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Plex hits 1b ISK in Jita

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Teckos Pech
Hogyoku
Goonswarm Federation
#641 - 2015-09-22 05:53:29 UTC
Market McSelling Alt wrote:
Zihao wrote:
Market McSelling Alt wrote:

As you can see, money supply is credited as the often likely cause. In the case of our Eve Economy, it likely is not. Oversupply of raw materials is likely the cause of deflation in Eve.


I'd be curious to know why you think monetary inflation isn't also a culprit. I don't have any reason to suppose that both aren't a strong factor or that one is stronger than the other, but plentiful reminders can be found here that "incursions and high class wh are the best isk/hr," and these are rather explicitly pumping isk into the economy.



Because monetary inflation wouldn't cause prices to drop... Shocked



Increasing money supply and a drop in the general price level. Sure. Roll

BTW, where is your index of prices? Got one? Admittedly I don't, but I'm guessing you don't either and you are basing your claims on anecdotes.

"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
Market McSelling Alt
Doomheim
#642 - 2015-09-22 07:13:47 UTC
Teckos Pech wrote:
Market McSelling Alt wrote:
Zihao wrote:
Market McSelling Alt wrote:

As you can see, money supply is credited as the often likely cause. In the case of our Eve Economy, it likely is not. Oversupply of raw materials is likely the cause of deflation in Eve.


I'd be curious to know why you think monetary inflation isn't also a culprit. I don't have any reason to suppose that both aren't a strong factor or that one is stronger than the other, but plentiful reminders can be found here that "incursions and high class wh are the best isk/hr," and these are rather explicitly pumping isk into the economy.



Because monetary inflation wouldn't cause prices to drop... Shocked



Increasing money supply and a drop in the general price level. Sure. Roll

BTW, where is your index of prices? Got one? Admittedly I don't, but I'm guessing you don't either and you are basing your claims on anecdotes.



Are you prepared to make the statement that there isn't more Isk Faucets than Isk Sinks in this game each month? Would be a bad statement to make.

Are you prepared to admit you are too lazy to look up price history for basic items? Because you don't need someone else creating a spreadsheet for you when you can just open up your market in game and take a look.

So please, before you try and patronize me, think about what you are actually saying. Monetary Inflation has always happened in this game due to its very design. Asset Deflation hasn't always happened but it definitely is right now.

Plex inflation appears to be a symptom of both Monetary Inflation and Asset Deflation. It isn't rocket science, its economics.

CCP Quant: Of all those who logon in Eve, 1.5% do Incursions, 13.8% PVP and 19.2% run Missions while 22.4% mine.

40.7% Join a fleet. The idea that Eve is a PVP game is false, the social fabric is in Missions and Mining.
Bagrat Skalski
Koinuun Kotei
#643 - 2015-09-22 08:00:55 UTC
We need more players. Not less. Stop telling people this game sucks.
CCP, make this game suck less.

Custom ship skins, character creator style "repaint". Bring it!
Divine Entervention
Doomheim
#644 - 2015-09-22 10:24:21 UTC
remove killmails.

People = more willing to take risks. More risks and more expensive ships being used = greater isk faucet.
Lan Wang
Federal Navy Academy
Gallente Federation
#645 - 2015-09-22 10:26:16 UTC
Divine Entervention wrote:
remove killmails.

People = more willing to take risks. More risks and more expensive ships being used = greater isk faucet.


i think that would just break the game

Domination Nephilim - Angel Cartel

Calm down miner. As you pointed out, people think they can get away with stuff they would not in rl... Like for example illegal mining... - Ima Wreckyou*
Boom Laison
University of Caille
Gallente Federation
#646 - 2015-09-22 11:18:40 UTC
Divine Entervention wrote:
remove killmails.

People = more willing to take risks. More risks and more expensive ships being used = greater isk faucet.


You do realise killmails is the only thing, that measures e-pen of most active Eve players?
CrouchingTiger HiddenIbis
Doomheim
#647 - 2015-09-22 11:22:00 UTC  |  Edited by: CrouchingTiger HiddenIbis
I love the current prices.

I'm cash rich but time poor. The high prices are letting me get through my steam library.

Fingers crossed for more inflation.
Boom Laison
University of Caille
Gallente Federation
#648 - 2015-09-22 11:23:42 UTC
PLEX price started to raise up after skinns were introduced. Instead of consuming stock pilled PLEXes, skinns raised demand, so prices doubled since then.
Tippia
Sunshine and Lollipops
#649 - 2015-09-22 13:23:27 UTC
Teckos Pech wrote:
You overstate your case with regards to the RL market, IMO. Yes the supply IG is larger, but that does not mean that the RL market plays no role.
It's not that it plays no role — it's that the role it plays is for the most part unknowable. It doesn't behave the way a market normally does, and we have no data for it. We can guesstimate something about demand and quantity as a reflection of in-game data, but we can't actually determine it.

Quote:
As for supply = demand => a price/quantity pair...yeah...useless. Never mind it is the very definition of market equilibrium.
In altering what I said, you skipped over a very important part: it's not supply = demand → price/quantity. It's supply = demand = quantity, at a fixed price, at every point. In other words, there are no distinct equilibria because this holds true everywhere. The entire demand curve is just a long smeared-out equilibrium because it always intersected by an inherently matching supply. The supply side is not a market force in the regular sense. And we don't find what you'd see as a regular price quantity pair, but rather a wide smear of quantities that always matches the fixed price. So how do you do a worth-while supply-demand analysis on this?

A market equilibrium is essentially a fixed point to the supply/demand function; the function will converge towards this point with each iteration. The problem with the RL PLEX market is that it has infinite fixed points. Everywhere and anywhere on the graph, we have an equilibrium. This makes it utterly useless for the purpose of telling us how… well, anything, really fits together — any suggestion or hypothetical value or shift we throw in will be an equilibrium.

Quote:
We can look at simply supply and demand analysis and see why the price has gone up.
Yes. For the in-game market. We can't do it for the OOG “market” because it doesn't behave like a market and because we have no data. That's why I question the value of including it at all. It can be collapsed into a single parameter — quantity — which is then used in the IG market analysis, with some caveat that not all bought PLEX end up on the IG market, which is fine since the data we have from the IG market has already filtered those out.
R3DRUM
Playboy Enterprises
Dark Taboo
#650 - 2015-09-22 13:50:02 UTC
I love plex prices! its nice to know most of eve are real life poor. Once a week I sell a plex fit 20 ships and pvp all week. I dont have to PVE at all. Keep rising PLEX prices!
u3pog
Ministerstvo na otbranata
#651 - 2015-09-22 13:56:41 UTC
R3DRUM wrote:
I love plex prices! its nice to know most of eve are real life poor. Once a week I sell a plex fit 20 ships and pvp all week. I dont have to PVE at all. Keep rising PLEX prices!


Poor or scrooge, maybe both. Thing is, I can easily make extra cash in game to afford a PLEX, even if the price doubles, can't do that in real life...Maybe find a better job, but in some countries thats easier said than done.
Market McSelling Alt
Doomheim
#652 - 2015-09-22 17:53:34 UTC
R3DRUM wrote:
I love plex prices! its nice to know most of eve are real life poor. Once a week I sell a plex fit 20 ships and pvp all week. I dont have to PVE at all. Keep rising PLEX prices!



Plex is nothing more than a legalized method to Pay to Win...

Or at least Pay to Fail Harder.

CCP Quant: Of all those who logon in Eve, 1.5% do Incursions, 13.8% PVP and 19.2% run Missions while 22.4% mine.

40.7% Join a fleet. The idea that Eve is a PVP game is false, the social fabric is in Missions and Mining.
Frostys Virpio
State War Academy
Caldari State
#653 - 2015-09-22 18:15:50 UTC
Boom Laison wrote:
Divine Entervention wrote:
remove killmails.

People = more willing to take risks. More risks and more expensive ships being used = greater isk faucet.


You do realise killmails is the only thing, that measures e-pen of most active Eve players?


And why is that important?
Zihao
Doomheim
#654 - 2015-09-22 18:39:17 UTC
Market McSelling Alt wrote:

Plex is nothing more than a legalized method to Pay to Win...


Is that supposed to be bad?
Teckos Pech
Hogyoku
Goonswarm Federation
#655 - 2015-09-22 19:40:00 UTC
Tippia wrote:
Teckos Pech wrote:
You overstate your case with regards to the RL market, IMO. Yes the supply IG is larger, but that does not mean that the RL market plays no role.


[1]It's not that it plays no role — it's that the role it plays is for the most part unknowable. It doesn't behave the way a market normally does, and we have no data for it. We can guesstimate something about demand and quantity as a reflection of in-game data, but we can't actually determine it.

Quote:
As for supply = demand => a price/quantity pair...yeah...useless. Never mind it is the very definition of market equilibrium.


[2]In altering what I said, you skipped over a very important part: it's not supply = demand → price/quantity. It's supply = demand = quantity, at a fixed price, at every point. In other words, there are no distinct equilibria because this holds true everywhere. The entire demand curve is just a long smeared-out equilibrium because it always intersected by an inherently matching supply. The supply side is not a market force in the regular sense. And we don't find what you'd see as a regular price quantity pair, but rather a wide smear of quantities that always matches the fixed price. So how do you do a worth-while supply-demand analysis on this?

[3]A market equilibrium is essentially a fixed point to the supply/demand function; the function will converge towards this point with each iteration. The problem with the RL PLEX market is that it has infinite fixed points. Everywhere and anywhere on the graph, we have an equilibrium. This makes it utterly useless for the purpose of telling us how… well, anything, really fits together — any suggestion or hypothetical value or shift we throw in will be an equilibrium.

Quote:
We can look at simply supply and demand analysis and see why the price has gone up.


[4]Yes. For the in-game market. We can't do it for the OOG “market” because it doesn't behave like a market and because we have no data. That's why I question the value of including it at all. It can be collapsed into a single parameter — quantity — which is then used in the IG market analysis, with some caveat that not all bought PLEX end up on the IG market, which is fine since the data we have from the IG market has already filtered those out.


I numbered your comments so as to leave them there and avoid the quote limits.

[1] Quantitatively, yeah we don’t know what’s what. Qualitatively we can still use a supply and demand analysis to get some idea of why prices are changing.

[2] Wow where to start. When you say supply = demand are you implying they are one and the same? That is just flat out wrong. Supply is typically, the marginal cost for the firm. Demand is derived from the consumer’s utility (welfare) function. They are very different things. Here things are a bit different in that CCP has a very, very low marginal cost associated with PLEX. However, that does not mean that the supply is the demand function. It means the supply is essentially perfectly elastic or damn close to it.

[3] As for fixed points….No. Fixed points are used in economics, or more accurately fixed point theorems. However, they are used to prove the existence of equilibria in general equilibrium models, not for a partial equilibrium analysis such as I used here and which we are discussing. Maybe you could use a fixed point theorem, but it is like using a sledge hammer to try and open a can beer. Further, there are not infinitely many fixed points. A fixed point for a function f, is a point c such that f(c) = c. An example of a function with infinitely many fixed points is the 45 degree line f(x) = x. So in my graph, there are not infinitely many fixed points for supply, there is one where the quantity of PLEX supplied is 19.95 (which is of course nonsense as nobody is going buy 095 PLEX).

[4] The RL market behaves just like a market. People buy and sell stuff in a market and people buy PLEX and CCP sells them. If CCP set the price at $100 would they sell as many? No. Why? Demand is downward sloping with respect to price (or more formally, demand is decreasing as price increases).

"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
Tippia
Sunshine and Lollipops
#656 - 2015-09-22 20:01:18 UTC  |  Edited by: Tippia
Teckos Pech wrote:
[1] Quantitatively, yeah we don’t know what’s what. Qualitatively we can still use a supply and demand analysis to get some idea of why prices are changing.
And again, this holds true for the in-game market, not the OOG one. We're in full agreement here, except that I still think we might as well ignore the OOG at the time being because it doesn't give us anything worth-while.

Quote:
[2] Wow where to start. When you say supply = demand are you implying they are one and the same? That is just flat out wrong. Supply is typically, the marginal cost for the firm. Demand is derived from the consumer’s utility (welfare) function. They are very different things. Here things are a bit different in that CCP has a very, very low marginal cost associated with PLEX. However, that does not mean that the supply is the demand function. It means the supply is essentially perfectly elastic or damn close to it.
What I'm saying is that any demand is always met; that the supply is not affected by either price or quantity, but rather solely by what the demand is, in that this demand is always met; and that for all intents and purposes, we might as well remove the supply function because it isn't relevant. The current demand is always the equilibrium, and it just gives us the current quantity.

If we had a sensible demand function (that we'd get from the IG market), we might be able to approximate some kind of relationship on the OOG market, and we could conceivably use that to build hypotheses of what a RL price change would do. But we don't and we can't so we aren't able to. So the OOG side becomes largely pointless to even discuss.

Quote:
[3] As for fixed points….No. Fixed points are used in economics, or more accurately fixed point theorems. However, they are used to prove the existence of equilibria in general equilibrium models, not for a partial equilibrium analysis such as I used here and which we are discussing. Maybe you could use a fixed point theorem, but it is like using a sledge hammer to try and open a can beer. Further, there are not infinitely many fixed points. A fixed point for a function f, is a point c such that f(c) = c.
Yes, I used the word “essentially” very deliberately to let me use the idea of convergence. It's not a fixed point in the sense that ƒ(c)=c, but rather in the sense that it's a convergence point that we can iterate to find. And the problem is that, with the OOG market, we can't do that. No matter what point we pick, we have convergence; everything is an equilibrium; and the equilibrium is largely meaningless anyway since the price doesn't move.

Quote:
[4] The RL market behaves just like a market. People buy and sell stuff in a market and people buy PLEX and CCP sells them. If CCP set the price at $100
And that's just it: the price is fixed and it has no reason to shift. At least one (conceivably two, depending on your perspective) market force is completely out of action.

To do more and to actually start treating it as a market, we need more functions, and we don't have those. Until we do, we can only really treat it as the fixed, infinite-equilibrium setup it currently is. So again, the OOG side becomes largely pointless to even discuss.
Teckos Pech
Hogyoku
Goonswarm Federation
#657 - 2015-09-22 20:22:21 UTC
Market McSelling Alt wrote:
Teckos Pech wrote:
Market McSelling Alt wrote:
Zihao wrote:
Market McSelling Alt wrote:

As you can see, money supply is credited as the often likely cause. In the case of our Eve Economy, it likely is not. Oversupply of raw materials is likely the cause of deflation in Eve.


I'd be curious to know why you think monetary inflation isn't also a culprit. I don't have any reason to suppose that both aren't a strong factor or that one is stronger than the other, but plentiful reminders can be found here that "incursions and high class wh are the best isk/hr," and these are rather explicitly pumping isk into the economy.



Because monetary inflation wouldn't cause prices to drop... Shocked



Increasing money supply and a drop in the general price level. Sure. Roll

BTW, where is your index of prices? Got one? Admittedly I don't, but I'm guessing you don't either and you are basing your claims on anecdotes.



Are you prepared to make the statement that there isn't more Isk Faucets than Isk Sinks in this game each month? Would be a bad statement to make.

Are you prepared to admit you are too lazy to look up price history for basic items? Because you don't need someone else creating a spreadsheet for you when you can just open up your market in game and take a look.

So please, before you try and patronize me, think about what you are actually saying. Monetary Inflation has always happened in this game due to its very design. Asset Deflation hasn't always happened but it definitely is right now.

Plex inflation appears to be a symptom of both Monetary Inflation and Asset Deflation. It isn't rocket science, its economics.


What? I never wrote not implied that there is not more ISK entering the game than is going out.

Looking up price behavior is not going to tell you if there is deflation. This is why there are various price indices out there, and yes, I'm too lazy to go out get the data and construct a geometric mean price index. Roll For example, some HACs have seen price decrease, some have seen price increases. So, is that deflation, inflation, neither? You'd need an index. Preferably one that treats price increase and decrease symmetrically that lets out the Laspeyres and Paasche indices and the former overstates inflation, while the latter understates it. So you'd have to use a superlative index such as the Fisher or Tornqvist indices.

Oh...yeah, and price...not enough. You need quantity too.

Now, if somebody wants to pay me to do this...fine. Shoot me an in-game e-mail. P

"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
Teckos Pech
Hogyoku
Goonswarm Federation
#658 - 2015-09-22 20:39:37 UTC
Tippia wrote:
Teckos Pech wrote:
[1] Quantitatively, yeah we don’t know what’s what. Qualitatively we can still use a supply and demand analysis to get some idea of why prices are changing.
And again, this holds true for the in-game market, not the OOG one. We're in full agreement here, except that I still think we might as well ignore the OOG at the time being because it doesn't give us anything worth-while.


And…

Tippia wrote:
What I'm saying is that any demand is always met; that the supply is not affected by either price or quantity, but rather solely by what the demand is, in that this demand is always met; and that for all intents and purposes, we might as well remove the supply function because it isn't relevant. The current demand is always the equilibrium, and it just gives us the current quantity.


You are contradicting yourself. The quantity IG is dependent (in part) on what people buy in the RL market. But you are saying that the RL market is telling us nothing worthwhile. But the RL market is telling us the something about the quantity IG. You can’t have it both ways saying, “Oh we can analyze the IG market, but we get nothing worthwhile from the RL market….” when the RL market is a significant factor in determining the IG supply!

Maybe we can’t attach hard numbers here, but we can still use partial equilibrium analysis to help us understand what is going on.

And yes, the demand is always met. If you think about it, I’ve been saying that. A perfectly elastic supply function means that only demand determines quantity shifts.

For example, market demand is nothing more than the sum of individual demands. Thus, market demand also depends on the number of people. We can in fact write it down as such:

D = d(p,I,N,a).

p is the price of PLEX
I is income
N is the number of people (you, me, others)
a is a vector of other parameters (prices of other goods and services, etc.).

If N goes down, then we’d see a shift to the left (inwards) in the demand schedule. At all prices there would be less demand. And as you point out demand is always fulfilled so that is it. We get a decrease in quantity. This will in turn have an impact on the IG market. By how much? IDK. But qualitatively it will most likely result in a price increase.

"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
Tippia
Sunshine and Lollipops
#659 - 2015-09-22 20:50:58 UTC
Teckos Pech wrote:
You are contradicting yourself. The quantity IG is dependent (in part) on what people buy in the RL market. But you are saying that the RL market is telling us nothing worthwhile. But the RL market is telling us the something about the quantity IG.
The RL market isn't telling us anything that we can't get by ignoring the RL market and just look at the IG market. In fact, anything we'd like to say about the RL market has to be back-ported via guestimates based on what we see on the IG market. So it's not a contradiction: it's saying the same thing from two perspectives.

We can analyse the IG market because we have the data and we have a sensible model for it — combined, we can reach the same conclusions we can always reach. We can't really analyse the RL market we have no data and we have no sensible model for it since it behaves so differently — no valid conclusions can be reached.

Quote:
Maybe we can’t attach hard numbers here, but we can still use partial equilibrium analysis to help us understand what is going on.
…except that we don't even know what is going on. There is nothing to understand.

So why even bother with the RL “market” at all? Until we can make more than (largely baseless) assumptions about the demand function, it is just a red herring. It's just a black box we attached to the input node of our IG supply function.
Vortexo VonBrenner
Doomheim
#660 - 2015-09-22 21:04:31 UTC