EVE General Discussion

Certain items increase the price in value when the supply decreases since it makes it harder to acquire certain percentage of that supply.
So, the lower the supply, or the more "sold out" it becomes, the more the increase in price value is justified.

Certain other items, or even more so, at certain other times, the same items will increase in price even as the supply increases.
This may also be caused due to the demand for those same items increasing and therefore the same percentage of supply scheme occurs, even though the finite supply had increased.
The fact remains that , since the demand increased, perhaps still more than the increased supply offered, the price was driven to be increased. (Or, so justified to be.)

There are many other cases and examples and some are not related to supply increases and decreases.

Some other items or conditions are related to seasons, which affects the way the supply can be offered, due to a transport need or other requirements.

Other cause can be the way that items become obsolete, especially for those who do not understand how the item would be valuable otherwise.

Certain items value are based on how much everyone else is using it or participating in it.
Others are based on their organization rather than being based on the numbers of buyers.

Many asset based system base their evaluation on sales since it is related to traded money which in turn can be demanded from them to "invest" or manage or expand or other , into a scheme, service, or products.
This in turn can be for or including distribution, production, storage, logistic or other service related to products.
Financial services relate to those items or services even though they may be based on more analysis than the practical part of the transacting or other activity which is related to be valued, depending on who values what and how, and so on.


Edit:
At other times, the market affects the item value.
Less sales may mean that the item value will decrease and therefore the price will lower.
That is not always the case as other factors can cause the value in price to go up at the same time.

For example, again, less sales in one item may cause the price to increase since it will take more cost to cover for storage.
At other times, the lesser sale will increase supply and if even one large buyer manages to transact enough, it may allow the sellers to keep their prices low, or to even decrease it.


One factors to take into account is, the need for the seller (who offer) to make a profit.
If the costs of the seller to expand his business services are over 400% profit of the cost of his items,
then, to increase the value will allow the business to expand.

PLEX is absolutely not a Giffen good. For a good to be a Giffen good, the good has to have the following:

• It is an inferior good (whoops, off to a bad start).
• There are no real close substitute goods (paying for your sub with RL money is a very good substitute).
• The good in question is a substantial portion of the buyers income, but not so large it prohibits the purchase of normal goods.

So at best you have one condition that holds.

A necessary and sufficient condition for a Giffen good is that the good in question is so inferior that the income effect dominates the substitution effect.

In short, all Giffen goods are inferior goods (but not all inferior goods are Giffen goods). An inferior good is one where as one's income goes up they consume less of it. For example, top ramen could be considered an inferior good if as your income rises you eat less of it and eat more palatable foods.

Edit: In fact, I think there is a much, much stronger case that PLEX are superior goods, where as one's income rises past a certain level one can start to consume them. As such there is literally no way for PLEX to be a Giffen good.

Its not so clear. First, let me make sure we are talking about the same thing, I'm taking about buying PLEX with real money for the purpose of selling it in-game to get ISK from another player. That is the PLEX as a good in the real world, not how it is viewed in the game itself. Now consider:

Don't place PLEX against total income, but against that part of my income I can allocate to entertainment. Now buying a PLEX can be a substantial part of my budget. We have your last point.

Substitutes: The only (legal) way for me to spend real money and get ISK is to buy a PLEX. There is no substitute. So we have your second point.

inferior good: There are other ways for me to spend my entertainment dollar: Movies, going out to dinner, and other games. Which is the superior good: Dinner and movie with my girlfriend, or a Nyx? Well, here its not so clear. Many gamers pick the Nyx.

But even if PLEX is not a true Giffen good, there is still a point: The PLEX has an optimum ISK value that makes the most money for CCP.

Consider a graph where the vertical axis is profit, and the horizontal is price, say dollars per billion ISK. Usually, such a graph starts low, rises to a maximum, and trains off with increasing price. There is a maximum. Where its it? What conversion rate for dollars to ISK results in CCP making the most money? Well, the peak trading at Jita for the PLEX occurred when it was at 500 million, or $40/billion ISK.
Now, we are down to $17/billion ISK. Have we passed the peak profit point? Are players spending less to get ISK, because they really don't need that much, and would rather spend their money on other forms of entertainment?

I so do not play this game enough to make anywhere near 1B per month to pay for PLEX! I play at most two hours per day and when I'm online, I play very casually. Run a few missions, mine some ore, make a few standard items, take the scenic route back to Jita, a little site seeing, etc.

To determine if something is an inferior good you have to compare it to changes in your income. That is the definition.



So the idea of using part of your income means you are not talking about the same thing.

Further, the notion that as your income rises (and your implicit hourly wage is also rising) that you'd be less inclined to use PLEX to get ISK is dubious. It means you are place an increasing value on grinding for ISK. Granted some people may really love it, but I think the vast majority of players look at grinding for ISK to be a tedious chore done out of necessity.

So the question is, if you suddenly hit it and landed a job where your salary/income doubled would you buy more or less PLEX?

Second, Giffen made a classic error in his analysis that any student studying econometrics is soon made aware of. Market outcomes are the result of demand and supply. That is, noting actual price quantity pairs is insufficient to identify either the demand function or the supply function. You'd need a third variable, for example a variable that will effect supply, so you can empirically estimate the demand function.

And lastly, most of the time a Giffen good is described as where the more is demanded as the price increases. However, it can also be stated as, less is demanded as the price decreases. Do you really expect us to believe that as the price of PLEX goes down, both in and out of game, that less will be bought?

I R LIKING HIGH PLEX PRICE.

* DREADKNOTS - 40$ - GUARANTEED TO NEVER COME UNDONE
* LEGIONS - 20$
* BHAALGORNS 2 FOR 20
*i CRUISERS - 15 FOR 10
HELL I PLEXED MY FIRST BLOOPS LAST MONTH THAT'S HOW GOOD THIS IS.

Although PLEX can be used for much more than ISK, how many PLEX are purchased with real money and NOT sold for ISK? My guess is very few. Now, after that first sale, all sorts of things happen to PLEX. But for someone thinking of spending real money for a PLEX, my guess is the vast majority of time its to get ISK.

PLEX to get Aurum? Its cheaper to just buy the Aurum. Purchase a PLEX for a month of game time? It's cheaper to do a one month subscription. (Although I have seen someone purchase a PLEX and immediately use it for time.) PLEX for good? Its a push here, the same cost as just donating the money. I can see some people doing it just so the donation is associated with Eve Online.

For the players purchasing PLEX with RM, what they are thinking is "Money to get PLEX to get ISK to get fun". If they can get their Eve fun for less money, and hence have money left over for some other form of fun, they will. As the ISK value of the PLEX increases, the amount of money you need to spend to get your fun is reduced.

I have a T1 PI farm on a single account that PLEX's 2 accounts for a total of 2 hours login time per month. It really isn't that hard.

There is character transfers, multiple account training, character resculpting, and live event purchases.

As for the PLEX market even the PLEX-to-ISK market is a bit more complicated than you make it out to be. There are people who are likely ISK rich, and they may or may not be RL cash poor, so the PLEX market for them works well to let them play without a real life expense. Also, there are people who are RL cash "rich" but are ISK poor (and/or time constrained) for whom the PLEX is a nice alternative to let them get the most out of the game. These two groups will have opposing views on the price of PLEX, the first group prefers it lower, the second higher. In the market trades take place where the buyer and the seller are each "happy/satisfied" with their purchase.

Behind all this are other factors as well. How quickly can players acquire ISK is probably the biggest. And that is also going to be governed by how much ISK is flowing into the economy as well...and there is alot of ISK flowing into the game economy. Further, many players see ISK as a good hedge against inflation/place to invest their ISK while taking a break or looking for other ventures in which to invest their ISK.

All of these things would lead to upwards pressure on the price of PLEX.

Personally, I doubt this. There might be some effect, but dropping like a brick...no.