Market Discussions

1 For collateral.
This is what happens at a pawn shop.

You can simply walk away and not pay repay the loan if you choose and the lender keeps the collateral.

This works in the real world and in EVE.

2 Personal accountability with the threat of force.
This is a loan shark.

If you try to walk away the shark will attempt to hunt you down and punish you.

This usually works in the real world it never works in EVE.

3 Legal contracts
This is a bank, a stock market, investing in a business.

If you dont repay your debt the loaner will either attempt to seize your assets through the legal system or you will be charged with fraud in the legal system.

This usually works in the real world. It is IMPOSSIBLE in EVE.

4 Trust
This is how people lose their money.

If you dont repay your debt - nothing happens.

This is a bad idea in both the real world and in EVE.

A contract without a system of enforcement is nothing more than a handshake, generally less binding than even that. Contracts are based upon the threat of punishment, nothing else.

Allways nice as usuall to get investment lessons from an experienced investor in eve .







Think i am gonna start a thread about the best way to run incursions , who gives a **** if i never done one.

Yes, but at no point does that address the consequences of default. Without laws, there is no recourse, and the only punishment is lack of trust. Since I can spontaneously generate another identity, there are no consequences beyond the minimal investment in time to gain more contracts. Additionally, there is such a large group of people in-game who may or may not subscribe to this system on Contractual Society that I can default on nearly unlimited contracts and still have more people who are looking to invest/contract/etc. The combination of anonymity and lack of central oversight make any contract merely an excercise of trust, not a contract as applies in the real world.

While I would agree with the points you made, people making foolish decisions doesn't make them invalid decisions. Put in terms of EVE - a character with a well established reputation loses that reputation if they breach contract. That's a cost. A consequence. Breaking any contract in RL has a consequence (determined solely by the contract), the same can be (but isn't necessarily) true in EVE. Making a contract with a character who just rolled up is like making a contract that is extremely poorly constructed to enforce consequence.

Put into an example, making a contract in EVE with Chibbra is a relatively good contract. He has a lot to lose, the consequences for him would be costly, possibly even disastrous. On the other side of the coin, making a contract in EVE with MacroMiner666661997 who was created 2 days ago is a very poor contract indeed. (apologies to MacroMiner666661997 for smearing his reputation for the purposes of an example)

Sure, they don't look very similar at first glance but when you dig down into it, fundamentally there are similarities.

I'm not sure why I need to be relevant to prove a point?

It's a good point, I just happen to be the humble, simple, common MD lurker raising it up.

I have to disagree. The driver behind effective contracts is their enforceability. Nations that have poor or muddled contract laws are at a distinct disadvantage because there is no way to force compliance to the contract. Even if the contract states consequences for default, there MUST be a legal system in place to enforce those default terms. Outside of item exchange contracts, EVE doesn't have the mechanic to enforce things like collateral transfers and such. This is my point. A society built on cotnracts is impossible without some type of legal framework to enforce the default clauses. In fact, an argument can be made that this is the sole function of a government: to provide a framework that enables effective implementation of a contract system.

I'd Say Trust is a critical factor in about 99% of all RL loans,

trust that can be quantified in terms of credit history, demonstration of past earning potential etc.

Some loans are colateralized, (certainly real estate, also automobiles) in a way that much of what was loaned can be recaptured.

However, the costs incurred by a company in regaining and selling the collateral are so high (legal expenses, employee time associated with procedure (annual salary and hr overhead, prorated by % of year the particular event took for each of the various employees inovled) selling expenses after regaining the asset.

.... it is an extremely rare type of business... the pawnshop loaning 20% of the value a patient buyer might get on craigslist or something... that makes a loan without TRUST being a paramount consideration. The interest rate charged will often be the factor that a company uses if they know 1 out of 10 loans will go bad (or whatever). If the other 9 are paying a high enough interest rate to reflect their lower Trust score (credit score ) ,, the higher risk is paid for......

Legal: the threat of collection is important.. the THREAT.. because even if the lender doesn't get their money back, the borrower doesn't get continued use of the item... and they know also, that such a legal smirch cannot come lightly... bankruptcy can't be used repeatedly and giving the gutting of personal bankruptcy rules with centuries of tradition, can be even less useful.. yet still, the legal part doesn't so much let the Lenders collect, but it Boosts Trust.. they trust more because they know there is less risk that the borrower would want to abscond with the money, or borrow where they cannot pay back.

--- Key point -- Key difference with RL Trust, vs game Trust : our characters are disposable, the player can remake himself usuing another avatar and the assets can easily be transfered to the new one with a clean rep.. and there aren't really good player run reporting agencies nor would they be much use as it takes years to get an idea of a persons habits yet years of play in one game is an enternity and its unlikely that after 5 years of play a player really will need to borrow isk and a major leap of faith for people to assume that the person will play the same game with the same level of comitment for years ahead... common,, people burn out on games.. its such a tiny percentage of players that will stick with a game for a decade that you aren't a very good credit rater (judgement of trust) if you're willing to assume that a large percentage will.

Disposable characters, short history on a human scale, long periods as percentage of game interest..... just doomed for widespread failure.

Yet... you can still make trust decisions.. .. and if your interest rate is good and your sense of what point a player is in his interest cycle and what type of a game player he is (meta) from conversations about RL and past games he's played etc. you can do ok.

It is the disposabilty of characters and the disconnection of PLAYER (person) to Character that gets in the way and no legal or collateral system would impede that connection unless you had some real id thing where PLAYER lent to PLAYER, then you'd into RMT issues.

I think that all four types can work in EVE too, in a specific restricted setting.


Obviously, we agree here.


You're right that a character can't really be threatened by force. Character trading allows you to disappear and obtain a new identity with no trail back to your original character. Hoever, this can work on a larger level, with corporations and alliances owning static assets they can lose. While not a loan, 0.0 rental agreements work on this principle. Don't pay your rent? Your towers get blown up and your stations get captured.


There is one type of contract "legally" enforcible by CCP: character sales.

Other than that, it is possible to use the politics of a corporation or an alliance as the "law". You don't repay your loan, you get kicked out. Obviously this assumes that you value your membership in the particular corp/alliance more than the ISK you borrowed.


If you ever do anything other than running around solo, you pretty much have to build up a network of trust, of people you can depend on. Be it your friends, your corpmates, or your alliance CEO. If a person you've been flying with for a year asks you for a MISK to buy a skillbook for his alt, do you refuse? And does he pay you back?

As in point three, the question is, do you value your money more than the people who trust you?



I do get your point, when talking about public contracts between two people who don't know each other, obviously the only safe alternative is a collateralized contract. But there are niches where all four types of contracts can be used.

Yet another clueless noob that cant even rise t the level of making sense.