Manipulate the economy.Follow

I'm sorry this' gonna be a long post:

For argument sakes, lets say that hairpins that exist in the game a year and a half ago are at 300k each.

A year and a half ago, gathering 300k together take a player how long? when crystals cost 900 a stack, elm logs at 3k and ores at 5k? HOw many NMs can you take that drop you lucrative drops? Even Ochiudo Kote mob proves a challenge. The quick money are camping the obvious NMs (lizzy, VE, Torrent etc.) and the long way is to farm your *** off.

A year and a half ago, the amount of players that was able to buy the hairpin, therefore wasn't many. Ok the Demand factor here is purely economic. Not alot of people can afford items. NOt alot of money exist in circulation. Therefore, 300k then is comparable to 1.2 mil right now. To simplify lets just say the amount of work an average player take to earn 300k 1.5 years ago is equal to the amounth it take teh same player (now several levels higher) to earn 1.2 mil now. Demands are low back then, supplies therefore, are also low. The main reason for the low supply is: Alot of people are busy leveling their first job and/or not of the level to camp the mob.

Sufficed to say then that a majority of players skip through their first jobs without ever probably equipping it at the right level. Meaning, an average first time ninja will not be able to afford a hairpin 1 year ago at level 24 (when he can use it.) He ofcourse will buy it as soon as he's high enough to farm more lucrative stuff. But we're speaking 1.5 years ago, when MOST NA players were hopping along at level 30s.

Flashforward to Now

Most players that have been playing since the beginning are on at least their second or third trek to 75. Their earning powers is so much more than before. Alot more money are now in circulation. Demands for the pin risen. Prices go up. You said there are so many more pins around now vs then, why did the price go up?

The same 3000 players on the server now aren't the same as 1.5 years ago. Their purchasing power increased tremendously. Back then when only about 1/10 of the population was able to afford a pin, now most can because of the increased amount of wealth they have acquired over 1.5 years. This is represented in the form of levels (ability to fight harder mobs for better drops, HNM etc.) equipments (the ability to sell back equipments acquired over the years to get new ones,) craftings, better knowledge of money making, etc.

SO Your point fit perfectly with the Supply and Demand Curve. You failed to understand inflation. You compared this with the real world, its not. The game is a much accelerated version of the real world economic. You also failed to notice new equilibrium. You mentioned the 200-300k jump in a single week on certain items. Yet you failed to observe the items over a long period of time and note the equilibrium where the new price sits at. Prices increased in stages, be it a few weeks or a few months. It fits in with the demands because: PEOPLE LEVELS INCREASED IN STAGES ALSO

Example: Pin does not go from 300k >> 1.2 mil over 2-3 weeks. It jumped in stages perfectly intune with the inflation theory. You failed to notice that demands might have changed from weeks to weeks. IE. After 2 weeks there might be MANY more players that reached the levels to use certain items. You think that just because SE made the mob drop 3 or 4 pins a week that it soon will flood the market and drop the price? Well every week another player switches over to jobs that can use those items and buy them, and KEEP them. People rarely sells hairpin or boots back because those items are good all the way up until near endgame. Therefore the majority of the pins on AH are from NEW drops. Suffice to say that those drop rates remain the same as 1.5 years ago. Yet demands for them are now so much more.

THe problem with THIS economy I think, is NOT greed, and definitely not lazyness. Rather its an inherent flaw in the system it self. Unlike real life, your money does not go into rents, or insurance, or dailty sustanance. Those are the things you can never get back. A majority of your daily income goes into those thigns that you cannot sell back. You cannot sell back to teh AH your lunch from yesterday. In FFXI world, Money came from an infinite source through drops and are rarely taken out. If you buy food from the AH, that money is going to someone else's pocket, its not going out of the economy. THIs causes the severe inflation NOT comparable to your Real life economy.

I Know it sucks for the new players, it sucks for the casual weekend players who didn't "***** IT UP" to high level during those 1.5 years. But as of right now, I don't see a way of changing it.

i think you know what you're talking about. i also think you choose to pick fights and call people names. i also think you use large vocabulary words in an attempt to seem somehow 'better' than the person who you are responding to.

if you would get over yourself, and read what people are saying about the issue at hand, rather than simply try to point out how they are wrong, we would get a lot closer to agreeing what can or cannot be done. if you have nothing further constructive to add to the topic the OP brings to light, please refrain from posting.

That's true. I did that. I don't usually resort to that, and in using "n00b" I may well be just as I said, some ignorant person trying to hide his own ignorance. But I used it for a reason - I'm tired of people discounting theories that they don't understand and coming up with half-baked ideas that implicate any honest player who just wants to make a few gil. Shadowbuni's espoused "greed and laziness" several times, and others have as well, and I'm trying to convince people that the "greed and laziness" theory is of little or no help in explaining the condition of our economy.



I think the largest words I used were "supply and demand curves" and "equilibrium". I use these not to look down on people, but because they are terms used in applying the supply and demand model. I don't want to "seem somehow 'better'", I just want to show that I know more about this particular topic. Granted, my capitalization and spelling insults were rather petty - I'm sorry, its a prejudice of mine.

My previous post was a product of frustration. However, I'm leaving it because I think there is something constructive in it.

I'll elaborate, in fact. People think there is something wrong with the economy. There was a point when I thought there was as well - we were seeing some pretty nasty price jumps, particularly in one of the items in question, the Emp. Pin. It looked like we might be experiencing hyper-inflation - a really really nasty thing.

However, the more I thought about it, and the more I ranted with my linkshell (sometimes at them - I'm sorry), the more I thought that there really was not anything wrong. Several basic economic forces could explain all the price changes. And while they didn't make life any easier, they didn't point to an economy where there was a problem.

First, we've been experiencing inflation. If you want to look at that, consider the prices of crystals, food, and basic items that don't have a price cap on them in the form of NPC vendors. Probably 1 gil when I started is worth 2 to 4 gil today. Over a year and a half, on the scale of an economy like Vana'diel, I don't think thats too horrible.

Second, we've been experiencing major changes in terms of the buying habits of the population. As people level in spurts, and their earning power increases, the demand curve on many items shifts outward. In the case of the E. Pin, an increase also in the popularity of ranger and ninja meant a lot more people wanted the item. But the supply curve doesn't change. Probably in the early days of the game, trying to get 300k for an E Pin was a dicey proposition - you could expect to see it back in your inbox if you put it up too high. Towards the time when the price jumped, you could put it up for 300k and expect to see it sell really fast. Possibly, on some days, by the time you got back to your mog house.

According to the "greed and laziness" model, this is where people got greedy and lazy. Sellers tried to sell higher, and lazy buyers who wanted it now and had money were willing to buy it for that.

According to the "supply and demand" model, the change in price was overdue. The concept that "prices are sticky" is rather hand-wavey, but makes sense - people don't want to take the risk to sell higher, especially with the new AH tax - they want to make sure their item sells. But when there are none up, and you're virtually guaranteed of selling an E. Pin within a few days, it makes sense to take the risk.

If we talk about willingness to pay, putting an E. Pin up for 300k means 50 people who are trying to buy it will have the money, and trip all over each other to get it. If it was put up for 500k, maybe 10 of those people who are trying to buy it will have the money. Now, assuming we have 50 honest people, what the fact that 10 have 500k and 50 have 300k theoretically represents is that the 10 who have 500k have put more work into the Vana'diel economy and taken less out than those who have 300k. So, if we have one E. Pin to give out, who should it go to? The seller wants something in return to justify his time getting it, which he deserves. Do we sell it for 300k to one of 50 people, probably to whoever is in the right place rather than the person who might deserve it more, or do we sell it for 5k to one of 10 people, who have contributed more (in theory)?

The equilibrium we might reach here is 500k. The number of people who have 500k to spend on an E. Pin within a certain time frame equals the number of E. Pins produced over a certain time. This is equilibrium.

Assuming a fair and competitive market, there's really nothing wrong with whatever equilibrium price the market reaches, whether it be 500k for a Gluttony sword on one server, 700k for the same sword on another, 300k or 1m for an E. Pin.

If you add unfair factors, like monopoly or gil buying, this throws the equilibrium off to a point that isn't fair to everyone.

Much of what I say here in fact applies better in Vana'diel than the real world. The system is pure - no one is unemployed, and anyone can go get the gil, or put time in to get better at earning gil, to get whatever they want. It all depends on what its worth to them. The fact that we don't have certain overhead expenses might, as Bowser points out, be an issue. But I don't think its really all that bad - the AH tax is a major contributors towards taking gil out of the economy.

I've several points I've been trying to make over and over with all this that I feel people are missing. First, I don't see anything wrong with the economy. It has issues, but I see it as fairly healthy, and I see SE as aware of the issues of it, and working to handle them. Second, I don't believe we can change the economy. We shouldn't be able to. Third, I believe even if we could, we shouldn't.

What people suggest here amounts to creating hyperdeflation to put prices back at some imagined "proper" level. Deflation is a bad thing for an economy. It might sound good, but it would effectively stagnate as people don't want to buy or sell for awhile. Taking disinflationary measures, which again I believe SE is doing, is probably a very good thing. Keeping inflation under control is important, but eradicating it, or trying to "reset" things, is a dangerous idea.

Shadowbuni thinks its a problem that the economy is based around the incomes of the players who left, and not the new server population. Part of the beauty of the supply and demand model is that this won't continue. For awhile, prices will stay where they are, but if we experience a major shift in the demand curve that occurs with many high level players leaving, the economy will slowly change to reflect that. Eventually, it will base itself around the new incomes. As people realize their E. Pins are getting returned at 1m gil, they'll undercut, and prices will drop to 800, 700, whatever price is necessary so that they sell fast enough.

Many high levels leaving could be cause for a bit of worry, because I think this could lead to deflation. However, I think again that SE is aware of the state of the economy, and if changes were necessary, they'd make them.

Sorry for insulting people, particularly shadowbuni - again, its a product of frustration. I probably deserved the rate downs on my last post, but I'd love it if someone who thinks I actually have some good thoughts, or appreciates me taking the time to make these points, would rate me up. Sorry again for taking this on a slight tangent - I try very much to keep my posts on topic, constructive, and well organized, and its frustrating to see people who don't do any of this get rate ups because they complain that they're getting rated down. That said, don't rate me up because I'm complaining about it - rate my posts based on their content.

Edit: Adding some links. I posted these before, and was called out for insulting and demeaning people by posting them. I'm not trying to do that - these offer a good, concise explanation of the supply and demand model and inflation. I hope everyone who doesn't know much of supply and demand beyond "high supply low demand means low prices low supply high demand means high prices" will take the time to read them before dismissing my references to the supply and demand model as "buzzwords".

http://en.wikipedia.org/wiki/Supply_and_demand
http://en.wikipedia.org/wiki/Inflation

Edited, Sun May 1 16:29:48 2005 by Velfire

I still disagree that a server reset is necessary - I think it would be a negative thing. Its just a form of hyper-deflation, and there are those it would harm as much, if not more, than those it would benefit.

In the real world, I'm a lot more skeptical of applying the model as literally as I do to Vana'diel, but in terms of the game, I have a lot of faith that its a relatively fair and relatively reasonable system that anyone can succeed in with determination. I also think we're in a fairly good state right now, and that the economy is resilient enough to maintain a fairly good state.

Anyway, if its getting someone to think about the server economy in new terms, its definitely been a worthwhile discussion.