f13.net

Seems like there have been changes to the salvaging in this patch. Since Trinity I've been getting a lot less melted caps but last night I got a heap of them when ratting.

Also the Align to button rocks! As soon as I start the salvaging process, click align to and by the time Im finished salvaging I can warp instantly. Fleet ops are going to move SO much faster!

Did it go any faster? A while ago they were talking about considering changes that would make dedicated salvageships (multiple salvagers) obsolete.

I was missioning last night and salvaging did seem to be faster but I have no actual data to support that only my subjective feeling. I doubt that dedicated salvage boats would become obsolete even if the salvaging cycle was made faster, I don't often have multiple salvagers on the same target, rather I use my four salvagers and four tractors to process four wrecks at the same time. That's an advantage you can't obsolete by making a single salvager better.

They can do it if they introduce an AoE tractor field module, and an AoE salvager module.  But they won't do that.  Looting should be a lot easier, but shrug.

The carebear devblog a few months ago said that they were looking at changing salvaging into a mini-game, with more interaction.

It has to take roughly the same amount of time: more salvage per hour will just inflate the salvage economy.

Deflate. Prices would go down not up. Increasing salvaging rates means more salvage means its worth less than it was before. Such, the price decreases.

If volume increased more than the price decreased then salvaging would become more profitable and the prices of rigs would decrease instead of just the prices of rigs decreasing. If volume increased slower than the price decrease then salvaging would be less profitable and the prices of rigs would decrease.

The question of what happens would then become the question of why eves markets are inelastic.

I deliberately used the language I did, rather than "inflation in the salvage economy", because I meant that, here, salvage was the inflationary reward in the same way that in, say, SWG, money itself was the problem reward.  In other words, masses more salvage makes salvage worth less.  I'm not sure about the inelasticity you mention, however, given that substantially cheaper salvage would lead to lower T2 prices, which would increase the size of the market for T2 items, which in turn would boost production, increasing the demand for salvage.  This supposes that demand is the constraining factor on T2 production, and not supply, but I'd hold that to be the case, now that cartels no longer exist.  We already see massively more T2 items in circulation compared to a couple of years ago, now that the penalty for loss is so much more reasonable.

Anyway, for those not up to speed, Jade really hates Goumindong, which should buy him some credit round here.  Just don't accept his fitting advice or engage him on the subject of logical fallacies.

I don't think it was any quicker, no. But having said that, I was salvaging with a single salvager on a Raven, so I can't be sure.

Guys decreased salvage prices = decreased rig prices so this is a good thing and then making salvaging more interesting.

http://myeve.eve-online.com/ingameboard.asp?a=topic&threadID=663677

An idea for a salvaging boat I posted when I was sick around xmas.

Short answer:

A drop in the price of salvage via increased salvaging rewards is not necessarily a bad thing. It can be a good thing for both salvagers and consumers.


Long Answer"
A few things:(3 is the real heart of the answer)

1. Semantics: Now that this is clarified it doesn't matter, but i when i think "inflation" i think "prices of this good are going up". If prices go down, that is deflation. From now on, lets just state plainly whether prices on the good are going up or down and avoid any confusion.

2. I am fairly sure that salvage has nothing to do with t2 production outside of t2 salvage making t2 rigs. And i doubt people are going to be exploding more t2 ships just for the fun of it to make more t2 salvage. There never was a monopoly on rig production and there probably never will be. You might be confusing salvage with moon minerals. Which is where the complaints of costs in t2 production have been coming from.

3. I mention inelasticity because typically goods in eve are inelastic. You can see this by watching the markets on most major items. There are often huge changes in price with little to no changes in quantity. That is to say price changes do not effect volume changes much. Figuring out why this is is important to determine whether or not a change to salvagers will benefit the consumers or both the consumers and producers. Its important because at some point, rigs are likely to stabilize like all other goods do. If prices on modules are inelastic because demand is inelastic once market volume meets ship market volume(I.E. there is demand for ships and all other demand is a function of fitting those) then we have a bit of leeway to figure out how much price can decrease based on how many ships are currently rigged. If not, and its for some other reason we don't know, we cant. (It probably is, with non-fitting components being inelastic based on necessity to hold space/do whatever it is you are doing. Aside: I am sure there is an interesting study on elasticity and war floating somewhere in eve)

E.G. Lets say 30% of ships are rigged and time on market is low. That means that rigs can, roughly, increase in volume by ~230%. Or "we can increase salvage rates by roughly 230% before we are likely to start making salvaging as an action become less valuable in terms of isk/hour than it was previously". Since we can expect that an increase in supply will increase producer surplus up until the point where demand becomes inelastic. If we can guess or figure out where that is(and iirc there is no other way to do it with such radical changes) based on what we know of the system we can figure out how much we can increase salvage rates before it starts being a bad deal for salvagers.





My fitting advice is top notch :colbert: and i have since learned that explaining to Jade when he is using a logical fallacy does not work. Thanks for showing me that.

No, you're right: I had somehow persuaded myself that there was a role for salvage in T2 production (excepting rigs).  No idea where that came from.

I think Endie has a very valid point here and I think its what we are already seeing in the market fluctuation already. Before January the price of certain items e.g. melted caps were worth nearly double their price. If we increase the supply, there is nothing to say that demand will increase, therefore we could end up filling current market orders at the current value. All the lower market orders will then be the next highest selling price, gradually lowering the value of salvage to a point where it may not be worth while.

At this point we will probably see a small raise in their value as they become a rare commodity as salvagers die out. But it will have a yo-yo effect.

The demand for the goods produced also need to increase for the salvage worth to increase, which will probably happen after the cost of production is lowered, then the price of the sale goods lower and demand possibly raises, but again I think this will also be affected by the number of traders / buyers / population in Eve.

If you want to sound professional, you have to see "approach equilibrium."

Also, I'm pretty sure it's ok to say inflation in regards to supply and demand as well, although it's been a while since my last economics course.

If CCP wanted to increase the number of rigs bought and sold on the market, one thing they could do is reduce the number of skills required to fit them.  I don't use rigs right now because I don't want to spare a week training a skill that has such limited (and expensive) applications.

The skill requirements for t1 rigs is pretty trivial tbh, the thing that puts me and I suspect others off using them universally is the fact that a single t1 rig can often cost more then the hull of the ship you fit it to and if the ship goes pop it's lost automatically. They also reduce the flexibility of your ships. With other big ticket items you can recycle it around different ships or fits, with rigs you're locking a particular hull into a particular role, I had to sell my rigged Megathron hull at a loss recently because the rigs it had were no good for the new role I wanted to use it for.

Causing rigs to die with the ship is a good way of pushing the value equation in the direction of the producer.  Hopefully that's obvious - you can't reuse a rig so you have to get a new one if you get a new ship, thus pulling from the supply of salvage.

Since producers are typically poorer and newbs (trival to train salvaing) and the producers are typically rich fliers of T2 ships, IMO that's a good thing.  Pure capitalistic redistribution of wealth  :drill:

edit: btw, I wanted to mention that I don't know this Goumindong from Adam, but as his walls of text are actually interesting, Goumindong for CSM!  That Jade hates him is pure bonus.

The key part of your sentence there is "expensive" if the price went down you would be more inclined to use them. This is the standard demand graph. The question i posed above was "how much more would you all be inclined to use them if the price dropped x%". The same thing happened with t2 when invention came in. Volume increased, price decreased. Consumer and producer surplus increased(absent externalities due to violence)

You can fit a rig to a ship and then give it to another person to use. That person will take the full rig penalty if they do not have the skill, but they do not need the skill to fly the ship. So if you wanted, you could have a corp-mate fit the rigs for you then give you the hull. Many times this is not reasonable due to the penalties. But oftentimes it is.

I fly a lot of ships rigged. I have energy weapon rigging 4 now. It was worth every second.




Technically no. Though we would probably understand what you meant. "Inflating" would be o.k. but not inflation. Inflation is when price increases but value(or supply or demand) does not. Its a purely monetary phenomena.

I always see you spout lots of words on eve-o let me see yo skills dude.

That depends on which school of economists you listen to.  Several of the Austrian school would agree with Phildo, for instance.

I like this one.  Let's keep him?

Anyway, you're right, rig costs strike a balance with component supply.  However, the production/demand balance isn't the only piece of the equation, there's also supply elasticity.  If salvage components are worth less, it's not as attractive to salvage, especially if you're dragging a dedicated salvage boat on a second account.  If you just increase the total amount of salvage per wreck (as CCP did a couple of months after Salvage went in) this works out to a wash, more components that are worth less individually, and since volumes are fairly low this isn't a problem.  But you can still run into practical boundaries on how much salvage you can process.  Reducing the salvage timer makes it a little more attractive and increases total incoming salvage slightly, but turning it into a mini-game paradoxically could *reduce* the total salvage supply because doing it absentmindedly on a second box while your main continues to rat/mission is less viable.

--Dave

Lol, Goumindong, lol.

I would rather have four Jades than him. Yes, he really is *so* special.


PS, last time I checked rig bonuses and penalties were applied once, during fitting.

It should be noted that - so far as I remember - JoeTF has yet to say "that Goon ____ sure is a great guy".  It should further be noted that Jade is pretty tight with a lot of senior Bob.  Fuck knows how they stand him, but they do.

And you're right, Joe, you can fit a rig on a ship and give it to someone else and (at least last time I checked) they can use it.  I didn't know that penalties weren't even recalculated when you increased your rigging skill, though: you sure?

Knowing how they stand him mean they stand on chairs and he stands and slurps? Also are senior bob people cool with peoke? I honestly do not know which one is worse.

iirc, we were only talking about a supply increase, so in that case only the demand elasticity would matter. But yes, those are all certainly concerns of adding a mini-game in and there are limits to how much you can increase supply before you start to run into standard efficiency boundaries. However, those can be avoided by cleverly working the increase. If you double drops and half the size of the components then you have avoided it. If you took all rig BPs and halved their input you would have the same results for the players as well though the welfare increases would be caused by demand shift rather than a supply shift.

Still not that simple.  A halving of Rig component recipe requirements could be counted on to cut rig costs, at least in the short term, but if that did not at least double Rig demand, prices of components would fall, discouraging the act of salvaging, reducing supply and driving costs back up.  So there'd be a new equilibrium reached, one with less money for the salvagers.  The real question is: Where do rigs leave the system?  The cheaper they are in relation to their effectiveness, the higher the usage.  And the biggest complicating factor is that the same components get used across multiple rigs.  If you want to buy a rig, you're not just competing with everyone who wants to buy that rig, but with everyone who wants to buy *any* rig that uses the same components.  Since there are definite sweet spots in the available rigs, prices are driven by those rigs and everything else derives their price from what the same components would be worth as part of one of those.

It would seem far more effective for CCP to examine the relative usage of the various rigs, and dial down the component costs on all the ones that get used less.  With them being more cheaper, they'd get fitted as alternatives to the "best of breed" rigs, more rigs would be on board ships that get destroyed, and as a result demand (and prices) would go up across the board for components.

What it comes down to is that if someone is fitting a sniper BS, a HAC, or a capital, something very expensive, rig prices can be very high.  But to put rigs on a interceptor or cruiser, something with a high death rate and lower base value, you've got to have cheaper alternatives (or money to burn).  Just playing with the ends of the production chain isn't going to do much to change the basic dynamics.

--Dave

I have yet to sign with factions because I just know that with my luck I'll sign up, get a mission, head towards the system, then OMG GATE CAMP after the first jump and get completely ganked.

It used to be like that. No clue if they fixed it in the last year or so.

This is "determined" by the elasticity. This is why you attempt to find where the elasticity becomes inelastic.

E.G. lets say you do the first thing and demand is elastic. For every 1% that prices change, volume will change >1%.  So if prices go down 50%. Then volume must increase by over 200%. Making this really simple and ignoring the calculus which proves it. If our elasticity is >1(defined as elastic), then while this is occurring any change in volume must necessarily create a situation where p1 x v1 < p2 x v2(where p1 and v1 are the original price and volume and p2 and v2 are the new price and volume).

If we are inelastic then p1xv1 > p2 x v2 and if we are unitary then p1xv1 = p2xv2

Such if the elasticity of demand is >1(i.e. is elastic) then the gain for producers MUST be positive.

If elasticity of demand is <1(inelastic) then there will be a net loss for producers.

An easy way to prove this is to draw an isosceles right triangle with the hypotenuse sloping downward and to the right. Label the vertical side "price" and the horizontal side "quantity". Label the hypotenuse "demand" Put a point in the mid point of the hypotenuse. At that point the line is unit elastic. At points to the left of the line its elastic and at points to the right of the line, its inelastic elastic.

Take a pen or pencil and lay it vertically on the med point of the line. Where that intersects, draw a line from the hypotenuse to the quantity line and from the hypotenuse to the demand line. Label the vertical line q2 and the horizontal line p2.  Move halfway between the line q2 and the price line and do that again but this time label the lines "q1 and p1". Compare the areas defined by p2 x q2 and p1 x q1. Note how the area p2 x q2 is larger than the area p1 x q1.

Do the same on the other side of the line q2 and label the lines p3 and q3 note how p2 x q2 > p3 x q3. The elasticity of supply doesn't matter. Since this is a shift in supply, the producer welfare will always be later(think of the "gain" coming from the left and you can see how that makes it easy to compare the areas)

Such, any change that increases the supply of rigs will only be bad for salvagers if there is a malfunction in the markets(I.E. not equilibrating as they should) or the demand for rigs is inelastic.

Figure out where the demand for rigs becomes inelastic and you can increase salvage(or decrease what is needed) up to that point with no worries about hurting the people who salvage.


This is another issue all together and has everything to do with inter rig and ship balance rather than whether or not increasing salvaging rates will benefit salvagers. If you increased supply of all components then the prices of all rigs would come down based on their demand elasticity. If some less valuable rigs are pegged to more expensive rigs because of component overlap they will continue to be so while the more valuable rigs get more generalized use as their price drops for everything. Though it is one way of increasing demand for salvage components whether or not it will be beneficial depends on the elasticity of demand for these products since you are essentially increasing supply of the rigs which will have the same effect as shown above.

Ahh, but you see, you're thinking like an economist, and I'm thinking like a game designer.  In a classic economic situation, if a material is used for two products, and the demand for one of those products is causing the other to become economically non-viable, the second manufacturer can try to find alternative goods, they can try to redesign and use less of it, etc.  And if none of that works, then he simply can't make a profit making that product and he doesn't.  But I'm a game designer, I can do what neither the invisible hand nor the regulator can do: Ignore the laws of physics.  After all, I wrote them.

--Dave

Goumindong is making the exact same mistake that nearly all of those versed in economic theory, including CCP's own resident economist, Dr.EyjóG, seem to make when discussing EVE (or any other MMORPG for that matter):

Their theories and discussions are all based on modern capitalist economic theory. And EVE's economy is not a capitalist economy. There is no wage-indentured proletariat creating profit for a capital-owning ruling class via the surplus value of their labour. There is no dead labour locked up in capital infrastructure and there is no relationship between the flow of profit and any kind of means of production that depends on that profit. MMORPG's have a strange breed of artificial economy where everyone is essentially some kind of petit bourgeoisie member creating profit for themselves out of nowhere (e.g. ISK faucets).

Yes, that's a simplification, but let's not get into stupid pedantry and ignore the main point of my argument here - that capitalist economic theory, which is so piss-poor at explaining the actual, real-world, undeniably capitalist world economy, is of almost no use whatsoever in explaining what goes on in a fake, restricted, controlled and artificial non-capitalist economy like EVE's.

Which is why 99.5% of what you post, Goum, is, has been and always will be, utter nonsense. And just because the residents of places like SHC and EVE-O have realised that you're full of crap doesn't mean you can wander the internet to find other boards where you're less well known (like this one) and the pages of jade-like convolutions you post will suddenly be hailed as perfect sense and manna from heaven. It's still crap wherever you post it.

What's all this have to do with Shadowbane anyway?

I don't know man, I asked if my salvaging would be any quicker in the new patch and got hit by a couple of pages of economic theory.
These internets sure move in mysterious ways.

Not exactly sure if I'm correct in saying this but the salvage discussion is based on the fact that recovered salvage amounts have potentially increased, thus cheapening the salvage. It doesn't really matter to the average ratter if the prices are lowered cause you are still making same amount at the end of the day, why? cause you have more salvage in your cargo to sell. It will also have a knockon effect of cheapening rigs on your ships so you won't have to buy back your salvage (cause thats what you are doing everytime you purchase a rig) at such high costs. Some shield rigs sell for 2 million each while armour ones dont come less than 14 million at the minute increased salvage amount is something I suggested before in GD forum.

Currently it's very easy to make rigs and it seems the current profit margin is so low only the specialists are making them. So if you increase amount of salvage gained it will lower the price of salvage, initially people will start making a huge profit selling rigs and it will attract more people to producing them this will start driving the price down towards it material cost. Eventually there will be more suppliers to match the increased demand meaning that it will drive the price closer to its material cost in this case increased demand means increased suppliers.

Welcome to PvP.  :grin:

The trouble is that, once you get enough salvage in peoples' holds, supply exceeds the upper end of the demand curve: there's just nothing anyone can usefully do with the extra salvage.  At that point, prices plummet.

I fully understand that we can change everything we want. That doesn't mean that it will have the effect we think it will. Players will do what players will do and all the economic and political theory is here to tell us what players are likely to do. We can't change how players behave, we can only change the input.

More salvage means lower salvage prices but it doesn't necessarily mean lower profits for salvagers and whether or not it does is based on the elasticity of demand for rigs. That depends on a number of things, but if its elastic, then salvagers will find their isk/hour increased. In the case of the rigs that suck that don't get used. That is due to low supply. There are a number of ways to increase that supply, one of them the one you described.

So if action of the developer is "increase the salvaging rate" we simply get our model and shift supply of salvage components to the right and extrapolate what is likely to happen. This is why i was trying to impress on you that we were not necessarily dealing with that situation.



No. You are making the exact same mistake those that are not trained in economics do. Dr. Eyjog is making the mistake that bad economists do(which is to assume that there is some ideal and attempt move towards it, rather than examine what is happening in the economy and move around it). Economies are not capitalist or communist or fascist or anything. These are attributes of governments that make regulation over economies. Economies just are. They are the aggregate of all values of a society or system that trades with each other. Economies behave the way that we think they do because people behave in that way.

People are capitalist. Therefor economies are capitalist. There may be modified risk/reward, but we can see and monitor that modified risk/reward from the real world and plug it into the model. So long as we define what we are looking at correctly. We will get accurate predictions.


When you perform services, you "create profit for yourself out of nowhere". Holy shit, the U.S. economy is a petite bourgeoisie member of the international economy! When you take a product, perform work on it, and then get something better you do as well. Holy shit, China is a petite bourgeoisie member of the international economy. When you take a product out of the ground so that it can be worked on, you do the same! Holy shit, Africa is a petite bourgeoisie member of the international economy! Everyone is bourgeoisie, fuck this place rocks!


No. Some economists who haven't a clue what externalities are or believe that they simply cannot exist and the market will correct for it are terrible at explaining the real world economies. But they are bad because they are fundamentalist idiots who cling to a simple economic ideal rather than actually looking at what is happening. They read a book by this guy Adam Smith, decided it was cool, and haven't changed their ideas for three hundreds years.

But eves economy is actually a lot more simple than a real world economy. Because we can, and do, control everything. And that reduces externalities. And there are very few public goods. And that reduces externalities. And the public goods we do have are typically understood to be distributed by shooting each other and if we just ignore those externalities because shooting each other is the point of the game, then that reduces externalities. And all of our public goods that aren't terribly over-supplied are all infinitely elastic and often at zero cost(docking for instance)

I am not sure if this is cool here, but i am tired of posting logical arguments and not getting through to people. You're retarded, you have no education in the area and this shit doesn't make sense to you because you're retarded and uneducated. Go to school and come back when you understand this shit, or read a book (http://www.amazon.com/Principles-Economics-Student-Gregory-Mankiw/dp/0324224729).

This is why you attempt to figure out where the demand curve is likely to stop being elastic and start being inelastic. Then you know how far you can increase supply before starting to hurt producer welfare.




Profit margin on a very popular rig(that Specops produces for specops) is currently 300% in Jita. Though how well that transmits into other areas i am not sure. But I am willing to bet that a lot of the prices for rigs simply aren't moving towards equilibrium very fast due to low activity.

Its the same for invention mainly iirc. Profit margins are actually pretty good. People just don't think they are and so are less likely to get into the game.

Aye Goumin I had the common T1 rigs in mind when I said this the profit margins on a CCC isn't exactly glorious or the armour rigs for that matter. I'm not sure which ones you are talking about but Im sure demand is quite low for them.


I agree we can speculate til the cows come home, but the fact is everyone knows there is a huge demand for rigs thats not being satiated cause the prices are so high. It really has to be tested its not hard you just gradually increase the salvage amounts  over a couple of months 10% here 10% there see how the market reacts. As martin said changing the material cost is another way to make them more available probably the best.

Joe, I take it back.  You were right.

It's things like this that ensured you didn't get elected onto the CSM goum. You are very like jade in several respects, one of the main ones being that you think you're smarter than everyone else in the world and you're arrogant and abusive about it too.

You don't post logical arguments - you attempt to browbeat everyone else in any discussion and ignore every single word anyone else says unless you want to ridicule it.

From reading your rant there, it is my opinion (notice that bit, that's how to engage in discussion, which should be a 2-way process) that you don't know what socialism and capitalism are but have simply swallowed the free market bullshit that you were fed at University and have never thought to question it nor compare it to the real world. But of course, other people's opinions are irrelevant aren't they, because we're all "retarded and uneducated". You'll be calling us all "faggots" and "noobs" next, cos that's clearly how proper educated people discuss things isn't it?

Please, take the schoolboy internet abuse back to SHC.

Is this about the game not recalculating rig penalties? If so then shit! Under what circumstances does the game recalculate them? Do I need to contract my ship to an alt and then contract it back every time I ding another level in the relevant rigging skill?

And not to get too far into the economics debate, I salvage a lot and I looked into what skills I'd need to make rigs and sell them at the current market prices. As far as I can tell a lot of the rigs are being sold for a loss (especially things like CCCs) if you price the salvage required to make it at the market value. That's the reason why I'll be dumping all my melted cap consoles onto the market rather than spending a few weeks training up industry skills.

no, that other thing :awesome_for_real:

It's totally cool. Especially after you take someone's argument apart bit by bit.

When you get bored of this, come down into politics.

We all float down there...

It's a trap!  Avoid that waste of space like the plague.  :ye_gods:

Actually i was talking about tech 1 rigs. I am just not going to tell you the rigs i am talking about because it increases the likelihood that people will build those rigs, increasing what i have to pay.


Absolutely increasing the availability or changing the material costs slightly will achieve the same goals. All that is is accepting that we don't know right where the demand becomes inelastic and so making smaller changes more often is less likely to produce a negative result.

Econ Stuff: Don't to read if you don't care

The statement about "demand not being satiated" is a disconnect though. Demand is a line which represents the aggregate value that people place on a good. One axis of the line is price, and one axis of the line is quantity demanded. What it means is that "at this price, people in the economy will buy this amount of good, and at this other price, people in the economy will buy this amount of good". When demand is increased, it means "people in the economy will buy more of this good at any price". I.E. The line is moved to the left.

Supply is the same thing, except instead of "buy" its "sell". So when you overlap the two lines supply meets demand and people bargaining eventually brings the price towards that intersection. Saying "there is a lot of demand that isn't being satiated because prices are high" means either nothing, because people will always consume more as prices decrease(I.E. if stuff was free you would consume it at an infinite rate*) or it means "demand is elastic, small changes in price will produce large changes in quantity"

*A lot of people equate "free" with "no price" this is not true. If Bananas cost 0 dollars at store people would not consume them infinitely. They would not because going to the store costs time and energy and this is part of the cost of the banana. If Bananas cost 0 dollars and materialized right next to people whenever they wanted one, they would not consume them infinitely because doing so would make them fat and the peels would need to be disposed of. Both of these are costs which are included in the "cost" of the banana. So a if Bananas cost 0 dollars and materialized right next to you whenever you wanted one, they would still not be free.


Petty Bickering: Don't to read if you don't want to be entertained


I know what socialism and capitalism are. I am about as close to a socialist as you can get in todays world. They are methods of managing economies by managing the means of distribution. The basis of economic models doesn't give a shit about the means of distribution. It doesn't give a shit because it don't flow from the means of distribution it flows from individual choices. Means of distribution are modeled as regulations upon the way in which people act. Saying "but Eve isn't capitalist" is retarded, it doesn't matter if Eve is or isn't capitalist. Capitalism is a theory of how to manage an economy to achieve the greatest general welfare. So is communism, so is Socialism, so is Keynesian economics, so is laissez-faire. None of these things are useful to eve. Because as MahrinSkel points out, in Eve we have the power to change anything. If there was a housing price crisis in eve, CCP could just delete houses until the price stabilized. We have direct control over supply and demand which is something no one in the real world does.

The only way that economics breaks down is if

1. People stop making choices based on costs and benefits(note, costs and benefits are entirely subjective and economics takes this subjectivity into account)

2. There is no two

People are greedy, make cost/benefit analysis all the damn time, and in general are not retarded. When economists get things wrong is usually because they lack the complete information to model the situation or apply the wrong regulations because they are stupid and/or disingenuous.



Bull. I don't post full quotes because it takes up a lot of dead-space.


Its more likely that I didn't get elected to the CSM because i don't usually attack people back(and goonswarm). It was this forum that showed me just how effective attacking the person really is. When people attack me personally I usually address the issue and explain to them how attacking me is irrelevant to the discussion. Which is probably more than they deserve.

Now, i realize that i called you stupid and uneducated, and this may have been a little harsh. But you have to understand that you came in here and simply declared economics wrong. You gave no argument and only "this is the truth"


The important Petty Bickering: Where someone gets called out to make an argument

Why do economic models have no bearing in Eve? Why do they have no bearing in the real world? What is wrong with them? Do you know? Or do you only "know" that they are wrong? How can you expect me to refute a argument that economic models are wrong if the argument doesn't exist?


/The important Petty Bickering: Where someone gets called out to make an argument

You can't just come in here and say "but they're wrong" that is shit that Jade Constantine pulls. He walks in and says, "you're wrong, because i said so!". No, you need an argument.

Now, i understand that what I am saying might seem a bit esoteric to someone who has no education in economics. But you really cannot expect me to educate you on the subject when you are unwilling to learn, declared it wrong out of hand, and doing so is a large time sink with no reward for myself.

I don't suppose someone wants to summarize all of these posts in 20 words or less? tl;dr

I agree about Politics.  I avoid it because I actually like some of you people.  I feel pretty sure that would change about five minutes in if I read that forum.

Apocrypha, as an uninvolved third party, the only person I see throwing schoolboy insults and posting unsubstantiated crap is you.  Goughaoiageset has provided a fair amount of pretty convincing (and not tail-chasing brain-aching Jadeist) arguments for his points.  So far all you've given us is propaganda to the effect that economists are stupid. Can you provide some more detail on that one? 

Two discussions:

1st: What would happen if salvage rates were increased? A: It depends + explanation

2nd: apocrypha: "Economics is a LIE!"

Not part of the 20 words

Apologies if I mischaracterize Apocrypha's position, i only had 20 words to work with.

So, ok, wall-of-text posts trying to edumacate us about economics in a "Factional Warfare Overview" thread.  Whatever, we can skip over the stuff.   But at which point do you give up?  Cause, I mean, we're not agreeing or we're retarded or whatever, but you're just going more and more into it.  Public speaking/posting 101:  you've lost your audience.  Stop.

I haven't read it fairly closely and I definitely haven't studied the applications in Eve, but from what I can tell Goumindong's right about supply/demand and all of that.

Where I see a bit of an issue with the capitalist theory is: how many people actually manufacture rigs?  It's a very small portion of the market, yes?  And even if the cost of materials become cheaper, why would they lower their prices significantly if there isn't much competition?  The Jita market may hit a lower equilibrium, but the non-hub markets will still have ridiculously high-priced rigs.

Unless I'm wrong and there really is a perfectly competitive market for manufactured rigs.

Maybe someone has sufficient admin-fu to split this thread?  Because there are apparently people who want to talk about it, but you definitely don't get what you bargained for considering the thread title.

Too much work, just use the FW Experiences thread instead. Someone can change the title of this one to 'EVE: Capitalism Economy or Socialist Dictatorship?'

All we need now is for Prokofy Neva to turn up and tell us that the EvE economy is a Stalinist aberration and the thread will be complete.

Prokofy hates me.  I know that doesn't make me special or anything, but it is true.  H/She/It is also one of the main reasons I joined goonfleet.

Hay guyz, I heard there's fighting in this patch?

Are you talking about that second life nut?
Please don't, we are on google and we have filled our nut quota for now, thank you.

He's fairly correct, although something free in Eve IS free cause unlike buying bananas from the Grocers in real life there is no fuel costs. Unless you want to get philosophical and state time as a fuel/commodity please I beg you don't go there. Hey Goumin I think they are right I think you need to paraphrase a little more if something is overlooked you can fill in the gaps later. I really want to know what T1 rigs you can make 300% profit from all the ones I have looked at have been low profit margins.

Time translates to convenience which IS an economic factor.  If I have to travel 10 jumps to get something for slightly cheaper, I'm gong to (probably) pay the premium and buy it closer to home.  Unless I'm a cheap-ass or value my time SO lightly that spending 30-45 minutes just traveling doesn't bug me.

I make most of my money because people will pay for a time savings.  I make one trip with a load full of stuff, and people pay my markup rather than run to a major market for it, they sell me their stuff because the margin they can get on a trip to the market to fill a buy order isn't worth it, and they can't do what I do (put it up on a sell order and wait for it to clear).  Time *is* the only non-fungible commodity from most people's viewpoint, time spent doing non-fun things is something they will pay to do less of.  This applies most strongly to the "retail level", but I do a fair business in niche production materials as well.  Lower margins, so I stick to the midscale stuff (stuff people buy in moderate amounts as part of a bigger project).

--Dave

You used the present tense: are you back, Mahrin?

Yeh you are right it was a slightly erroneous argument on my part. But the banana analogy is bugging me still what if they were Air-dropped on to your front porch are they not FREE then? or is opening your front door a cost factor?

Aye Mahrin I used to do the same haul stuff to 0.0 and sell it at 50-100% markup, the larger the item the more you could charge, Cloaks are a good seller haven't done it in months though. If anyone would like some advice on it ask me I know a bit about the market in providence. I made about 200-300 mil every couple of weeks it's kind of cool way to make money. You just watch it rollin once the haul is over only thing you need to do is make sure you aren't undercut once a day. 0.0 markets seem a bit more relaxed though it might be more intensive since I did it.

Oh my god. Is this patch good? Will it make me want to play EVE again, after having given up trying to have fun because it takes too long?

Not really.  I move freighters around occasionally and set 90-day orders.  I'm deliberately avoiding getting involved in 0.0 or cooperative economic ventures.  Faction Warfare is a little tempting, just to observe, but the actual shooting parts of PvP were never all that attractive to me and it has nothing else.  I don't have the faction ratings, and the thought of doing that many missions is the deal-breaker.

--Dave

Maybe?

Come try and tell us!

You're crazy-rich, right?  Then just buy pirate tags off the market and turn those in for sufficient faction.  Just take about an hour.

Opening your door is a cost factor, its just very small. Going to the super-market is also fairly small. Going to Jamaica to get them would be fairly expensive. Even if you walked(and swam) to each place. Time, energy, infrastructure, acquired knowledge, pollution, i am sure there are more, are all factors of cost.

There is also the external factor of cost. Which is costs that the seller nor the buyer account for(there are also external benefits). In the case of the bananas, the pollution from the plane that dropped the $0 bananas at your front door would be an external cost, because you would not be accounting for it regarding the benefit of eating the banana and the seller would not be accounting for it because he doesn't have to pay for it.


That depends what did you do in Eve when you were playing? If you were a pirate this just might, there are likely to be more targets all over low-sec all broadcasting their position with beacons on the overview. If you were an empire roleplayer or war declarer this also might since there will be lots of targets. If you were a hauler this will open up new opportunities as market hubs become less viable for certain factions. Gallente and Minmatar will have a hard time going to Jita for instance. Which should increase the size of Rens.

If you are a mission runner this probably holds little for you. Missions are afterthoughts of factional warfare and don't actually contribute to whether or not an area becomes captured(iirc) and so for the people wanting to fight they are kinda pointless and for people wanting to make money they are big risk machines when they could be doing level 4s in empire or level 5s in low-sec that didn't broadcast your location for everyone to see. I ran some level 2s and they actually seemed harder than the level 2s i did in back when i was a newbie in a maller(as opposed to now in a t2 fit Navy Omen on test), but that might just be too high expectations. With low initial payouts because CCP is still too stupid to start mission payouts on the expensive side rather than the cheap side, mission rewards are likely to stay low with the only tangible rewards being tags and salvage. Add in high chances of failure due to the distance you have to travel to do missions and its not likely going to be very populated.

OK I've re-read this and been thinking about it some more. First off yeah, I did wade into you Goum, unfairly and I apologise for that. However, repeatedly calling someone who just has a different opinion from you retarded is a really unpleasant way to go about things and it's that arrogance that I've never been able to stomach from you. My response to your posts is, as a result, usually tainted by my extreme distaste for the way you talk down to anyone attempting to join in a discussion with you. I'll try and leave my bias out of it here.

So, let's leave the bickering aside, I think it's fair to say it's not very productive.

Secondly, I'm not an economist, that much is obvious, I'm a biologist (and some other things too) but my view is that the way economics works is based on mathematical models of how people make, buy and sell things in the real world. The decisions people make in the real world are totally tied up with the system we live in. Economists seem to me to always reduce things to cost/benefit analysis being carried out subconsciously in people's heads, but people don't work that way, we're emotional creatures with drives and desires far more complex than simple cost/benefit.

Branches of psychology that apply economic-type motivations to human interactions are fraught with risk because they attempt to ascribe predictable behavior to individuals based on their own internal emotional cost/benefit mechanisms - transactional analysis is the most commonly applied method and this can work well as part of cognitive therapy but it's not very good for predicting large-scale behaviors. Digressing a bit here.

My point is that the way people act in the real world isn't just determined by personal cost/benefit analysis and doesn't always conform to predictions made by economic theory. In online games this can happen to an even greater extent because the risks & benefits that players experience as a result of their in-game economic decisions are removed from reality by another step. A good example of this is the whole "minerals are free" manufacturing types who price the ships they make lower than the value of the minerals they used to make them because they perceive that those minerals cost them nothing because they mined them themselves.

Economic theory seems to me to be particularly bad at predicting how things work in the real world. If economics was really any good at understanding the markets then I don't believe we'd have quite so many people who are supposedly experts in it being completely blindsided by economic crashes, sudden downturns in markets, collapses in banking systems etc. I mean, the British government has just spent a sum of money equal to out entire annual NHS budget on propping up a single failing bank. Getting these economic models right in the real world has major impacts on people's lives. If they fuck up so badly when applied to the actual system they're designed to model and understand how can these theories be useful when applied to a completely different system?

I think that the type of system we live in, capitalist in the case of the real world, artificial pseudo-capitalist in the case of EVE, has a large effect on the personal decisions people make and limiting them just to questions of supply, demand and consumption is reductionist and not very useful. What I would like to see would be some economically trained and savvy people attempting to re-evaluate modern economic theories specifically to apply to MMORPG economies, not just slavishly attempt to apply them irrespective of different underlying systems.

Edit: away for the weekend now, will come back and see how badly my opinions get torn apart early next week :D

Prokofy hates just about everybody.  She will make a great show of liking you, until you disagree with something she says.  Then it all degenerates into a whirlwind of polysyllabic insults and general nuttiness.

BTW, Goum, generally the best rule here is to ignore the first insult, express disapproval of the second, and *then* you start swapping punches.  And when somebody admits fault and stops, go to your corner and wait for the ref's decision.  It's not the best place for the thin of skin, we tend to include the occasional gratuitous ad hominem just because it fills out the paragraph and supplies emphasis.  And we've had some truly epic flamewars.  But generally the level of discourse is about 50 IQ points above Eve-O.

--Dave

There are no models of how people make things. Only how they value things. There are two parts then to economics. The first is the theoretical. Which simply says "value", which encompasses all value ascribed by humans, the second is the practical(econometrics) which is actually measuring these things so that we can use the data(E.G. measure the change in quantity relative to the change in price for a good when the price isn't changing and/or you don't know what all the factors are in making the price change when it does turns out to be fairly difficult) in a predictive manner.

The mistake you are making is in thinking that this "value" doesn't encompass all the emotional drives and desires that people have. It does, it just ends up quantifying that as a measure of price. E.G. A person goes to buy a car, there are all sorts of cars and he decides which one to buy. He can buy a car in pink, a car in green, or a car in blue. The mistake that is commonly made is that these three items all have the same "value" when in fact they do not. If they had the same value the person buying the car would have to flip a coin or roll a die in order to decide what to buy. They might have the same value to the person selling, but probably not the person buying. You can determine how much this is worth to them by seeing at what price they would change their mind. I.E. lets say i had these three cars and you wanted the green one. If i increased the price of the green one above the blue and pink one i could find out how much you valued green(on that particular make and model), by the difference in price you were willing to pay.

The assumption that people value things differently and for varying reasons is implicit. And it is in fact why trade works. If people all had the same values then trade would not be reasonably possible. Trade is only possible because when i buy something I value what I am buying more than what I am spending(how much more, is not necessarily known), and the guy selling values what I am giving more than what he is selling.

To bring this back to the issue with rigs. People value them differently, but they still value them in the same way. If you valued a particular rig at 5m isk, and you would by 3/month at 5m isk, but if it was 1m isk you would by 6, and if it was at 0m isk you would still by 6. Then if the price were 10m you would by zero. And if the price were 3m isk you would by 3, and if the price was 1m isk you would buy 6. And if we add that together with all the other values that all other people have, we get the demand line for rigs. Its the same for supply, but its the cost at which you would sell those products rather than buy.

The only way that you can reasonably say this is not so is if there is no person in the game who would by more zealots at 15m isk each than at 400m isk each, replace Zealots with any good in the market and it will hold true. As things are cheaper we buy more of them. As things are more expensive, we buy less. As things are more expensive we sell more of them, as things are cheaper, we sell less. As things change in value, demand shifts(people will buy more at any given price as value goes up, and buy less at any given price as value goes down), as things change in availability, supply shifts(when there is a more stuff people will sell more of it for any given price. When there is less stuff people will sell less of it at any given price)


This is false. Economic theory fails when it doesn't have the data to predict what is happening. People still act in accordance with the theories. In online games the risk/reward is different, but still exists. Players are less risk adverse in online games than they are in real world. Oftentimes there is much less risk in the online game which compounds the problem of comparing them directly because less risk means less cost and less cost usually means more inelasticity(E.G. if candy bars cost a dollar then changed in price to 2 dollars you are more likely to buy less than half you would have at 1 dollars than you would be likely to buy less than half of what you would at 1 penny if the price increased to two pennies)

Why is this true? Opportunity cost and decreasing marginal returns.  Opportunity cost is essentially the concept that "the cost of something to the individual is what you have to give up to get it". The cost of going to a movie is 7 dollars plus the cost of playing eve for 2 and a half hours, chatting on a forum for 2 and a half hours, masturbating for 2 and a half hours, working for 2 and a half hours, going to a bar for 2 and a half hours, playing golf for 2 and a half hours, listening to music for 2 and a half hours, going shopping for 2 and a half hours, etc. Decreasing marginal returns means that the value you get from doing anything decreases per unit of time/effort as you continue to do it(there are exceptions to this, but we can ignore them for now because they wont apply in this case and the decreasing returns always end up applying in the end). So if i work for 10 hours working the 11th hour will be less valuable than the 10th was. This means I am more likely to spend the time doing something else.

In eve, the easiest way to see this is "man, i can't rat anymore lets go kill some people" or when you stop playing for a time, or when your logistics director burns out and quits telling someone else to go do it.


Part of this is the weather thing. Climatologists can tell you that if you increase the energy of the system there will be higher highs and lower lows, more hurricanes, more dry spells, more cold areas more hot areas. But they can't tell you there will be a hurricane until it forms. And once it does form they all get to bicker about how strong it will be when it hits the coast.

Its the same way with economics. They can tell you that pigovian taxes are great to correct externalities and that capital taxes are typically more inefficient than other taxes. That sales taxes encourage saving and income taxes encourage spending, that at some point increasing taxes is likely to decrease revenue and that lowering taxes will increase the GDP over what it would have been otherwise barring any externalities.

The housing crisis was predicted around 2000-2002. There just wasn't anything anyone could have done to stop it. Speculators wouldn't stop buying because fuck have you seen how high prices have become? Shit, buy buy buy, turn it over in a year and make 40%!!! The economist sees this happening and says "welp, this could be bad, better bunker down and weather out the storm" in the same way the climatologist says "welp, Katrinas going to be a big one, lets just hope it doesn't hit anything too important". Economists are just as powerless to change the values that people place on things as anyone else. They are just as powerless to change the amount of stuff floating around just as anyone else is.

They can only look at the system and say what will happen when things change. That isn't to say that economists can't do things that make it worse(and they have, many times), but that is down to the individual competence and honesty of the individual economist rather than the system itself. Probably a great example of a lack of competence and honesty is "the republican party". "The Laffer Curve" is a theory that as you increase taxation revenue will increase towards a point and then decrease after that point(possibly many points) and that there is an optimal amount that you can tax to receive the most revenue for the government. This Curve is defined by the elasticities of supply and demand(I.E. how much value changes). The more inelastic(I.E. the less that quantity will change with a change in price) that these are the greater the revenue that can be gained from taxing the good is and the longer it will remain so as you increase taxation.

Now, the republican party got a hold of this and said "see, this proves that decreasing taxes will increase revenue, lets decrease taxes!". Now of course, decreasing taxes will only increase revenue if you are "over the hump", otherwise it will decrease revenue. The Pubbies decreased taxes, revenue fell, and the deficit increased to a point never before in the history of the United States, not even during wartime(when govt expenditures are typically higher). This is a case of someone getting a hold of the theory and being disingenuous.

Another example of disingenuousness(and irony) would be pigovian taxes. Pigovian taxes are taxes on a good that has a negative externality(which is to say it has a cost that is not figured by the people who are buying or selling. E.G. This big long wall of text has negative externalities because its going to impart costs on a bunch of people reading it and i play shortstop) in order to correct that negative externality. By increasing the cost of doing the action that causes the externality the general welfare is increased as the externality is then corrected. Now the democrats generally support regulation and the republicans generally support pigovian taxes. This is ironic because the democrats generally support "pro government" issues and the Republicans generally support pro corporate issues. But the application of a regulation gives the surplus to the producer and the application of a pigovian tax gives the surplus to the government.

The real reason that dems support regulation and pubbies support pigovian taxes? Because when changing the regulation the pubbies can then reduce the amount of reduction in quantity creating a greater benefit for the corporation, while the democratic base is to reactionary and ignorant on the effects of taxation and anyone who says "I'm going to tax this product or activity until they end up producing no more than the same amount as imposed by the current and/or more stringent regulation that we would like to see pass" isn't going to win anything with anyone. People will hear "taxes and lots of taxes and no regulation" even if it makes sense to do it and you have made everyone angry rather than anyone happy.


This is a big mistake. MMOG economies are easier to manage than real ones. Because you can have control over more variables. The economies will behave in roughly the same way(with different values for everything of course). But in an MMOG we have the power to set prices in a way that is not detrimental to the general welfare. In an MMOG we have the power to simply increase the supply of goods that are not plentiful enough and decrease the supply of goods that are too plentiful.

In the real world we have a way of adding money to the economy and subtracting money from the economy. But we have to be very careful with its use. Not using it could cause drastic problems, but using it stupidly could cause other drastic problems. And we have no way of adding or subtracting stuff.

Now, in eve, we have a way of adding and subtracting money from the economy and a way of adding and subtracting stuff from the economy.

Imagine a machine that could take an infinite amount of any amount of energy or stuff and convert it into cash at some ratio. And another machine that could take an infinite amount of cash and convert it into stuff or energy at some other ratio.

We have that in eve, except not only do we have that, we have our hands on the dial where we can tune the ratios of stuff to money as we see fit.

We have control of so much more and it makes figuring out what will happen so much easier, because when a hurricane comes along you can just start deleting wind and adding sunshine until its gone and when a drought comes along you can just start deleting sunshine and adding rainclouds.

In Eve, we do this dynamically by letting people choose when to buy and sell using these converters(NPC sell orders, and insurance mainly) which is even better since it manages the economy naturally and simply increases benefit to all parties.

TL;DR

WALL OF TEXT WALL OF TEXT WALL OF TEXT
WALL OF TEXT WALL OF TEXT WALL OF TEXT
WALL OF TEXT WALL OF TEXT WALL OF TEXT
WALL OF TEXT WALL OF TEXT WALL OF TEXT
WALL OF TEXT WALL OF TEXT WALL OF TEXT
WALL OF TEXT WALL OF TEXT WALL OF TEXT
WALL OF TEXT WALL OF TEXT WALL OF TEXT
WALL OF TEXT WALL OF TEXT WALL OF TEXT

Not true. Its only true if you are thinking like a trader. I think that is the core of my problem with over applying classical economics to game worlds. The core currency of a game world is, or should be, fun. If people have fun making stuff, and don’t need money, the market price is irrelevant. They make stuff while it is fun to do so, and stop when they get bored.

This was particularly true in “A Tale in the Desert”, in a small game world where some people enjoyed the mini-games involved in making stuff. And simply gave the stuff away, or at a random nominal cost. I monitored supply and demand pretty closely in that world, and prices did not shift greatly with supply, demand or even tech changes. The dominant factor in production was whether it was fun to produce goods or not.

Applying classical economics to a game world does tend to be a self-fulfilling prophecy though. The trader mentality dominates. Which is good if you enjoy trading, but turns the game into a job if you don’t.

Fun is a value that indicates high supply. Price can be low, even zero(or close to it, because you have to figure transaction costs) if supply is high enough.


So what you are saying was "Supply was high and very inelastic"

We have now modeled your situation. All other modeling is just defining how high it was and how inelastic.

I  :heart: this thread.  If we could merge it with the Council of Stellar Management thread it would be in contention with some of the UO and SWG threads we've had for sheer bizarreness.

No you haven't. My situation was that I was playing the game for fun. Sure your edge case covers that, but has nothing useful to say about it. Thats what I mean by "over applying the economic model".

Hellinar, I think your example is flawed.  Eve and ATITD are apples and oranges.  A realisitically modeled economy always serves some other purpose; it doesn't exist in a vacuum. In life, it's this thing called survival; in EVE it's  war or PvE.  In your example, people made stuff because the process was fun and gave it away, so it really isn't a realistically modeled economy because the primary activity was the making, not the selling/buying.

From your example and for that reason it sounds like you can't apply classical economics to ATITD, but you can in Eve because the motivations are more like real life.  Many people take fun from acheivement in persistent worlds, which explains why the act of making something might not be fun, but people still do it to feel like they earned an honest buck by supplying something that real people want for their own purposes.

That seems about right.  Although there are some people who produce just for the sake of production, because they find that enjoyable in and of itself, most of the economic actors are doing it mostly for the money.  They're doing that instead of ratting, mining, or missions because for them working production or the markets is more fun, but they wouldn't be doing it if it weren't giving them in-game profits.  I enjoy the complexities of the market game, but my main motivation was the in-game power that huge stacks of cash gave me.  If there was an alliance problem that throwing a couple of billion at could make go away, I could throw the money at it and get the rush of knowing I had just changed something significant (in game terms, as I saw them).  My motivation was still fun, but making large amounts of money was fun because it was in service to some other goal.

For some people, just getting the biggest stack *was* the fun.  I had an income comparable with the top 20 or so Eve plutocrats, but a comparatively small net worth to most of those because I didn't stack my money, I spent it.

--Dave

Yes I have, you fail to understand what "playing the game for fun means" it means the values are different. Different values produce different supplies/demands. That doesn't mean it doesn't apply.

E.G. I play baseball for fun. And some people watch baseball for fun. And other people produce baseball equipment that i can use while i play. Now, i don't charge people who want to watch me play baseball to do so. But if i could, i would play baseball more than I do now. If i charged for people to watch me play less people would come. Professional baseball players have fun playing baseball. But i am willing to bet that they play more than they would if there wasn't the demand to pay them.

Its the sum of all the varying values that make up supply and demand. If something becomes more fun, then people will produce more of that good at any price. If its fun enough and demand is low enough then price might be zero.

Unless supply is perfectly inelastic over the entire range, which it cannot be because that would require that players have infinite time and no real world obligations then you are wrong. Since Supply cannot be perfectly inelastic over the entire range then you are wrong.

People who manufacture to have fun must also consider how to CONTINUE having fun.  If I make a lot of something and it's expensive and I don't turn much of a profit, that limits how much MORE fun I can have in that I may run out of money and have to do things like mission or rat to raise funds.  So even producing just for fun, it benefits me to manipulate the market to make a bigger profit in order to ENHANCE my fun, rather than sidetracking on time-consuming activities that I don't enjoy.

I  :heart: this thread.

I think what you are missing is that you can ignore the market as long as it is providing enough money to do the production you enjoy. If making a bigger profit enhances your fun, then you are no longer producing solely for the fun of it, but to maximize your income. And then that aspect of your behavior becomes predictable by economics. 

Economic models have nothing to say about how to make a game where producing is fun. Or fighting is fun for that matter. Looking at salvaging, the first design question should be “does this change make the game more fun?”. An obvious component of that is the effect on the economy, as it is a fun part of EVE. But it’s a secondary question, not the primary one. The primary question, economics doesn’t answer.

(http://i95.photobucket.com/albums/l130/Goumindong/paper-clip.jpg)

So, you're losing an argument. Windows Helper would suggest to

• Call them a name
• Change the Subject
• Strawman their argument

I see you've chosen to change the subject: It looks like you have been talking about economics. Windows helper suggests you tell them that it isn't really about economics and instead its really about bunnies. Everyone loves bunnies. If you keep trying to tell them that economics doesn't apply in the situation you're going to lose, but if you can convince them that people don't value things because they have to build a house right now, then you have a chance of making them forget what it was you were talking about in the first place.

________________________________________

Time is a finite resource for the players of a game. It takes time to do these mini games that produce. The output of these mini-games is not infinite. So the amount of stuff produced from these minigames is a direct result of the amount of time played. Time has value based on what you can do with that time. Value is a subjective measurement that varies from activity to activity. The less an activity is valued the more compensation is required to make that activity happen.

If an activity is valued highly(I.E. its fun) then little compensation(price) is needed in order to make that activity happen(people playing ATIND, producing stuff and selling it or giving it away).

Yes, economics won't tell you how to make something fun, but it will tell you how much people value doing things and what those activities produce. That economics won't tell you how to make something fun is irrelevant to the question.

There we will have to disagree. In applying any model, I think its critical to first check how much it applies to the case in hand, and what is beyond its boundaries.

In the case in hand, rigging, I think changing how rigging works purely to tune the economy would be taking a dangerously narrow view. And could lead to results your economic model can’t predict. Someone should be asking “how does this effect the overall fun of the game?”.

One trap in design is the temptation to optimize what we can measure, and ignore what we can’t. Following that route can lead to an economy that works great in theory, but a game that sucks.

Economics will not tell you whether or not its fun, economics will tell you what will happen if you make it more or less fun, more or less compensated(better stuff), or produce more or less end product. You have flat out claimed that this is not true and are now trying to change the subject when someone takes the time to explain how and why it does

No one is trying to optimize a market, they are looking at a goal and then figuring out how to achieve that goal. They are looking at an action( possible increased salvaging rates) and trying to figure out what that means for the game. You can then use that to determine whether or not it will suck.

From what I read, he just said that.  Why don't you go take a smoke break and go get some air?

This thread gave me PTSD. :ye_gods:

If i went into a discussion about whether or not certain aspects of design made something fun and said "This thing isn't fun because its not about whether or not its fun, its about whether or not the space government taxes it efficiently!" i would rightly be told that i was an idiot.

He is still denying that economics can give us insight into what will happen to the market and the game when you make changes. His specific argument is "Economics doesn't work because something should be fun". Everything "should" be fun. Great, we've reached an epiphany the quality of "humans need food to live".

Am i wrong in that understanding?

Yes. I am not denying that economics gives insights, or saying the “economics is wrong”.  I am however questioning a very specific statement you made.


Not merely because you typed “less” instead of “more”. I took that as a typo. That statement, like many economics statements, are true up to a point. It ceases to be relevant when demand is entirely satisfied. Lowering the price won’t then increase demand.

It is a much more important point in game economies than the real world one. For a couple of reasons. First, in the real world, lowering the price means your product starts substituting for more expensive goods. In game economies, uses are usually hard coded, and this substitution can’t take place.

Second, players in games are often using the goods for fun. The odd thing about fun is that using ten of something can be fun, using twenty gets a bit boring, and using thirty can seem like a job. This contrasts with the real world, where goods are often acquired for power or status, both of which reward infinite consumption.

I’m saying that economics is useful but limited tool when figuring out what is going on in your game. If you are looking at changing a feature like salvaging, its not the first tool you should be pulling out of your toolbox.

Goumindo's quote was absolutely correct.  As a producer who enjoys producing, if something is cheaper I will sell less of it in favor of other things that sell higher and will allow me to produce MORE FUN THINGS.  The original product will enable me to HAVE LESS FUN BY PRODUCING LESS.

One of the fundamental theories of economics is that as price decreases, demand increases.  The only way it possibly wouldn't is if everyone in the game already owned enough of a product that they never, ever thought they would need it again.  This is nearly impossible.

RE: salvaging is fun.  If the only change in the mechanic is how much or how little salvage is recovered from each wreck, that in no way at all impacts the fun of the activity except for "ooh, more loot."  If they changed the mechanic itself, then yes fun comes into play more prominently, but it is instantly an economic issue when it changes the availability of more or less salvage.

O.K. There is a fundamental problem here in that you do not know what supply and demand are.

Supply is the sum of all the values of all the people in the economy regarding the question "how much x would you sell at y price" for all values of y

Demand is the sum of all the values of all the people in the economy regarding the question "how much x would you buy at price y" for all values of y.

As the price of a good changes, assuming no other changes(at all, period, ever only thing that changes is the price). People will want to buy more of the product and sell less of the product

Lets use an example in the real world. If it cost 100 dollars an hour to have someone mow your lawn fewer people would pay to have a lawn mowed than if it cost 25 dollars an hour to have someone mow your lawn. If it cost 100 dollars to mow a lawn, more people would set up shop to sell their services as lawn mowers than if it cost 25 dollars an hour.

Lets use an example from Eve. If Zealots cost 100m isk fewer people would pay to fly zealots than if they cost 25m isk. If Zealots cost 100m isk, more people would set up shop to sell zealots than if they cost 25m isk.

Why? Because people have different values for items. If i value zealots at 90m isk apiece so long as I have one to fly, and i had 4. If the price were above 90m isk, i would sell 4 zealots. If you valued Zealots at 110m isk so long as you had fewer than two(one to fly and one for backup), then if the price were 100m isk, you would buy 2 Zealots. But if the price of zealots were 200m, i would want to sell all 5 and i would build more zealots in order to sell as many as i could make which is say, limited to 2/month more than i could when i was making 5/month so long as i had one to fly. So i would sell 6 zealots. But at 200m you could only afford one zealot and you probably wouldn't want to take the risk, you would buy 0 zealots.

So what happens? People bargain until the price and quantity sold get to a point where the same number of product would be bought at the price than would be sold. That price and that quantity is called "equilibrium". Not everything reaches equilibrium, its a process. But we can use this then, when demand and supply shift and when other factors are applied to the market, to figure out which way the price will go, and whether more or less stuff will change hands.

Slight Semantic correction:

Now, Phildo made a mistake when he said "demand increases". Its a small mistake, but it causes a lot of confusion among many people. Quantity demanded increases, not Demand. Its an important distinction because demand refers to that aggregate of all the values. And quantity demand refers to "how much stuff people would buy". Price goes down, quantity demanded goes up. But if Demand goes up, price will go up(demand going up meaning that people value the product more). If you have two people referring to each with the same term it can get very confusing when one person is talking about demand going up because the prices went down and another talking about how prices increase when demand increases. The people trained in economics probably understand what is going on, but the people who aren't will not. Thus the layperson is sitting on the side wondering why two people are agreeing with each other while saying exactly the opposite thing.

Demand shifts are things that make the product more of less valuable. If zealots received 3 more hit slots, 3 more turret slots, 2 meds, another low, and three extra bonuses, people would value them more. And would be willing to buy more zealots at any given price. The demand line would move to the right equilibrium would now be at a higher price with more of the product sold. Quantity Supplied would follow the price up to the new equilibrium(because the value of the good for the sellers hasn't changed, but all of a sudden, people want to pay more for them, inducing more people to sell more)

Supply shifts are things like "it became more fun" or "it produces more stuff" or "it produces less stuff" or "it became less fun" or "it makes less stuff"

I was reading the "we"  as producers collectively, who will collectively sell more of a product if they drop their prices. But your alternative reading makes some sense. 

Hellinar,

I think the basic point of contention in this thread is a definitional one:  you say "you can't model this with economics" by which you mean something like a market-based private property model.  The discipline of economics is much broader than that,  and encompasses the scientific study of all systems that seek to allocate scarce resources, and encompasses a number of approaches from Marxism to Libertarianism (economic, rather than political) and multiple stops in between.

Goumindong, Phildo, etc. see that statement and interpret it as "you can't model this with science",  which obviously generates the responses.

Err, that’s not my position at all. I’m sorry if my poor communication skills led to that conclusion. Looking back, I can see I haven’t been very clear. I believe game worlds are a great place to research modern economics. I hope that is what the CCP economist is doing. My beef lies entirely with over extending the classic model into areas it doesn’t work. My position is well supported in modern economics.

I’m arguing against the over application of the classic supply and demand curves to game worlds, not against the discipline of economics. In the classic curve, supply increases if the price rises. (See Wikipedia (http://en.wikipedia.org/wiki/Supply_and_demand) for a picture.) But economists have long known other supply curves exist, such as the Labor supply curve.

My contention is that these other supply curves are more common in game economies than real world ones. Particularly in playstyles where “fun” is the dominant motivation. Game designers, and game board discussion, often focuses on the classic curve, as if it was some “law of economics”. Rather than simply the most commonly observed curve. Designing your game economy with that erroneous assumption will tend to encourage playstyles for which it is true, and discourage those which produce non classical supply and demand curves. While I like the trader playstyle, I also like some of the others.

What game economies offer is a fantastic opportunity to study is *behavioral* economics, which is a "hot" field in that trade right now.  With value being abstracted into a pure form, with "goods" that are strictly protean in essential nature but still holding perceived utility, you get a fascinating picture of what an economy can be.  It allows laboratory experiments on economics in a perfect goldfish bowl and with absolute control.

--Dave

Are you saying a supply shift is going to increase the opportunity costs for salvaging greater than the marginal returns?

You have any evidence to support that?

Seconding.

Steady on the post splitting though. While some (I'm one of them) think it is quite useful in situations like the one you've employed it in it is generally frowned upon and you'll need to tone it down.

Turn to the ad hominem earlier though, btw.

I’ve no idea on salvaging, outside my area of knowledge. But on the observation of labor type supply curves effecting game economies, yes. No hard numbers, I don’t have access to the server data to provide that. Just years of reading MMOG boards, and playing MMO games.

The classic backward bending labor curve appears when a workers wages rise so high he has enough money to pursue his leisure pursuits, and cuts back on working time to do that. Further rises in wages just enable him to reduce his supply of labor even more, not increase supply.

This is pretty common on the multi-server fantasy game worlds, with their small populations and “boring” crafting. Only a small portion of the playerbase want to grind up the levels to make the good stuff. And when they get there they find that making the good stuff is pretty annoying, but pays very well. After a while, they find they can satisfy all their needs for gold just making a few “Maces of Ultimate Smashing”, and no price offer will induce them to make more. I’m sure anyone who has played many of these games is familiar with the high level crafter who has gone anon to avoid tells from people who want to give him buckets of money.

I doubt if this particular supply curve applies much in EVE. The world is larger, and production is game time but not player time intensive. But I wouldn’t be surprised if there are items and times even in EVE when this curve kicks in.

Yes, you quoted me saying that, we can move on.


Its very easy to determine whether or not this situation exists(I.E. whether or not the top end of the supply curve is relevant, I.E. intersects with demand). Increase supply and check to see if price rises.

Its also important to note that in any backwards sloping supply(with two intersections), the price setter will be the one with the most power. Otherwise you will have two equilibrium prices. I am going to wager buyers of rig materials have the most power.

Yes I would put money on that also.