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Why The Economy is Borked

in Black Lion Trading Co

Posted by: Shannae.6192

Shannae.6192

Now, on to the ceiling. What this actually does, is accelerate the devaluation of money, and in this case, creates irritation as a result of the interface – something no sane game developer should ever deliberately introduce into their product.

The short explanation for the devaluation effect is this: because we are talking about a true post scarcity market, people do not have a consistent money sink such as their rent or property taxes, survival oriented purchases, et cetera. Therefore, yes, the value of commodities, goods people will want for whatever reason (especially the saving of time mentioned above) suffers inflation. But if you cap the value of goods artificially, you are setting the value of money in stone, but people will continue to gather ever increasing amounts of money. They can’t help it, so long as they continue to play the game at all.

Eventually, people have more money than they have things they want to spend it on. Money loses value compared to which items you already have, and the velocity of money takes a nose dive: which in laymans terms, means that people are trading less. And of course they are, consider the market they have to work with in this scenario. You get, Item X of Awesomeness, and have no use for it personally, so you go to list it on the Trading Post. It joins Y amount of Item X’s that have accumulated there, sitting at the max price. It has nothing to separate it from all of the others just like it, so they all just sit there until somebody wants one, and then that somebody has no reason to buy yours over any other one.

This is the point of irritation: In order to move my goods, I have to list them for less then the artificially determined price – just like I would in a free market, except that the price ceiling is determined by what people are willing to pay, and automatically as a result, increases to accommodate the growing amount of money available in the game. But let’s go back to our fictional, “communist market” for a moment and examine this further.

What do you think happens as time goes on? I already know: As people start to hit that moment when they have nothing else to buy, since everything is easy to acquire, they start putting forth less effort to sell in order to have money, because it has no value. It no longer saves them time, much less anything else. Money has no function any more. So, people slowly stop selling. Some people do continue, of course, providing goods for newer players, but eventually the majority of these fall by the wayside as well, for a simple reason.

They already have too much money. They can’t gain anything from continuing to participate in the market, and they aren’t losing money faster than they gain it. There is no longer a challenge or competition in the marketplace, so there is really no gameplay – no fun to be had.

Either my goods end up sitting just under the artificial cap, or they end up just over the vendor value, or more likely, I just start vendoring everything and a few people continue listing things way up at the artificial ceiling. We no longer have a market, at this point. We have an item shop, with mostly fixed values, from which everybody will buy the things they need in order to not be behind the gear ceiling, and then largely not participate in further.

So I ask you, CdrRogdan, how is this item shop an improvement over the market we currently have?

It certainly doesn’t look like fun, and I don’t know about you, but I prefer to do things in games based upon how fun they are. >.>;

Why The Economy is Borked

in Black Lion Trading Co

Posted by: Shannae.6192

Shannae.6192

I’ve read the whole thread over twice, and I’ll throw in my two cents. I’m not going to claim to be an economist, but I can claim that I got an A in Economics 101, which just might put this into perspective:

CdrRogan, you are wrong. Unlike Wazabi, I think you do understand what a ceiling and floor ARE, but I think you don’t understand what they DO. Although he did say English isn’t his first language, so that may be a nuance he isn’t getting across very well.

What you are proposing, CdrRogdan, amounts to the government take over of the market – what the layman might confuse for communism. And just like Soviet Russia, it can only end badly – just ask them. >.>

Now, if I am understanding you correctly, you perceive the problem to be that people have the ability to put in a buy order for less than the vendor value of an item, yes? I mean ultimately, since there is more too it (these get bought, then resold in some fashion, with a bunch of variables et al), but the whole thing you take issue with disappears if people stop jettisoning goods onto the trading post so cheaply, yes?

Here’s why this is a fallacy: if people were unable to list the items, at that price, they’d put them up there anyway. The simple fact of the matter is, every single person I know in game with a single exception (and I’m in a decent sized guild) uses the TP to drop items, so they don’t have to walk back to a vendor. The loss they are paying is worth it, to them, to not have to take that Time resource you’ve dismissed as a factor, in order to increase the value of their goods by pitiful amounts.

Time is in fact, the most important factor here. We’re talking about a true post-scarcity market, after all: anything can be had by anyone who is willing to put in the time. People are, as a rule, interested in saving themselves time, time being the one thing no mortal life form ever feels they have enough of (speaking generally of course). And people are willing to “spend” in order to save time. We have whole lines of products, entire categories of invention, dedicated to reducing the time it takes to perform our chosen activities.

And that includes video games.

So when somebody throws something out there for sale at an obscenely low price, the lost value is what they’re “paying” as the convenience charge to save themselves some time. The other players who buy these good are, therefore, providing a service, and they make their wage based on the profit margins of their individual purchases.