Guild Wars 2

Adam Smith confirmed there is inflation due to recent event, albeit not as bad – as some people imagined.

What we know:
“In the last week, the median player earned less than 3 gold in the new content (that’s discounting all players who earned less than 1 gold).” (13 days ago)

A rough thought experiment (Take it with a spoon of salt)

Assumptions:
1) Based on some random facts that gets threw around the forum, there are probably 460k active players?
2) Conservative Estimate: 50% of people earned less than 1 g.
3) Assume the median number of gold generated in queen pavilion is 3g
4) Assuming median is a good proxy for sampling average,
5) Assume normal distribution curve applies.
6) Assume the current Invasion farm generates 3g (Personal experience is 3g to 5g just coins generation, I am taking a conservative estimate), and 50% of the players continue to not generate much due to boredom. They don’t like to zerg pavilion, they don’t like to zerg invasion.

1 Standard deviation is 68.02%. That means 156,000 players (460,000*0.5*0.6802) (Rounded due to inconcise estimate to begin with) made 3 gold on one week period.

That means an injection of 2,098,000 gold over the 3 weeks period. (I added back 1 gold per 50% population in one week. I know I didn’t do all 3 standard deviation of the 50% more active players)

Issue:
We do not know how much gold the player base generate per week prior to the events.
We do not know the scale of deflationary factor of the Trading Post Tax.
We do not know the standard deviation, therefore could not calculate the rest.

However, I am curious on their stance on deflation.I hope they would take active stance to stabilize inflation around 0%. This is not a real world economy, where small inflation is actually good. (Since your vendor prices are static)

…Based upon prices on BLTC I might actually agree with you in theory that non-Gem “Asset Classes” continue to deflate. Crafting materials, including T6 ones, are not as high as they used to be. This might also be due to massive flood of supply as a result of the invasions.

However Gem prices gone over the roof: A shift from 3g>5g in less then two months of time. Given this is how ArenaNet makes “Earth Gold” (and how this game is funded)… this is far more important aspect to observe.

Indeed it is so…

Oh I am just curious if ANet will take deflationary action or just let the inflation sit.

Hell Avenger.7021:

Oh I am just curious if ANet will take deflationary action or just let the inflation sit.

…the next patch is Inflationary! (for non gems transactions). Rush on mats will drive up prices and the loss of supply due to end of invasions will push up BLTC prices.

Gems however will deflate and fall off a cliff. Thus make your trades now!

Indeed it is so…

Inflation – general rise in prices over a period of time
Disinflation – general decrease in the rate of inflation towards the price before inflation
Deflation – general fall in prices over a period of time

I don’t think you will ever see deflation in this game. You would have to have more gold sinks than faucets. Disinflation has happened and will continue to happen.

edit: on second thought, there could be deflation by next patch. People may be less inclined to vendor blue/greens and sell them directly on the TP (which is indirectly a faucet). We shall see.

The Master.2893:

Hell Avenger.7021:

Oh I am just curious if ANet will take deflationary action or just let the inflation sit.

…the next patch is Inflationary! (for non gems transactions). Rush on mats will drive up prices and the loss of supply due to end of invasions will push up BLTC prices.

Gems however will deflate and fall off a cliff. Thus make your trades now!

Indeed it is so…

An increase in prices for mats will not lead to inflation or caused by it. The more mats that are created and traded, the more gold is removed from the economy. Removing gold does not cause inflation.

Yes, prices of mats will increase but it’s a result of a shift along the demand curve (and probably the supply curve)

The 15% TP fee drives inflation to 0 in the long run, regardless of any other changes made to the economy.

The economy has gone through a lot of shocks in recent weeks, and will go through another next week. Those may have driven the price level up a bit, but it’s not a continuous process; it’ll reach a new equilibrium given enough time. I don’t have the aggregate data to judge whether or not this new level is better than the old one, though I suspect the distribution of wealth is much, much healthier now.

The crash in the gem price reflects both a substantial increase in the demand for gems due to the anniversary sales, and an increase in the productivity of the average player. Essentially, the gem/gold exchange rate reflects how effective players are at generating wealth – and while inflation in game can be checked by increasing the supply of goods as well as the quantity of gold, the exchange rate will reflect them both moving up or down together. That’s what we’re seeing here.

Vol.5241:

Inflation – general rise in prices over a period of time
Disinflation – general decrease in the rate of inflation towards the price before inflation
Deflation – general fall in prices over a period of time

I don’t think you will ever see deflation in this game. You would have to have more gold sinks than faucets. Disinflation has happened and will continue to happen.

edit: on second thought, there could be deflation by next patch. People may be less inclined to vendor blue/greens and sell them directly on the TP (which is indirectly a faucet). We shall see.

One more thing can cause deflation (but is a bit more subtle) – the lack of a party to want to buy an item at the price. Conceivably a gold faucet still on but at a very slow but consistent rate could spur the population to value their gold more, even if the total supply of gold is the same. Despite the supply, demand, and availability of gold, having a more prized currency than goods will cause some deflation.

Some of the issues seen by players now is the perception that gold comes easy, that we will get tones of gold in newer updates, and that we want products now as they are released without regard to the gold cost (I admit that a partial demand point, but is ruled by relative worth of golds to goods).

What I think would be great is a player re-evaluation of gold so that some deflation can occur without changing supply, demand, or the gold pool. But alas this would hurt market sellers.