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Fixed Money Supply

Author
Luxi Daphiti
Viziam
Amarr Empire
#21 - 2011-10-28 15:08:42 UTC
Loney wrote:
[...] But now I think there is pleanty of isk in the universe to support a closed system.

I'd probably agree with this, and with your initial points. And I suppose if the worst comes to show it wouldn't be too hard for CCP to inject some extra ISK into the economy.
Loney
CyberDyne R-D
Artificial Intellagence
#22 - 2011-10-28 15:08:58 UTC
Sidunas wrote:
Limiting the amount of ISK is equal to shutting down a part of the economy.

Let's suppose I'm a miner. I mine a lot of Trit, but I'm not able to sell it.
If I can't get ISK, I have two options: either hoard my Trit, or offer my goods via contract. Maybe, we will get a substitute for ISKs but that would certainly limit the market transactions and would destroy a part of the market...



Yes UNLIMITED amount of money works in the real work right? Just ask some of those countries that tried it and now their money is worth less then the Toliet Paper i use to wipe my arse with!

Your Tritianium is hard to sell because of an OPEN mineral system... more is created FASTER then it is destroyed!

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Tasko Pal
Spallated Garniferous Schist
#23 - 2011-10-28 16:03:21 UTC  |  Edited by: Tasko Pal
Loney wrote:


I can see in the way back in the "begining" of eve when there was little isk in the in the universe and alot of players and OPEN system worked best... but now I think there is pleanty of isk in the universe to support a closed system.


While I can profit despite a fixed amount currency, I think the hoarding problem will overcome any amount of initial supply. And we ignore the players who already have massive amounts of isk. There will be whine threads.

I think a currency with modest inflation is better. It encourages people to use that isk rather than sit on it. WIth fixed amount currency, a viable strategy is to simply sell off everything you own and come back in a few years. That shouldn't be a guaranteed profit IMHO.
Adunh Slavy
#24 - 2011-10-28 22:32:52 UTC
Tasko Pal wrote:
Loney wrote:


I can see in the way back in the "begining" of eve when there was little isk in the in the universe and alot of players and OPEN system worked best... but now I think there is pleanty of isk in the universe to support a closed system.


While I can profit despite a fixed amount currency, I think the hoarding problem will overcome any amount of initial supply. And we ignore the players who already have massive amounts of isk. There will be whine threads.

I think a currency with modest inflation is better. It encourages people to use that isk rather than sit on it. WIth fixed amount currency, a viable strategy is to simply sell off everything you own and come back in a few years. That shouldn't be a guaranteed profit IMHO.


I do understand this line of reasoning. One thing this line of reasoning does is, it assumes that all things will deflate at the same rate. A casual glance at the Eve market shows that all sorts of items go up and down over time, even items that have not had a supply or demand change for considerable amounts of time. Simply hording ISK is not a sure way to get ahead, that will be the slow way to gain relative wealth in ISK terms.

On thing that we're not also discussing is, how does the NPC ISK cycle back into the economy. This method could also have impacts on markets. There could be NPC incentives for certain behaviors that increase the velocity of the money supply, this would have a slight inflationary impact.

There could be in-game player/corp/alliance stocks and bonds. Though these items will not have the same saleability as ISK, they will have some monetary value. NPC shares, NPC bonds that cycle that ISK back into the economy. Maybe NPC buy some minerals, moon goo.

Other ideas?

Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves.  - William Pitt

Mantra Achura
Stammtisch
#25 - 2011-10-28 23:05:28 UTC
Adunh Slavy wrote:
Since this idea has come up in a conversation in this forum, and it shows up everyonce in a while, I thought why not have the discussion. CCP won't do this, but could be an interesting discussion regardless.

The floated idea was, in the simplest terms, freeze the ISK supply.

To do this there would need to be ways to cycle the ISK back to players from the NPC side of the economy. Ideas to do that have been NPC stocks that pay dividends, NPC (Concord) pays bounties only so long as they have money available. Concord switches to LPs and stops giving ISK bounties, and a few other ideas of this nature.

One of the big problems with this idea is what to do with NPC stocks if the owning player goes inactive? So perhaps NPC bonds would be better since they have a date certain attached?

But another problem is what about ISK sitting in wallets of inactive accounts. What should be done about that then? One idea is to "take" the ISK from inactive accounts and the NPC corp with which the player has the highest standing, gives that player LPs, which can be used to buy bonds, should the player return.

If gamecraft theory tickles your fancy, share a thought. We know CCP won't do this, so a conversation just for fun.

Have at it.


Limiting the amount of ISK is too dangerous.

In case a strategy is found to extract loads of money out of the cycle or more players are about to enter that game, less money is spread among all players and CONCORD. Less money ready to be consumed with a, lets say stable amount of wares on market, leads to inflation. So prices are rising but mission runner are not able to retrieve more money from CONCORD. That means players are pissing of and quit EVE.

You could dry out the whoole EVE economy with a freezed ISK supply.
Adunh Slavy
#26 - 2011-10-28 23:35:58 UTC
Mantra Achura wrote:


Limiting the amount of ISK is too dangerous.

In case a strategy is found to extract loads of money out of the cycle or more players are about to enter that game, less money is spread among all players and CONCORD. Less money ready to be consumed with a, lets say stable amount of wares on market, leads to inflation. So prices are rising but mission runner are not able to retrieve more money from CONCORD. That means players are pissing of and quit EVE.

You could dry out the whoole EVE economy with a freezed ISK supply.


If wares as you put it were stable, and the ISK supply were fixed, and the Eve population were fixed, the long term aggregate price level would remain constant. Shorter scales would see the aggregate bounce around a bit as player behaviors changed due to in-game events such as war and "jihad swarms" etc.

If the player population decreased, we would expect prices to go up, assuming ISK in unsubscribed wallets could be liberated.

If Population increased prices would go up, then down.

Let's do a simple model. Players(P):ISK(I):Wares(W)

At constant for all, P10:I10:W10 - Nothing changes over the long term.

What happens if some players leave - P8:I10:W10 This is the model when they first leave, more ISK and wares for everyone. But wares are generated by players, eventually the model will be P8:I10:W8, less players, less wares, more relative ISK - prices go up.

What happens if new players join - P12:I10:W10. This is the model just as new players enter the market. They will have a demand for ISK and wares, prices will go up. Eventually the new players will be producing wares and the model will be, P12:I10:W12 - More players, less relative ISK, more wares - Prices will fall.

Your concern is valid, though backwards with regards to inflation. The economy could slow in terms of ISK, but demand will remain so long as people are blowing each other up.

The trick in all this is liberating wallets from inactive accounts and encouraging velocity.

Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves.  - William Pitt

Mantra Achura
Stammtisch
#27 - 2011-10-29 00:56:45 UTC  |  Edited by: Mantra Achura
You are describing Say's law in detail.

The whoole model is working except the players (P) are hoarding money and thus not taking part in consumption curbing the industry.

Two types of players are hoarding:
- All players are holding an (small) amount of money in the wallet in general. The more players the more deposit is hold.
- Speculators hold a percentage of their NAV in their wallet, lets say between 10 - 20%. The higher their NAV, the higher the liquid buffer is essential.
Loney
CyberDyne R-D
Artificial Intellagence
#28 - 2011-10-29 02:14:35 UTC  |  Edited by: Loney
Adunh Slavy wrote:
One of the big problems with this idea is what to do with NPC stocks if the owning player goes inactive? So perhaps NPC bonds would be better since they have a date certain attached?

But another problem is what about ISK sitting in wallets of inactive accounts. What should be done about that then? One idea is to "take" the ISK from inactive accounts and the NPC corp with which the player has the highest standing, gives that player LPs, which can be used to buy bonds, should the player return.

Those are not that bad of ideas but it fixes a problem by creating another problem of and open LP system and untold amounts of LP running about. To fix the Isk problem is that to smiply creat a universal "FEDERAL" type tax system.. I describe it a bit below.


Tasko Pal wrote:
While I can profit despite a fixed amount currency, I think the hoarding problem will overcome any amount of initial supply. And we ignore the players who already have massive amounts of isk. There will be whine threads.

I think a currency with modest inflation is better. It encourages people to use that isk rather than sit on it. WIth fixed amount currency, a viable strategy is to simply sell off everything you own and come back in a few years. That shouldn't be a guaranteed profit IMHO.

As one of those "Dirty Hoarders" i would be in favor of paying some kind of Hoarder tax, or something like the Federal Tax system where everyone ingame pays a Percentage to CONCORD monthly. Say 1-2% of your entire net worth monthly, and if you didn't have the ISK you would get a negative ballance and you have to be forced to sell your 100b in assets or keep enought isk on hand to pay the taxes. This would also solve the issues of "inactive accounts / Corps" with the idle isk, and be able to keep the system CLOSED.

Mantra Achura wrote:
Limiting the amount of ISK is too dangerous.

In case a strategy is found to extract loads of money out of the cycle or more players are about to enter that game, less money is spread among all players and CONCORD. Less money ready to be consumed with a, lets say stable amount of wares on market, leads to inflation. So prices are rising but mission runner are not able to retrieve more money from CONCORD. That means players are pissing of and quit EVE.

You could dry out the whoole EVE economy with a freezed ISK supply.

Thats not true.. if you mangae the "new player problem" like i have described in this post on page 1 (https://forums.eveonline.com/default.aspx?g=posts&m=271098#post271098). I also think the tax system above would also solve some of your concerns.

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Adunh Slavy
#29 - 2011-10-29 11:35:34 UTC
Loney wrote:

Hording Tax



That seems a bit draconian to me, though I understand the motive. It may be the answer to inactive accounts, after 30 days start taxing the wallet, but pay the player back with concord LP or something like that. If they come back it'll create some needed volitility in that area, and if they don't come back, who cares.

Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves.  - William Pitt

Barakach
Caldari Provisions
Caldari State
#30 - 2011-10-29 13:49:05 UTC
A hoarding tax would also be bad as it would discourage saving money. Some amount of savings is important, especially to traders.
Luxi Daphiti
Viziam
Amarr Empire
#31 - 2011-10-29 14:05:22 UTC
Loney wrote:
As one of those "Dirty Hoarders" i would be in favor of paying some kind of Hoarder tax, or something like the Federal Tax system where everyone ingame pays a Percentage to CONCORD monthly. Say 1-2% of your entire net worth monthly, and if you didn't have the ISK you would get a negative ballance and you have to be forced to sell your 100b in assets or keep enought isk on hand to pay the taxes. This would also solve the issues of "inactive accounts / Corps" with the idle isk, and be able to keep the system CLOSED..

Taxing net worth seems like a just idea if we were to go with such a closed system. Although I can see problems with calculating the net worth, as the base price of some assets are far lower then the retail value. Especially with faction and officer modules. You could hold 100bn in assets yet the game may only recognize them as a few hundred million ISKs worth. meaning you'll be taxed far lower then what you should (also opens up a sort of loophole for rich players!)
Cassina Lemour
Staner Industries
#32 - 2011-10-29 14:28:31 UTC

A 'hoarding' tax would be unworkable because it would punishes players with a high velocity as much as those with a low velocity, worse when you consider transaction taxes and fees.

The biggest issue is that CONCORD has no economic rent to cover bounties, unless you can propose something to fulfil that role there is no point tinkering around the edges and this idea is dead in the water.
Tasko Pal
Spallated Garniferous Schist
#33 - 2011-10-29 15:19:57 UTC  |  Edited by: Tasko Pal
Loney wrote:


Tasko Pal wrote:
While I can profit despite a fixed amount currency, I think the hoarding problem will overcome any amount of initial supply. And we ignore the players who already have massive amounts of isk. There will be whine threads.

I think a currency with modest inflation is better. It encourages people to use that isk rather than sit on it. WIth fixed amount currency, a viable strategy is to simply sell off everything you own and come back in a few years. That shouldn't be a guaranteed profit IMHO.


As one of those "Dirty Hoarders" i would be in favor of paying some kind of Hoarder tax, or something like the Federal Tax system where everyone ingame pays a Percentage to CONCORD monthly. Say 1-2% of your entire net worth monthly, and if you didn't have the ISK you would get a negative ballance and you have to be forced to sell your 100b in assets or keep enought isk on hand to pay the taxes. This would also solve the issues of "inactive accounts / Corps" with the idle isk, and be able to keep the system CLOSED.


That would remove my objection to the plan as long as the tax was just applied to the wallet and not general assets. Then it would be equivalent to modest inflation (without the risk of greater inflation).
Luxi Daphiti
Viziam
Amarr Empire
#34 - 2011-10-29 15:33:56 UTC
Tasko Pal wrote:
That would remove my objection to the plan as long as the tax was just applied to the wallet and not general assets. Then it would be equivalent to modest inflation (without the risk of greater inflation).

If assets aren't included you could 'convert' all liquid ISK into assets before the tax to avoid it. Making it rather redundant.
Mantra Achura
Stammtisch
#35 - 2011-10-29 17:07:15 UTC
Luxi Daphiti wrote:
Tasko Pal wrote:
That would remove my objection to the plan as long as the tax was just applied to the wallet and not general assets. Then it would be equivalent to modest inflation (without the risk of greater inflation).

If assets aren't included you could 'convert' all liquid ISK into assets before the tax to avoid it. Making it rather redundant.


That's the goal of the tax: reducing the amaount of money in personal wallets.
Adunh Slavy
#36 - 2011-10-29 18:40:43 UTC
Cassina Lemour wrote:

The biggest issue is that CONCORD has no economic rent to cover bounties, unless you can propose something to fulfil that role there is no point tinkering around the edges and this idea is dead in the water.



Concord does not have to pay bounties in ISK. It could be Concord LP, it could be nothing at all too. There does need to be a mechanic to get ISK back into the player side of the economy away from the NPCs, but it does not have to be concord.

Since this entire conversation is just academic, as we all know CCP won't do this, the sky is the limit on ideas.

Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves.  - William Pitt

Tasko Pal
Spallated Garniferous Schist
#37 - 2011-10-30 05:17:48 UTC
Luxi Daphiti wrote:
Tasko Pal wrote:
That would remove my objection to the plan as long as the tax was just applied to the wallet and not general assets. Then it would be equivalent to modest inflation (without the risk of greater inflation).

If assets aren't included you could 'convert' all liquid ISK into assets before the tax to avoid it. Making it rather redundant.


But CCP wouldn't have the leeway to create a massive isk source like it does today. That's really the point of these sorts of measures. And I don't think much of a tax on assets. Inflation currently encourages people to do something with their money other than hold onto it. Valuation of assets is uncertain, at best. And forcing trades (such as would be required, if your wallet went negative), has ugly side-effects.
Adunh Slavy
#38 - 2011-10-30 15:48:09 UTC
Tasko Pal wrote:
Inflation currently encourages people to do something with their money other than hold onto it.



First let me say I do not disagree with this at all. My point below is that, there are other things that encourage the exercise of wealth in the form of money, other than inflation.

In a game like Eve, does not also the allure of getting more wealth by way of buying what is low and selling it high encourage activity? Even the simple spread trade has many participants. Spreads would likely be lower under a fixed monetary system, spreads and volitility tend to decrease with a steady monetary base.

There are also trends, political (war) events in Eve that also move markets. CCP changes BPOs, introduces new ships, goons or others go off on a rampage. These events add some variability to the environment and the markets. Those who know how to position would stand to gain. Eve would likely see just as many market manipulation attempts as well.

The biggest concern, for me anyway, is ISK that lands in inactive wallets, and how to get it back into the system along with the ISK that NPCs collect via the sinks.

Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves.  - William Pitt

JitaJane
Science and Trade Institute
Caldari State
#39 - 2011-10-31 11:18:16 UTC
Adunh Slavy wrote:
Cassina Lemour wrote:

The biggest issue is that CONCORD has no economic rent to cover bounties, unless you can propose something to fulfil that role there is no point tinkering around the edges and this idea is dead in the water.



Concord does not have to pay bounties in ISK. It could be Concord LP, it could be nothing at all too. There does need to be a mechanic to get ISK back into the player side of the economy away from the NPCs, but it does not have to be concord.

Since this entire conversation is just academic, as we all know CCP won't do this, the sky is the limit on ideas.


The main problem I see with this idea is not economic so much as one of game mechanic. At a certain point the primary mover of the Eve economy is players. People leave new people come in. An awful lot of the new players will not understand how to use the new LP market. Especially (if you can remember back then) while trying to figure out how to make these blasted internet spaceships work. Everyone who is experienced in the game could figure out how to use the LP market no problem. But a newcomer to the economy is going to need a day job to get their feet wet. I think I have mined less than a dozen times (just thinking of any other entry-level job) if I had to mine up my first BC I likely would not have stuck around. Call me a CareBear but every captain of industry, pirate, sov CEO and ninja in the game came in with a noob ship and a civilian gun. The learning curve here is not shallow.

90% of of the time my posts are about something I actually find interesting and want to learn more about. Do not be alarmed.

thekiller2002us
The J8sters
#40 - 2011-10-31 14:11:01 UTC
i can only see a massive gap increasing between wealthy players and the rest of the playerbase.

I'm with Brick on this one- make thouse carebearing b******s squeal..

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