Showing Posts For Poor Leno.3582:
I’m fairly certain that our fiat curreny is not backed by gold, as per 1971 abolishment of the gold standard.
@ zavulon – why? because it allowed USD to have a real value? look at how much the dollar devalued since 71? since 1990 even?. Right now, our Fed, the guaranteer of our money, is making the same mistakes that it made during the 08 crash. Just look at interest rates. 0% are you kidding me, for five+ years!? It’s been declared indefinite! imagine if our government, once its debt increases to 18-20 trillion and if interest rates were allowed to rise to where they would naturally be, had to start paying 4% interest on all of that? That’s 35% of our entire tax revenue out the window.
Instead of taking our medicine now and allowing the market to correct itself, we are padding it up with stimulus and QE and just allowing the problem to fester.
just look at the price of gold over the past 12 years and you’ll see where the real value is.
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well, too little supply would cause prices to rise.
Nobody here has any idea of the monetary policy, courtesy of John Smith. Nor do we know anything about the inflationary conditions of the economy, unless someone wants to make their own truly representative price index and share it with us.
Even if we introduced a financial sector to this game in which players could deposit raw materials at a bank in exchange for deposit notes (money), and assuming that all banks had a standard note, the value of the note would be subject to drop rates of the materials that are controlled by Anet.
I do, however, think that a financial sector is direly needed for this game, seeing that there are so many people with large sums of money. This is a problem that I see in many online games.
okay. solution stands at diverting a large chunk of you portfolio to items that will rise in price with your “inflation”
Fiat currencies are all backed upon the central bank’s guarantee, but unfortunately their guarantee may be no good. In essence, you are trusting that the central banking authority will preserve the value of the money by not recklessly tossing it about/generating huge quantities out of thin air. Generating huge quantities in our virtual world is about missions, drop rates of gold/silver/copper, and all taxes and sinks that remove currency from the game.
In the U.S. the central bank releases information regarding its targets, for both growth and inflation, unlike the UK and Europe who only targets inflation rates, not that they’re any good at it either.
Since we live in a customer service state, no such information has been “granted” to us by our “benevolent” rulers and we will not know such information until they do.
Quite a few expert microeconomists have shown that they don’t understand macroeconomics (Hi University of Chicago!), or that they are happy to pretend they don’t when it serves their political ends. But that is a wholly off topic discussion.
People’s intuitions about how a game economy will work – based on empirical evidence from the world economy – can go wildly awry, as a game economy has so many different constraints and pressures. It is much simpler in many ways. For instance, two of the most important influences in the real world are the financial system (being able to explicitly borrow and lend money) and land as a fundamental limited resource; without either of those; the economy is much simpler to analyze without either.
In a similar vein, much of the market manipulation and increasing returns in the real world depends on market power and regulatory capture, neither of which are really relevant here. You can’t even buy the means of production in game, only the fruits – and it’s essentially impossible to monopolize a market without controlling the means of production.
‘Market manipulation’ in this game appears to be nothing more than capitalizing upon massive information asymmetries and pocketing bid/ask spreads from markets with an extremely high implied interest rate. There have been high return, long term investments based on that high interest rate and low information, as well as profits in markets suffering from liquidity problems (especially early in the game).
The real issue, as far as I can tell, is that drops are unrewarding. Exotic drops are extremely infrequent and come soulbound half the time, while rare drops generally are just an ecto that represents less than a tenth of a percent of a long term goal. Besides a couple high priced precursors there’s nothing attractive that can drop. Couple that with prices that put many of those goals completely out of reach for most players, and you have a dis-satisfying reward structure.
The problem there isn’t the economy, or the pricing, or the trading post, but that the drops are not doing a good job of rewarding players for playing the game. Essentially, the reward structure has people getting their exotic gear at 2-4 gold per piece, and after that it’s a long, long grind to several hundred gold before achieving the next tier. The game wants more variance in drops, and it really needs more goals between basic exotics and 1000 gold legendaries that most players will never touch.
I think the main problem that people are seeing with regards to “market manipulators” is that there is no financial system in which to earn interest over time, apart from the TP, which is why people are seeing what is going on now, with lots of traders trying to make money on their massive bankrolls. In this respect, I agree wholeheartedly with this post.
But all in all, this discussion belongs in a different thread.
I agree that this thread should get back on topic. If Mr. Smith would give a reply saying yes or no then further discussion could be directed to other threads. I am personally very curious as to the macroeconomic data that has worked itself out since release, not that I wish to prove anything by it, but being able to see the actual rate of inflation, population variations, money supply/velocity, etc… Especially when it comes to all of the various predictions given by many players in this and other threads.
it might just be that there is a cyclical aspect to the data that hasn’t yet completed, and we may just have to wait for the cycle to renew.
If I do remember correctly, CCP has a very good reputation for presenting macroeconomic data at the Eve Fanfest.
I do reference CCP alot, but I just find it interesting that they report their information as if it is their duty to inform the player-base.
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Well. What do people expect when everyone is trading finished production goods like they are stocks/commodities. There is absolutely no cost in transporting finished goods to the TP (I know of the tax, but the amount of costs that go from production to retail are far more than simply taxes). The goods just teleport into the system. Not even the transaction cost of time/distribution has been accounted for. If you want to see less 1c undercutting. Apply a time-cost to setting up trades.
For example, if we want to sell 2000 of some random ore and post it, the system shouldn’t take account of the new sell order for a set amount of time, seemingly 24hrs.
Products that shouldn’t be sold like High-Frequency-Traded stocks shouldn’t be sold like HFT stocks.
perhaps you might care to elaborate on exactly how “players” determine the gem exchange. Simply having players buy/sell into an imaginary pool of gems does not convince me that prices are determined exactly by players. Also, as far as I know, Anet has kept their mouths shut about pretty much everything regarding the gem trade, save a few details.
When you buy, you hit the buy button. When you sell, you hit the sell button. I don’t determine a price to buy or sell. I’m not buying the whole argument that all of the gems were once purchased with real money. If so, then where is the exchange data? Why do the buy/sell mirror each other as if the volume of trades on both sides is equal 100% of the time? Compare that to every other item on GW2spidy’s wonderful database.
If this was an actual exchange, then could I have a list of sellers, please?
What makes the gem exchange so different from the TP, other than the fact that it is a source of revenue for Anet? Not that I’m ‘implying’ anything. Why are gems sold in a different way than everything else?
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In all reality, most of the problems that we see here are solved by department stores. Nobody would drive 5 miles to save a penny, but they would for much lower prices. The kinds of stuff that games trade as though they are commodities is kind of ridiculous.
it would be funny if you all formed a giant cartel, though I doubt you would be able to agree on prices.
If you post a good for 20s, then you should already have taken into account that the amount less than the previous listing that you are undercutting is, in effect, the price that you are paying to be first in line. If someone 1c undercuts you, then clearly it wasn’t enough.
We really need to stop behaving as though this market is similar to a real-world market. In reality, we have a financial market that exists because traders want to receive above-average returns on their savings. There is a market, and a demand, for savings in reality that exists with banks offering interest rates for savings. This does not exist in video games, as of yet. The main reason why there are financial traders is because of the return/risk of trading stocks compared against the demand for savings, I.E. the interest rate offered by banks, is worth taking advantage of.
The various goods on this market are being treated as if they were the stock of a company, which they are not. The main reason for all of this volatility is because there is no way, outside the TP, for an individual to make interest on their savings. There is a huge supply of savings, but nowhere to store it.
I honestly think there needs to be a supported way for individuals to form money management groups that offer interest rates compared to what they can earn by using their stock of savings.
just an idea, though.
Guess what? You all, myself included, already payed your $60. Anet is not like other MMO devs that have to worry about subscription base. If you want to leave, LEAVE. THEY DONT CARE. If they really did care about the player base, they would be transparent with how they are handling the game.
Have fun spending endless hours farming so you can have your legendary items that you cant sell to anyone once new items are released.
@Karizee
Thanks for that graph. All it did was prove me right. I said the prices will fluxate…which means they will go up and down, but ultimately, the prices are TRENDING upwards. And between oct 28th to Nov 11th..it plateaued (evened out) but that flat rate was still far above the average than it was when the game first released. And since Nov 11th..the prices have exploded, and are trending upwards quickly…
When I mean have prices come down, what I mean is…is does it come down below a mean…a statistical average. Then no, it has not. It fluxuates, but the mean does not decrease it either evens out or goes up. When I began the game, the ‘average’ was 24s for 100 gems. Back in August…
In Oct/Nov, the mean was 74s…
Thats huge.
The game had also been out not that long in August. More people on all the servers means the trend will go upwards. More people pushing more activity through the Gem for/to Gold means it will trend upwards as a natural consequence of increased activity.
. . . someone who’s an economist tell me if I’m right?
that and the increasing number of lvl 80’s with tons of money. Can’t see what you two are disagreeing about. You both seem to agree on the fact that prices have been rising.
I honestly think that gems were largely undervalued at the start. Arenanet did not anticipate how quickly players would amass money. Therefore, gems shot up, and I think they will continue to rise as the money supply keeps increasing. Can’t see what else Arenanet will tax to sink money from the system. I am not a huge believer that there is a surplus of gems and I won’t be until Arenanet releases information regarding the buy/sell orders for gems.
btw, if they have, someone please direct me to it.
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This and the fact the RMT provides much cheaper gold to begin with. How does Arenanet believe that they can provide such expensive gold when there is soo much incentive to purchase from RMT?
igxe.com has 20G for $9, i believe.
You can say whatever you want about RMT stealing accounts, but the fact of the matter doesn’t change.
I mean listen here, Anet. If you want people to buy your gems and sell for gold, remove the transaction fee. People will manipulate the market, but they will only be speeding up the rate at which price moves from one point to another. People will sell if they can make more G’s while doing it. The higher the price rises, the greater distance there is between buy and sell price (I know it’s structurally 30%). but it’s like the difference between $3-4, and $300-400.
If anything, this means that gems should be much more expensive, if there is that much gold running around. I mean, honestly I don’t know, what do lvl 80’s spend their money on? Especially if they rake in the gold.
I think Summi is right about the “gems in circulation.” I’m not sure if this has been confirmed yet, but there is just no way that without buy and sell orders I will believe that when I purchase gems I am purchasing them from someone who sold them. Clearly, somewhere along the line gems are being generated somewhere, and if prices are rising so fast, it means that there are not enough people buying gems with real money and selling for gold.
Arenanet just generates the gems that are purchased, in my opinion, even with game gold.
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good point jabberwock.
Ok. the answer is with soulbinding. I understand that it requires resources to craft things, but that was not what I was referring to. In Eve, the ships are the last in the line of production, so once they are destroyed in order to recreate the ship you need to go through the whole line of production again. So in order to sustain complexity it requires a rate of resource extraction. Similar to the second law of thermodynamics.
So my next question would be what happens when most people have these soulbound weapons (As in they have reached the final tier)? will it be far enough into the future that Anet will have updated the game to have more of these items but with better stats?
So basically once Anet introduces new items, the value of all old inferior soulbound items diminishes if you own it?
I’m just trying to understand the scenario of the late game, as I have never been able to venture that far.
In EveOnline, ships blow up all of the time. There is a need for extraction of resources to sustain the complexity of Eve.
Does anything, apart from potions and food (who actually drinks potions?), get destroyed in GW2?
As far as I know, our supply of goods is ever increasing and none of it gets destroyed, so once everyone reaches lvl 80, what will Anet do? Increase the lvl cap? new items?
How much longer will we be able to produce things? What’s the point in crafting if nobody buys your stuff because they already have it?
“The customer service state, like all benevolent despotisms, suffers from illegitimacy.”
Edward Castronova
This quote pretty much sums up what I think of how Anet is handling the gem trade.
I agree with you than the price of gems is dependent on desirability, but would you not also say that the desirability is dependent on the marginal buying power of gems? Buying gems with gold becomes far too undesirable with the current transaction fees. I would argue that if the fees were minimal, yes speculation would occur, but because the price of gems is pegged to be 1.25USD/100gems, the price of gems/gold coins will maintain a certain distribution range. If it becomes too expensive, players will be more inclined to buy gems with dollars. I do not know the elasticity of demand with regards to gem/gold, but I am assuming that it is normal. Then again, I could be wrong.
On an unrelated note, I think it would be really interesting to see actual booms and busts with gem prices, but the algorithm seems to prevent this from happening.
no, but i believe that the price of these goods/services should be a constant set price in terms of both dollars and gold coins. adding gems into the equation seems to only create inefficiencies.
I’m with the same belief as scree.2061 in his earlier post on this page. Although, I would go as far to say that there should be a P2P exchange in-game for USD/gold coins using a form of paypal. Arenanet could impose a small tax on all transactions, but it is important that the market sets the price, and not an algorithm designed to control the rate at which the exchange changes
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the dollar/gem is what is controlled. 1.25USD/100gems. The revenues from people buying the services offered by the gem store should be based upon the number of sales of services, not gems. just get rid of gems. its pointless. if something costs 200 gems on the store, it will always cost $2.5o. There’s no cost to Anet of proving these services, so the price is only based upon demand. Therefore, there is no reason to change the price other than shifts in demand, any case, it is up to Anet on what price it is.
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The two markets are linked, though. If Anet were to double the price of buying gems with USD, more people would buy gems with gold coins instead, which would increase the price of gems. Having gems, to me, seems to be irrelevant in the entire system. Why not just have a USD/euro/Bpound value to all items purchasable by gems? In this way, Anet would not be generating currency through players buying gems for gold coins and the DWL associated with the enforced difference between buy/sell prices of gems would be avoided entirely.
I agree with Colonel Kernerl, market forces must determine the price or individuals will be extremely incentivized to go elsewhere to buy game currency. Using the in-game exchange, players are spending 400% more to obtain the same amount of currency than that of the second equilibrium price observed in black market exchanges. This is due not only to the algorithm being used to control prices fluctuations, but it is also due to the large size of the tax on the one-way exchange. According to research done by John McLaren (published in The Economic Journal) on optimal evadable taxation, individuals will weigh the potential legal costs of participating in the black market with respect to the size of the evaded tax. They will then reach an optimality condition based upon these results. If the tax is large enough, or in this case when one firm is granted a legal monopoly on trade, a second equilibrium price will arise. Because the barriers to entry are legal barriers, firms can be expected to bring the market back to full competition if the legal barriers are removed. In this case, the black market is very accessible, which makes me lean to believe that the enforcement cost taken by the developer is minimal.
I believe that the exchange should be a normal exchange of buyers and sellers where both buyers and sellers agree on a price that was mutually agreed upon. Not only this but the price of Gem/USD is currently forced to be constant. If anything, this will force the price of Gem/gold to be within a distribution range. If gems suddenly become too expensive in terms of gold to buy, players who are still buying will have larger incentives to pay USD for gems. This is also dependent on the rate of inflation and the real value of the Gold Coin.
I honestly believe that buyers and sellers should have a way of buying gold coins with USD at whatever the equilibrium price is, after a small tax is applied for developer revenues (much like government revenues). Those who would say that it is unfair to players who cannot afford to buy “game” money should realize that it is already unfair. In the case of micro-transactions, only players who can afford the in-game rate of exchange can buy currency legitimately. By allowing players to trade with each other, they will reach a price in which both buyers and sellers are satisfied, without the developer generating funds.