Curse

Aeon221 · Feb 17, 2009, 04:41 PM // 16:41

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Originally Posted by Coney

Hmm, this analysis looks flawed to me (It also ignores the free 10-30 zkeys/month/account profit generated from nil). Remember, money in our real world is really a contractual obligation, or indentured servitude, of 1 servant to another master - thus requiring a 2-way exchange (barter system taken to the next promissory note step).

Not everyone bothers with the monthlies. And, uh, the rest of what you're saying here is gibberish.

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The money supply in GW is infinitely unbounded and quadratically growing, and requires no debtor - just farm 1 hour and profit 15k. There is no "ecto standard" prerequisite that limits the money supply - as plat can be produced regardless of whether ecto even exist (read: printing press). Nor, is there any plat required to provide/generate revenue (cogs), thus producing eventual profit (a requirement in real-world economic systems - read: GDP/multiplier)... Finally, real-world gold is a limited natural resource; however, ecto can continue to be purchased (or farmed) as long as 5.5k exists to do so. Sure, there are some money sinks, but they are few and far between in use. And, as an economist, you should be well aware of the hyperinflation seen in Germany during the depression, where wheelbarrows full of cash were more valuable as kindling (the situation that should exist in GW, if goods and services were *REQUIRED*)...

The money supply is neither infinitely growing nor growing at a quadratic rate. Its growth is bounded by time constraints, players leaving the game (and taking their money with them), and expenditures on non-player transactions for stuff like armor (!), consumables, and, to a lesser extent, trader items like mats and runes (I personally get whatever armor mods I need from traders as it is a convenience worth the premium, and I know I'm not alone, but also not in the majority).

More evidence that you're wrong about the money supply in Guild Wars? Rather basic logic -- if the money supply were expanding, and not contracting, prices would be increasing, and not decreasing. That's pretty much definitional based on the mathematical definition of inflation.

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FWIW, poor players aren't rewarded by the rich in GW - they're rewarded by farming (15k/hour or 10-30 zkeys/account/month). No exchange WHATSOEVER is required between the rich and poor in this game (or between anyone for that matter).

Most of the farms that people engage in are intended to grab a high value item or set of items (ectos, rare weapons, tormented gems) of interest to other, wealthier players. Chest runs are based on a similar concept.

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If you ask me, the low prices are simply a product of a total lack of demand... Really, most don't play this game to buy junk in Spamadin - they play to accomplish some quest or task, and find stuff on their own. Those that do are mostly collectors of the fringes... A lot do save junk, believing it's worthwhile, hoping to sell it to someone, eventually becoming ever more desperate to sell it at any price (never fully realizing that THEY don't even want the crap)... This desperation is fueled as well by the limit on inventory space...

Umm, the lack of inventory space should actually be a driver of trade -- players have a finite amount of space, and must either sell to other players or the merchant if they wish to replace a held and unvalued item for a valued item.

Furthermore, the absolute value of the number of traders has little bearing on the prices charged. They should reflect, as I said above, the availability of currency. The more money there is in a given economic system, and the faster the money supply grows, the higher prices get. This is fundamental.

Aeon221 · Feb 17, 2009, 04:48 PM // 16:48

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Originally Posted by Sir Skullcrasher

I think the economy is fine, as long as peoples are buying and selling things. Also peoples have to play the game like it's just a game. Don't go on GW thinking it's the stock market and that you have to trade/sell things to make higher profits.

It has nothing to do with profit and everything to do with convenience. If the market system breaks down, it becomes much harder for any individual player to find the items, mods, etc that they want.

Therefore, it is in the interest of every player to have a functioning and efficient market place.

Skye Marin · Feb 17, 2009, 06:39 PM // 18:39

Items costing less gold is good. That means the value of gold is high.

When the value of gold is low, and it costs over 50k for a +30 mod, that is bad.

The most effective way to gain money is to sell to other players. Usually, this is tied to titles. This is good. It keeps money flowing in the system, without creating new money.

If you want items to be worth more, you are in the minority. If you want to earn more cash, buy a handful of accounts, make your monthly predictions, and sell your Zaishen Keys.

Quote:

Originally Posted by Aeon221

It has nothing to do with profit and everything to do with convenience. If the market system breaks down, it becomes much harder for any individual player to find the items, mods, etc that they want.

Therefore, it is in the interest of every player to have a functioning and efficient market place.

Agreed. For example, right now you can easily buy a +30 staff head for less than 3k. Offer 5k and you'll have a chain of people selling you them right now. That is very good.

If you want to increase the values of greens more, have a trader who will trade them for tokens (which can be exchanged for other good stuff, like consumables), weighted by how many have been traded in a certain time frame. I think it would take too much time to implement though.

pingu666 · Feb 17, 2009, 09:13 PM // 21:13

im notsure the depression in prices is a bad thing, makes stuff avalible to more players which is good, quest/mission rewards are now somewhat better relativly due to price decrease.

sure the gw economy is semi broken, but so are all economies to various extents

Aeon221 · Feb 18, 2009, 05:58 AM // 05:58

Quote:

Originally Posted by pingu666

im notsure the depression in prices is a bad thing, makes stuff avalible to more players which is good, quest/mission rewards are now somewhat better relativly due to price decrease.

sure the gw economy is semi broken, but so are all economies to various extents

As prices decline, fewer transactions occur. Like I said upthread, this decline in prices initially seems like a good thing, but it will eventually result in a total breakdown in trade. We'll eventually get to the point where buyers will be offering about what the merchant does for most items. (edit: This has already happened with most of the greens and rare skins from Prophecies, so it isn't exactly coming out of nowhere.)

At which point, trade will cease, and you'll be unable to get mods or cool skins or anything at all of interest from other players.

Increasing the price of ecto at the traders by a couple of hundred g every month would be the best possible method of preventing that sort of doomsday scenario (in lieu of a bond market, obviously, but we're working with what we have!).

If you figure ecto are going to be worth 1.2 to 2.4k more a year from now, you'll obviously have an incentive to invest in them, meaning you either farm more ecto or farm more other stuff to trade for ecto -- or even just trade more of the mods on the stuff you pick up while playing the game normally, rather than merching them.

Just as obviously, you won't want to keep all those ecto -- after all, you gotta get those stylish weapons and that sexy armor, right? And you're also earning money on those ecto, so you need relatively less ecto (or cash, since it's easily convertible) for you to reach the level of liquid wealth that you feel is sufficient. So you'll trade a few off for cash to get materials for your armor, and maybe a few more for some nicer looking weapons. And all the while, you're increasing the total amount of trade.

But hey, maybe you're not a big money man -- heck, I'm not, I've got maybe half a mil in liquid and maybe a mil including all the armor and runes and minis and weaps I've got on all my chars and heroes, which about adds up to the price of one set of FoW. Maybe you mostly trade in plat and sell weapon mods and such. A regular increase in the price of ecto will expand your customer base -- either directly, as you'll have more ecto holding individuals to sell to, or indirectly, as those ecto holders make more purchases from other players, which allow those other players to make purchases from you. Either way, you'll profit.

I know it sounds crazy that rising prices benefits the little guy the most, but it's one hundred percent true. That's why so many of the big names in economics and fiscal policy are utterly terrified of deflation setting in in America -- it'd rape the earnings of the entire country.

Still, this is easy to fix. All Anet has to do is gradually raise the price of ecto at the trader.

Lishy · Feb 18, 2009, 06:30 AM // 06:30

I still think this thread is ridiculous.

Seriously. What depression? Guild Wars is a GAME! There's infinite amount of items.

Iarumas Regnar · Feb 18, 2009, 06:39 AM // 06:39

The economy is a result of the game content. People could argue it's taking a turn for the worse, or is doing good. But the game on the other hand, is not in the best of situations.

It's this simple:

There hasn't been any significant new content added to the game in a long time now. People are looking for a reason to keep playing GW even though there isn't much incentive. GW has already answered this problem, by creating GW2. The only problem is they misjudged how long it was going to take them to develop it. That and by putting all of their efforts into GW2, it has become hard to keep a healthy GW environment going.

To be honest, Anet doesn't really need you to play GW in order to produce and come out with GW2. There's not monthly fee, and they already have the cash in hand to produce their game. The GW2 crowd is going to consist of original GW players, but primarily new gamers, especially younger ones who weren't old enough to experience the GW/WoW boom. They can count on many returning for GW2, but they're going for those that haven't experienced GW yet. Everyone just need to be patient and let Anet's plan unfold. They know what is going on much better than we do, they just haven't fed our hungry mouths because they know we aren't starving....yet.

cataphract · Feb 18, 2009, 08:12 AM // 08:12

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Originally Posted by Kain Fz

I still think this thread is ridiculous.

Agreed.

Some people have mistaken GW for an economy simulator. But I guess it's nice to feel rich (even if it is only a game) at times when IRL billion dollar bailouts aren't doing anything to help and people losing jobs. It's all psychological, IMO.

Shasgaliel · Feb 18, 2009, 08:25 AM // 08:25

Quote:

Originally Posted by Aeon221

It has nothing to do with profit and everything to do with convenience. If the market system breaks down, it becomes much harder for any individual player to find the items, mods, etc that they want.

Therefore, it is in the interest of every player to have a functioning and efficient market place.

Standard market rules do not apply here. Supply is driven by the items which are the most expensive and those are farmed (produced). Not really by demand. It is like the supply was based mostly on luxury items. All the rest are random drops people are trying to monetize. So we do not have a real supply here but a supply based solely on the rarity of the given item and its drop rate and player wishing to waste his time trying to sell it. Try to find a decent slayer mod on sale or some of the greens. People perceive them as cheap and even do not bother selling them.

Money supply is unlimited in GW so I am not sure but in my opinion ISLM model breaks. If you think it is not unlimited say hello to bots, dupers and gold sellers....

Coney · Feb 18, 2009, 09:37 PM // 21:37

Quote:

Originally Posted by Aeon221

Not everyone bothers with the monthlies. And, uh, the rest of what you're saying here is gibberish.

Nice, rather than give details as to why each of my points is wrong, just go straight for the ad hominem. I really didn't figure I'd get much more from the self-described eco-expert.

You want to go point by point, I'm game. In fact, my analysis of your post lead me to discover the real reason (actually a couple) why there isn't hyperinflation in GW. You want to keep on with the attitude w/o reasoning, then forget it.

For a gentle starter, linear growth is quadratic. Just because I've left GW for a month or two doesn't mean I've "left the market". Consumables require NPC fixed cost farmed mats. Just because a small population of GW elite players do chest farms, doesn't mean that's the most common farm - I'd argue it's the normal H/H 8-man quester, or solo raptor/HM/etc for golds/purples/blues/whites/plat/salvage (some UWecto and gemstone too). The farms you refer to are for fixed-price items (ecto 4.5k, unid golds 700g, gemstones 1/3/5k) - these are NOT the items that are seen with price deflation/depression. In fact, they SHOULD deflate as more are in the economy, assuming rate of farming them is higher than rate of growth of pure plat... You're making assumptions about the GW economy (e.g. that money supply is limited by a "scarce valuable resource" standard, that player-player trade is necessary and a large contributor to GW-GDP) and applying real-world methods to interpret (your inflation commentary - irrelevant if most of GW-GDP is NPC farmed and NPC purchased, and thus NPC price-fixed).

I gave a legitimate reason why item prices are deflated, and you TOTALLY neglected to respond to whether it is right or wrong (other than to say the same old about inflation given the fundamentals, based on incomplete assumptions). I think it pretty much boils down to 3 different but limiting costs:
1. Opportunity cost of auctioning items in Spamadin (200-300g/minute)
2. Value of an inventory slot occupied by an item (say >5k). What this does is box in sellers. There's no reason to really bother trying to sell items in spamadin unless they're worth more than 3-5k. And I'm not talking about FIXED COST items with prices set by NPC vendors.
3. Artificially limited demand (or total lack of it at time delta-T). There is no auction house, so the only buyers are those who happen to be logged in, and who happen to be in Spamadin, and who happen to be reading the spam. Sure some trade on the guru auction site, but too small really to be a significant overall contributor.

On the flipside, let's say ectos all of a sudden inflate to 7k. I hardly think this is going to increase the prices of sought after golds or greens in the sub-10k range. Certainly not to the extent that decent golds/greens should be pulling 3-5k+, but are barely fetching 1-1.5k after trying to sell them for an hour...

Aeon221 · Feb 18, 2009, 10:41 PM // 22:41

Quote:

Originally Posted by Coney

Nice, rather than give details as to why each of my points is wrong, just go straight for the ad hominem. I really didn't figure I'd get much more from the self-described eco-expert.

No, this right here is literally gibberish.

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Remember, money in our real world is really a contractual obligation, or indentured servitude, of 1 servant to another master - thus requiring a 2-way exchange (barter system taken to the next promissory note step).

Completely nonsense. You want to translate it into English, go ahead, I think I've proven that I'm willing to play.

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You want to go point by point, I'm game. In fact, my analysis of your post lead me to discover the real reason (actually a couple) why there isn't hyperinflation in GW. You want to keep on with the attitude w/o reasoning, then forget it.

Attitude? Choke on it. Most of the garbage I ignored in your post was A) Incorrect understanding of economics, B) Incorrect understanding of Guild Wars, or C) Just Plain Stupid, like this next quote.

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For a gentle starter, linear growth is quadratic.

Wrong, by definition. Linear means equations of type y= ax + b, which creates a line and quadratic means, by definition, equations of type y = ax^2 + bx + c, which results, quite obviously, in a curve.

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Just because I've left GW for a month or two doesn't mean I've "left the market". Consumables require NPC fixed cost farmed mats. Just because a small population of GW elite players do chest farms, doesn't mean that's the most common farm - I'd argue it's the normal H/H 8-man quester, or solo raptor/HM/etc for golds/purples/blues/whites/plat/salvage (some UWecto and gemstone too). The farms you refer to are for fixed-price items (ecto 4.5k, unid golds 700g, gemstones 1/3/5k) - these are NOT the items that are seen with price deflation/depression.

Or how about you read what I actually wrote!

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Originally Posted by Me

Most of the farms that people engage in are intended to grab a high value item or set of items (ectos, rare weapons, tormented gems) of interest to other, wealthier players. Chest runs are based on a similar concept.

Declaring, ex nihilo, that only a small number of players farm those items is simply ludicrous. Go look at trade chat, or visit any of the outposts that gate these farms -- you'll note that they're the only PvE outposts, outside of trade hubs, with multiple districts. Verifiable. Proof. That these are the common farms and, more importantly, the source of much of the IG wealth.

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In fact, they SHOULD deflate as more are in the economy, assuming rate of farming them is higher than rate of growth of pure plat... You're making assumptions about the GW economy (e.g. that money supply is limited by a "scarce valuable resource" standard, that player-player trade is necessary and a large contributor to GW-GDP) and applying real-world methods to interpret (your inflation commentary - irrelevant if most of GW-GDP is NPC farmed and NPC purchased, and thus NPC price-fixed).

Could you please for the love of God quit with the run on sentences? There is one full stop in this quote, which makes it nigh on impossible to parse whatever crazed thoughts are running through your obviously muddled head.

Moving on to the lunacy element, you've once again assumed that wealth never leaves the game. Anet, the universe, and the players have indeed created all sorts of mechanisms for the destruction of wealth. First off, as I've said before, armor (in particular) and consumables (over time, as they are regularly purchased and not one time deals like armor) are costly expenditures that wholly exhaust all the resources spent in their acquisition -- money spent on armor is money that cannot be unspent. Secondly, players leave the game, and take with them their assets. Thirdly, players have a limited amount of time with which to play the game and generate wealth. The combination of these three elements ensure that wealth is not infinite. Durr.

I've been playing for three, coming on four years now. My wealth levels have, after an initial period of rapid growth, remained relatively stable for several years now. The same is true of just about every player I know. If wealth were indeed infinitely created, as you seem to think, players like myself would have now earned nauseatingly large sums of money just by playing the game. Most of us haven't, which should have obvious implications for your theory of infinite wealth generation.

Finally, of course player-player trade is both necessary and a major generator of wealth. Where else do you intend to pick up rare skins and weapon mods? Farming ad nauseum until you get lucky and they drop? Durr, have fun with that. And why do you think the richest players in the game are all power traders, and not farmers? Magic?

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I gave a legitimate reason why item prices are deflated, and you TOTALLY neglected to respond to whether it is right or wrong (other than to say the same old about inflation given the fundamentals, based on incomplete assumptions).

No, you handwaved away economic theory and then coughed up an utterly ridiculous response. You still haven't managed to explain why prices are falling if the money supply is increasing at an infinite rate (lol!), by the way.

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I think it pretty much boils down to 3 different but limiting costs:
1. Opportunity cost of auctioning items in Spamadin (200-300g/minute)
2. Value of an inventory slot occupied by an item (say >5k). What this does is box in sellers. There's no reason to really bother trying to sell items in spamadin unless they're worth more than 3-5k. And I'm not talking about FIXED COST items with prices set by NPC vendors.
3. Artificially limited demand (or total lack of it at time delta-T). There is no auction house, so the only buyers are those who happen to be logged in, and who happen to be in Spamadin, and who happen to be reading the spam. Sure some trade on the guru auction site, but too small really to be a significant overall contributor.

lol at yet another display of mathematical ignorance by you. If basic terms are giving you this much trouble, perhaps you should reconsider arguing about economics with someone who has a degree in the field.

Next, most of the stuff you bring up I either already covered -- for instance, trade will cease if prices deflate below some level. I consider it merchant level, you consider it 5k -- despite the existence of player-player tome trade at prices of 1k. Furthermore, demand isn't "artificially" limited by the presence of time, ffs. Everything in the universe is limited by time, so if your theory of the Guild Wars Economic Failure includes time as one of the elements screwing it all up, you've effing failed. On an epic level.

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On the flipside, let's say ectos all of a sudden inflate to 7k. I hardly think this is going to increase the prices of sought after golds or greens in the sub-10k range. Certainly not to the extent that decent golds/greens should be pulling 3-5k+, but are barely fetching 1-1.5k after trying to sell them for an hour...

Increasing the price of ecto to 7k without a guarantee that it will continue rising will result in a mass sell out, driving the price immediately back to its previous equilibrium point. So, no, obviously it won't do anything. Duh. That's why my recommendation was for a gradual increase of a couple hundred g every month and a guarantee that the price will not fall below the level Anet sets. Whatever your ignorance addled mind believes, I've already demonstrated quite clearly what happens when the price of a currency substitute increases in value over time.

Quote:

Originally Posted by Shasgaliel

Standard market rules do not apply here. Supply is driven by the items which are the most expensive and those are farmed (produced). Not really by demand. It is like the supply was based mostly on luxury items. All the rest are random drops people are trying to monetize. So we do not have a real supply here but a supply based solely on the rarity of the given item and its drop rate and player wishing to waste his time trying to sell it. Try to find a decent slayer mod on sale or some of the greens. People perceive them as cheap and even do not bother selling them.

I think you're looking at this the wrong way, since your first couple of sentences indicate quite clearly that you believe not that supply/demand no longer functions (after all, farmers are farming the most expensive items, and the price is determined by the intersection of supply and demand; remember the Ogre Slaying Knife?) , but that the goods are transitioning from luxuries to normal goods. I find even that hard to believe, as the vast majority of players are not decked out with the latest fad even at this late date. Since there isn't a glut of these goods, something else must be at work here.

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Money supply is unlimited in GW so I am not sure but in my opinion ISLM model breaks. If you think it is not unlimited say hello to bots, dupers and gold sellers....

If bots, dupers, and RMTs were able to create an infinite growth in MS, we should be seeing retarded high prices for everything a la Runescape. Instead, prices have fallen regularly, which, based on what both the EoE and the ISLM model predict, indicate a fall in the money supply. Both also indicate that increasing the money supply should increase GW GDP.

Earth · Feb 18, 2009, 10:58 PM // 22:58

Stop with the flaming, please. Thanks.

Coney · Feb 19, 2009, 02:57 AM // 02:57

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Originally Posted by Aeon221

Wrong, by definition. Linear means equations of type y= ax + b, which creates a line and quadratic means, by definition, equations of type y = ax^2 + bx + c, which results, quite obviously, in a curve. Moron.

Why am I not shocked by yet more ad hominem.

Quadratic growth is y=x^a, where a>=1.

Let me just shoot your whole hypothesis dead with the following, seeing as how you've been playing for 3 years. For the past year I've been playing seriously, the ecto has done the following WRT value:

1 year ago - ecto = 3.5-3.8 plat.
9 months ago - ecto = 3.8-4.2 plat
8 months ago - ecto - 4.0-4.5 plat
6 months ago - ecto - 4.3-4.8 plat
past 3 months - ecto - 4.8-5.5 plat.

Ecto has inflated over the past year == you loose. PERIOD.

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Originally Posted by Aeon221

... the rest of what you're saying here is gibberish.

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Sure, there are some money sinks, but they are few and far between in use.

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Originally Posted by Aeon221

... and expenditures on non-player transactions for stuff like armor (!), consumables, and, to a lesser extent, trader items like mats and runes ...

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Originally Posted by Aeon221

Moving on to the lunacy element, you've once again assumed that wealth never leaves the game.

Uh, I'm sorry, who's been reading what? Why do you TWICE repeat what I've said, without acknowledging I said it first? The money sinks are negligible. It takes less than 1 hour to farm armor - throwing money at elites and consumables barely accounts for a few hours farming.

Inde · Feb 19, 2009, 06:52 AM // 06:52

Yes yes, you are all smart. Now stop it. Keep it related to Guild Wars.

Coney · Feb 19, 2009, 07:17 AM // 07:17

OK just assume I said it was linear growth, and forget the quadratic stuff...