Fixing some of the economy

[Mr.Mind]

How does increasing the money supply raise prices? The main driving factors of the costs of goods is competition ftom supplies, the player demand, and the cost needed to make them. An increased supply of money doesn't necessarily mean the price of things will go up.

The more money someone has, the less they care about how much they pay, and the more willing they are to accept a higher price.

[Kalach]

How does increasing the money supply raise prices? The main driving factors of the costs of goods is competition ftom supplies, the player demand, and the cost needed to make them. An increased supply of money doesn't necessarily mean the price of things will go up.

The more money someone has, the less they care about how much they pay, and the more willing they are to accept a higher price.

 

This kind of artificial inflation is useless though. It doesn't give more useful trading ability to anyone, it just makes all the numbers on the display higher.

 

The point to get to is for everyone to have sufficient money for what they need. Throwing money globaly across the board is useless, because everyone is still in the same place there were.

 

Directed increase of the supply of money can be useful, however, without causing undue inflation.

 

An hypothetical example: fighters aren't buying magic essenses because they needed to spend all their money on health essenses, even though they really want magic essences. Additional supply of money to fighters will give them the means to purchase ME's as well as HE's. There will be a small amount of inflation to HE's, because the players don't care *as much* about their price to HEs, but since there was a competing resource for the GC to go to, you'll get a little bit of economic growth.

[ttlanhil]

The more money someone has, the less they care about how much they pay, and the more willing they are to accept a higher price.

not just that... but it's not just that items/services have a monetary value... money has a value as well, and it can change (just watch the exchange rates, $ vs gold, etc for real life proof)

the more money you have to spend, the less value there is in it (there's only so much you want to buy). and, of course, costs of items will go up after that as people want more money

This kind of artificial inflation is useless though. It doesn't give more useful trading ability to anyone, it just makes all the numbers on the display higher.

except... the change in prices will lag behind the value change of money. it's not just a size of the number change.

plus NPC costs don't fluctuate with in/de-flation, so there's another effect

Edited June 29, 2006 by ttlanhil

[Learner]

How does increasing the money supply raise prices? The main driving factors of the costs of goods is competition ftom supplies, the player demand, and the cost needed to make them. An increased supply of money doesn't necessarily mean the price of things will go up.

The more money someone has, the less they care about how much they pay, and the more willing they are to accept a higher price.

No, I haven't found that to be the case at all.

[Placid]

How does increasing the money supply raise prices? The main driving factors of the costs of goods is competition ftom supplies, the player demand, and the cost needed to make them. An increased supply of money doesn't necessarily mean the price of things will go up.

The more money someone has, the less they care about how much they pay, and the more willing they are to accept a higher price.

That's an assumption! I don't think that is true for everyone. In fact a lot of those with more money tend to dislike paying too much for things (think 'skinflint' or 'tightarse').

Also, doesn't this just decrease the value of GC in the market?

[ttlanhil]

That's an assumption! I don't think that is true for everyone. In fact a lot of those with more money tend to dislike paying too much for things (think 'skinflint' or 'tightarse').

Also, doesn't this just decrease the value of GC in the market?

yes, and this is why it's true (that people will pay more). people with twice as much money that's worth half as much aren't really any richer (or skinflintier)

if it was a purely player economy, then apart from the lag/catch-up time, there'd be little change in the end, prices will auto-adjust. but while people have to pay cash to NPCs, there is an effect (if you have twice as much money, you could get more FPs, since you got more of them per gc, the cost-fragment of finished items because of the food can be slightly lower. for a more extreme example, book and magic weapon prices from NPCs)

[Mr.Mind]

That's an assumption! I don't think that is true for everyone. In fact a lot of those with more money tend to dislike paying too much for things (think 'skinflint' or 'tightarse').

Also, doesn't this just decrease the value of GC in the market?

I'll admit, it isn't true for everyone. But if money is easier to get, most people will find it easier to spend.

 

The value of GC increasing (able to buy more per gc) has been what everyone in EL complains about...

[Placid]

yes, and this is why it's true (that people will pay more). people with twice as much money that's worth half as much aren't really any richer (or skinflintier)

You're not making much sense. Why is what true? Are you saying that this will have a positive affect because people who are tight are going to care less about what they're paying for something? o,0

[ttlanhil]

You're not making much sense. Why is what true?

it decreases the value of GC(what you said in the bit I quoted), which means people will pay more GC for a given item(what I said directly after to clarify)

[Mireille]

How does increasing the money supply raise prices?

 

Easily.

 

Prices for everything are created in result of supply and demand interplay. The more money is on the market the less valuable it is.

 

Imagine: a government prints money. Money is payed to workers. They ger more money. The shopkeepers realise that workers have more money, so they raise prices, because workers have now more money to spend.

 

That is a gross simplification, but that's how it works. You can read economics handbooks for more detailed information.

 

In real world, nothing would change: more money -> higher wages -> higher pricess -> as a result, everyone can buy the same amount of some good, because they might earn more, but prices rise as well. In EL, however, we have some fixed prices - for example, on wine, sanding paper, leather and stuff. If people get more money in their pockets, those materials will simply get cheaper.

Edited June 30, 2006 by Mireille

[trollson]

A few observations (probably repeats after 12 pages...)

These are discussion points rather than solutions (well, mostly, I'll try to resist...)

 

Implicit value in a gold coin?

The implicit value in a gold coin

(gc)

is derived from the amount of effort required to obtain it. This will vary between characters and players.

Is this a gold based economy at all?

What drives the economy; the movement of gc's, or the acquisition of experience points

(xp)

?

 

This is where the

supply-and-demand

model breaks down for the RPG economy; goods are not manufactured for gc profit, but for the xp gain. Cost-to-creates (gc) must include a reduction for the xp value of the task.

 

What is the value of an xp in terms of gc?

NPCs provide price caps

NPCs prices enforce minimum and maximum market prices. They are not part of the economy, but entry/exit points from it.

 

There are at least two exceptions to the minimum prices though:

1. The effort of transporting bulk commodities for sale to an NPC reduces their market value.
   
   
2. Intermediate items in a production-line system are not bound by minimum price, but on
   pure
   cost-to-produce (in which harvestables are effectively free); they are never exposed to market valuation.
   
   

One criteria must then be that characters should be able to create items for costs which fall between the NPC buy/sell prices.

Can we ever have a supply-and-demand economy?

This would require a major re-working of the game mechanics and background world model.

• Item creation would have to be seperated from xp gain. Either xp or gc, you can't have both.
  
  
• What role would the NPC price caps serve in a supply-and-demand economy?
  
  

[Kalach]

Is this a gold based economy at all?

What drives the economy; the movement of gc's, or the acquisition of experience points

(xp)

?

 

This is where the

supply-and-demand

model breaks down for the RPG economy; goods are not manufactured for gc profit, but for the xp gain. Cost-to-creates (gc) must include a reduction for the xp value of the task.

 

I would disagree. It's an entertainment value driven economy with a currency of time. XP gain is a goal for which time is spent. Items are a goal for which time is spent. Game knowledge (for explorers) is a goal for which time is spent. Time can be directly converted to XP on a limited basis (harvesting, naked fighting). More often, there are intermediate steps of converting time to GC and GC to items and then time plus items =XP. The same can be said for items and game knowledge, and as skill levels are often a factor, XP gets added back in. But it's all reduced to time.

 

Because of this model, we have a river style economy. Infinite source to infinite sink. The trik

is to get in-game representations of time (GC/items) to touch as *many* hands as possible before going into the sink.

 

Ideally, as Trollson suggests, we would be able to split goals such that any time investment achieves only a single goal (XP,items,game knowledge). This is the school idea where you spend time in a school training to achieve XP gain, and then use those skills elsewhere to achieve item gain or game knowledge gain.

 

However, because XP gain is often dependent on item gain and item gain is often dependent on XP gain this could be a very frustrating style of game. (Okay, I've got my latest level, now I have to go make and sell things so I can go back and get my next XP level.) In any event, that's not the current system basis, so it's a moot point.

 

We are working in a "balanced" system. Which means that any given time investment should help you both in terms of items, XP, and game knowledge to meet your next goal. To do that, XP has to be balanced with item gain. (I know, I'm not saying anything shocking here.) The gotcha for this is that xp should be balanced with item gain by letting resources touch as many hands as possible before hitting the sink. Looking at the case of leather armor, for instance that gives us two paths to go down:

 

#1 Balance things so that the experience gain coincides with sufficient item gain (sellable leathers) to sell meeting the demands of direct users. (more or less 1 hop to sink)

 

#2 Balance things so that the experience gain coincides with sufficient item gain (sellable leathers) to sell meeting the demands of direct and indirect users (sometimes one hop and sometimes two hops). This is the direction the new leather armor seems to be going, which is IMHO a good thing. New users create leathers and sell to slightly more experienced users who create augmented leathers, who sell to people who want augmented leathers.

 

Side Note: If an item does not go into sink after it has become unusable to the person who owns it, it becomes a problem. For instance, it is often easy to get free leather from a guildie who has little use for it. Breakage rates can help this.

 

Further Side Note: Monster drops can cause a lot of trouble in this. It's very easy to have a monster drop a complete, really cool item... which gets sold to one person and then heads to sink. It would be better for monsters to drop GC or component items that can be sold to indirect users.

 

 

Of course balancing becomes terribly difficult when you realize that different people have different goals they are trying to attain at any given time.

 

 

Well... There's my thoughts, anyway.

[Ornitorrinco]

Yea, with more money, people are less stingy, they're willing to pay a little more for items. But putting more money ingame is difficult, this has made MU Online economy a big mess. They trade items that are over the maximum individual money amount for each player... something around billions of money units. So they have an item (jewel bless or something like this) which is worth millions, and they use it for trades instead of using it for its real purpose (it can be used to enhance armour and weapons, or smth like that).

[Mireille]

Yea, with more money, people are less stingy, they're willing to pay a little more for items. But putting more money ingame is difficult, this has made MU Online economy a big mess. They trade items that are over the maximum individual money amount for each player... something around billions of money units. So they have an item (jewel bless or something like this) which is worth millions, and they use it for trades instead of using it for its real purpose (it can be used to enhance armour and weapons, or smth like that).

 

The biggest difference between Mu and EL is that in Mu you have no general trading channel, where prices are very easily compared (like our #jc 3). I wanted to buy an object in Mu and met many turds who were selling this objects for millions or billions of coins, but eventually found someone who sold it at a reasonable price. That wouldn't be possible in EL - if one person says "Selling iron sword, 3 million gc" and another "Selling iron sword, 100 gc", it's the latter who will get the deal. That's how free market and competition work.

Edited June 30, 2006 by Mireille

[Tuver]

I tried to read through all 12 pages and I think some people have the right idea and others are just spinning their wheels. As many people pointed out already we first must find the problem before we can come up with a solution. We can talk about solution all we wanted, but unless we nail the real issue we may cause bigger problems. so lets lay out what we DO know and then what we think

 

Market is flooded with items from mass production to level in skill ( raise hand in guilty, yes I mass produce for xp, but I stay within items bought by NPC so I can buy more resourse to make more to level, the cycle)

Many items are worthless, not because the market is flooded with them, no they are just worthless.

No floor price means any could drop the price to want ever they want as Mr Mind has proven time and time again, before in post and practice, is he wrong, no bucause if it's not him it will be someone else.

Market flooded with dropped items

 

these are problems we all talk about and many have posted solutions to them, but remember we need to talk baby steps, sure it's easy to b*^%h at Ent to get the special area done, but that's a lot of coding work to do and remember he has a life outside of EL. So baby steps. first step should be the easiest to take, although it may not do the trick, but remember one step at a time. Ent wants a list of all the ideas and what they should cost. NOT what ingredients they should be made with, not how long it should take, simple how much should everything cost. After we compose the list of how much everything should cost, then we can talk about, changing ingredients, special areas, multi-step mnufacting, changing the xp on items.