I mention it's a bad idea?

Explain why it is bad.

Not only high sec, but NPC null sec as well.
Maybe, in some far off date in the future, if this idea were implmented, it could extend to player owned stations. Who knows.

It didn't sound to me like that was his proposal. It sounds like he's proposing rental as it works right now but that the RIGHT to rent an office in a given system will depend upon owning enough shares of stock.

For example (if I get what he's saying) you could buy say 100 shares of an NPC corp and then have a right to rent an office in any station where that corp holds the offices. However, in Station #1 you would only need 2 shares to rent an office because maybe it is in the ghetto in the middle of solitude but in station #2 you might need 200 shares to rent an office because the demand is very high.

In order to not lose the isk sink effect from office rental then you would still need to pay rent via the existing mechanic but the level of rent would have to be based on some kind of nominal price calculated over a rolling average of the stock price for that NPC corp * the number of shares you have.

Buying and selling shares wouldn't be "forced" because once you have them you have them. Maybe you would want to re-sell some of them at a later date if you weren't using them or maybe you'd want to buy more shares if you wanted to upgrade to a more popular station, but that's the extent of playing the market you would be "forced" into.

correct me if I didn't understand it.

The truly magical thing about a stock market is that it has an amazing ability to sort of "calculate" the ACTUAL value of something without anyone doing anything. So floating NPC corps based on this sounds like an oustanding idea to me because the market would very quickly hone in on the optimal price for an office in every station in EVE without some CCP dev sucking an arbitrary number out of his thumb. it would become completely player driven content.

It really does work like that. The RL stockmarket does this too. There are some problems with a free market like monopoly forming that you'd have to deal with mechanically in EVE but the basic idea at it's core has a lot of potential in my mind. In fact, it's the only "lets-have-a-stockmarket" idea I've every heard of on the forms that made any sense to me.

Aside from what's already been said, I think there would be some other issues as well. For example, as populations migrate in EVE you would expect the number of shares required to rent an office to go up and down as stations become more and less popular. It's unclear to me what would need to be done to account for this in the toy-market concept.

But still. I'm going to vote +1 on this idea, at least in concept.

Which is how it already works...

Hence Jita offices at 2B ISK...

You mean office prices keep going up until people decide it's not worth it?

Yep, but it's not exactly force is it? The players choose to rent an office. No one is forcing them to do it.

Should I be forced to deal in LP with an NPC agent?

Should I be forced to put fuel blocks in my POS?