el economy

[furzwei]

eyy just wondering..

why you think there is no inflation in the game?

(i have been on and off for more than 2 years by now and prices really are stuck to their original amounts)

 

just collecting some ideas

[Darwin2M]

supply and demand - infinite supply of low level raw materials means there is no shortage and no reason to increase price.

 

You do see price of rare items (read EFE thread) going up as they are made more rare.

 

Supply and demand.

[furzwei]

but this is just unimaginable.. and endless supply would cause the prices to stay stable when noone tells us they should

this is amazing!

i totally agree with your supply demand thesis but this phenomenon needs way more analyzing!

[Enly]

It economics

 

And EL is a game after all, its economy will function very differently than any real life economy. Due to the fact that it lacks so many of the other influences real economies have.

Edited December 4, 2007 by Enly

[Ryokotsusei]

The fundamental economic question every nation must ask itself is "how do you allocate finite resources among infinite wants and needs?"

 

This is the essence on economy, and supply and demand. It doesn't apply to Eternal Lands, since the the resources are infinite.

[Stricken]

People need and want things at the same rate, we are generally the ones who make prices tbh.

 

Can't blame any 1 but ourselves, if all the manuers refused to sell anything for less then ingrediant cost the price on tit / steel / iron armor would rise drastically

 

but thats just me i guess

[Entropy]

The resources are NOT infinite. It takes time (and sometimes other resources) to gather resources.

One of the reason why the inflation is relatively small and the prices are relatively stable is that I constantly try to ballance things (very often I look in the logs to see how many items of some type enter the game, how many exit, and so on, and try to compensate).

 

I also create a lot of demand for the money, so they don't lose their value. The tailoring skill, for example, is a big money sink, and does not add any money to the game (it will just move the money around).

[Wizzy]

That and also, NPCs set a base buying price for many items, for instance flower shop.

[Ryokotsusei]

It may take time to gather them. But they ARE infinite.

You can make anything needed to harvest other resources from scratch. Time isn't a factor in quantity.

[Darwin2M]

What was meant is that there is no artificial limit (other than time) on the amount of resources that can be "harvested". So, as Ent pointed out... time (and he) is the governing factor. What this means is that no one values their time any more than they used to. There is always someone willing to value their time at the current rate and undercut anyone who values their time more.

 

That and the fact that this is not a free market economy and is carefully regulated by an external factor. As you will notice if you read the forums, Ent has done a lot to manage supply rate to achieve stock and inventory at a desired level for some of the items which are important and in strong demand in the game.

[furzwei]

wow ent!!

this is great that you actually pay attention to these important details!!!

explains me a lot...!!!

 

and i think that EL is a great economic model and its serves its purpose (cuz economic models usually cut out some real life factors). so i think it is worth it to pay close attention to the happenings..

 

is there actually some place where we (normal players) can track or sistematically could track the sales and amounts?

 

if so i will harvest 100s of kilos of stuff and trade them like in a stock market .. smallest price change.. sell out all of it!!

[Peeves]

I think the maturity of the players helps alot. Take a game that is made for kids *cough*run-escape*cough* and players will be extremely greedy and not realise how their greed will push up prices. With EL the majority of players aren't desperate to sell their items as high as possible.

 

In short, ELs community is awesome.

[SL7yz0r]

I think the maturity of the players helps alot. Take a game that is made for kids *cough*run-escape*cough* and players will be extremely greedy and not realise how their greed will push up prices. With EL the majority of players aren't desperate to sell their items as high as possible.

 

In short, ELs community is awesome.

Maturity does help but i don't think "greed" has anything to do with it. I think the proportion of greedy people to generous people is the same for both young and old. And just because you want to get the most GC possible for items doesn't make you greedy. If so, then i think every1 on earth could be considered greedy.

[PowerWarrior]

I think inflation in the game is high but since supply is currently high the price does not increase. Also suppliers have been limited to a certain price by npcs.

 

This is something the goverment in the real world does to look out for the consumer. However you must clearly look at the profit margins of these suppliers.

 

NPCs also do not buy enough supplys to keep the price higher. (Its done in europe where if a farmer cannot sell his produce the goverment will buy it. Often the goverment destroys this produce because there is too much grown. They cannot give it to LEDCs because it would interfere with there trading and put there farmers out of business)

 

However if NPCs did start to buy things from these suppliers then a vat system would need to be introduced within the game because inflation is a problem.

 

Why Is Supply High?

 

1. Barriers To Trade - Its quite easy to start a new skill and start selling the goods.

 

2. Mass Manufacturing - Many mass manufacture there goods which means that supplys flood onto the market. Mass manufacturing is not good if there is not enough demand for it.

 

3. Limited New Players - new players = new people to buy your goods. It takes them time to understand the game and make a bit of money to buy goods but there are not enough of them.

 

4. Low Demand

 

What Effects Demand -

 

1. Pking - Loss of srs/hes/rings/armors ect

2. Break Rates - Increase Demand

3. New Players

 

By increasing any of the above demand would increase.

 

I think all three changes would need to be made. Increase Demand, Decrease Supply, Less NPC Selling.

[Entropy]

I think inflation in the game is high but since supply is currently high the price does not increase. Also suppliers have been limited to a certain price by npcs.

 

Do you know what inflation means?

[PowerWarrior]

Ah i see what you mean.

 

Inflation is the increase in prices.

 

What i mean is that there is a increase in the amount of gc in the game which can lead to inflation but doesnt because supply is high.....

[Lesbegue]

Some of you said supply and demand dont apply in el since el is nothing like reality; but I would say you could describe it with supply and demand only with different constraints since supply and demand theory really dont accurately describe the real world anyway.

One factor as to why there are no inflation could also be boiled down to the price interval of HEs and possibly SRs since fighters are one of the contributer to the incoming gold coins for the game. It's not totally depended on the ingredients they uses as we all have seen what happened to the bronze armor/bar/etc.

I'm not saying no inflation is bad, I think it's good but my opinion makes no difference; only dont want to mislead anyone.

Ack i'm out of time so I'll leave the rest for you'll to talk about.

[furzwei]

but so what happens of there is excess supply?

prices will go down and eventually supply will change itself until it reaches equilibrium...

 

so warrior i dont think thats really correct what you said about supply..

 

and actually if you think of it this constant excess supply is the reason prices are kept constant or constantly low because they reached their minimum

 

who is going to sell a FE under 3 gc for example? and since all the raw material prices are set by npcs, by adding up the prices of the raw materials we get the price of the final products (such as iron sword.. FEs, iron bars, hammer cost (capital), steel bar, and food)..

all of the products reached a minimum price and they will not go up in my opinon as long as supply is kept high

and supply will be high of everything... so lets enjoy a world without inflation!!

 

dont misunderstand me..

 

i love this inflationless EL... 3 years ago i bought a FE and today i can sell it for the same 3 gc!!

 

i think this is great and that makes me wanna return to the game so often...

 

history doesnt decrease in its value!

Edited December 9, 2007 by furzwei

[Matty27]

(Its done in europe where if a farmer cannot sell his produce the goverment will buy it. Often the goverment destroys this produce because there is too much grown. They cannot give it to LEDCs because it would interfere with there trading and put there farmers out of business)

Err. You mean the Common Agricultural Policy there perhaps Powerwarrior? I suggest that the subject of subsidies to farmers is not quite as simple as stated in your post.

 

Of further interest on this and related subjects, I suggest the "see also" links at the bottom of the wikipedia page on the CAP.

 

Back to some questions/points raised in the thread:

 

When there is an excess of supply, desperate players will drop their price demands to actually get a sale, then most folks think this is the new standard price and so the price keeps dropping. Example of this is when I first started potioning seriously, SR were 18 gc each. Now there are players demanding to buy at only 13 each which is what the NPC pays, and I recently saw someone wanting to buy at 12. This has nothing to do with what the potioners want, and I don't think it is to do with excess supply. I see lots of people advertising to buy SR, they are just not willing to offer the potioner a better price to ensure the purchase. If you are desperate to buy something, why not just offer a little more than the other buyers are offering? I think you might actually get the thing you want that way

[furzwei]

but the thing is that you are desperate to buy it but the sellers are even more desperate to sell

whether they sell low or they dont sell at all... so of course they would choose sell low

never happened to you that you had something you wanted to sell for more than one day?

and after that any offer is good...

well that is the reason and that is a perfect example of excess supply.. all the sellers will not raise prices because there always will be an exception who will sell lower than the rest

that is called excess supply... that is why the inflation is low because supply was kept high at all times...

now imagine what would happen to the price of the rabbit furs if there would be no more rabbits in EL...

if every day only 100 HEs would enter the game... prices would soar to the sky.. but since it is bidding kind of market but it works the other way supply is standard and prices just lower and my money doesnt loose value which is great!

it is just amazing!

 

what you think?

Edited December 9, 2007 by furzwei

[Matty27]

You are correct though that EL has a problem of excess supply of finished goods. This goes again back to the desperate-to-sell player who will drive down the price just to get a sale.

This is the reason that lots of higher level players (and I do not count myself among them) in many skills will happily take your ingredients and a gc sum - to cover failures - for high level things, but will not keep them in stock as the value of finished items is lower than the ingredients.

 

I think you need to read this explanation of the word Inflation before you use it in that context again Furzwei.

[Entropy]

Well, the final product was the reason why I wanted to make the NMT breakable. But over 50% of the people didn't agree with it, so..

[masterpiter]

It has nothing to do with the nmt cape unbreakable/breakable or even ingame lol, it was like that long before some1 ever suspected the nmt will be ingame

 

Check items that r bought for show off or for no grief days only, like red dragon armor sets, they almost dont break coz ppl r afraid to use them even with nmt.

Same with the price of warlocks cape's that ppl buy for their nice yellow colour and not the stats, never saw any1 wearing warlocks cape in actual combat, doubt even 1 left the game coz of breaking

Bronze armor set is also one of such items, axe of freezing too, eagle wing and its special version too

 

The reason final product is worth same or less than ings is simply the experience that ppl get for mixing.

Npc buying finished products "solves" the problem, like with spirit restoration pots or like with true sight pots, but just change(lower) the prices of them and u will see ppl sell them at the ings price or even little below.

 

mp

[Marr]

fully ack to empi's post.

 

the reason fo all this "trouble" with the so called economy in this game is simple:

 

it's a freaking massively multiplayer online role playing game not a high end economy simulation system for students - so every attempt to realy fix it is hopeless. ;p

[vytukas]

There are some things that sound weird in EL NPC price system.

 

Typical example:

titanium bar = 8 titanium ore+ 7 FE

 

If some1 sells ingreds to NPC he/she gets 8*2.5+ 7*3 = 41 gc.

If some1 makes titanium bar, he/she gets 40gc for it at NPC.

 

And I even wasnt mentioning 3 coal needed, possible fails, food needed...

 

In short, you are losing money because you are making product