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blankseplocked New Blog - Dr.EyjóG, EVE's Economist, makes his introduction
 
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breadcat
Hedion University
Posted - 2007.06.27 17:26:00 - [31]
 

Eve's economy is "broken" cause you can legally buy GTC (=rl money) for isk.

Ridley Tree
Veto.
Posted - 2007.06.27 17:26:00 - [32]
 

Originally by: HeadMasterPL
Originally by: Serenity Steele
Edit: PS Can what's your position on the need for the game system to support share trading? Very Happy



In my personal opinion it's the weakest point of otherwise great EVE economy - lack of financial markets. It's not only case of share trading, but all kinds of financial activity. I'm talking about bonds, and most importantly, bank loans. I would be happy to hear about your thoughts on the matter.

Cheers


There are financial markets. And they exist in the same way the early financial markets of the world existed. Little to no security. Large minimum investments. Almost entirely concerned with railroad... err tech II production companies. Fairly low trade volumes and your investment pay off is mainly in the dividends not the growth of the stock. Mainly invested in by the very wealthy.

A modern stock market in EVE would require some sort of security measures that we have in the real world. And I really don't think we want to go to those lengths for a game.

Marodi Julita
Sublime Captial Investments
Posted - 2007.06.27 17:39:00 - [33]
 

Get CCP to make corporations for profit more practical. Share system needs overhaul.

Also, a monthly inflation reading would be pretty sweet.

Malachon Draco
eXceeded
Posted - 2007.06.27 17:42:00 - [34]
 

As an economist myself, one of the things I would find most interesting is to see how much various economic activities are undertaken, and their relation to the market. I would certainly hope you don't limit yourself to the standard 'market screen' and buying and selling there.

- I.e., do we really see new entrants into the veldspar mining market when veldspar prices go up? Does a nerf to missions lead to increased belt ratting?

- The importance of market liquidity on priceformation. In what way does the high liquidity of Jita influence pricing?

- Price formation in the T2 market with 'lowcost' T2 BPO owners compared to highcost inventions.

- Market imperfections and arbitration. For example sometimes you will see goods sold for less than their mineral value.

- To what extent are transport costs incorporated into pricing, and how big a factor are they.

Marodi Julita
Sublime Captial Investments
Posted - 2007.06.27 17:44:00 - [35]
 

Originally by: Chruker
Edited by: Chruker on 27/06/2007 14:51:15
Hasn't greenspan already been replaced? :-)

Anyway, I'm looking forward to seeing some financial statistics like inflation.


Already replaced, but even though he has no power what so ever than his own oppinions, he still seems to hold the same power as the central bank.

Kirja
R.U.S.H
Red Alliance
Posted - 2007.06.27 17:57:00 - [36]
 

Shocked

I am impressed by CCP.

Having received B.sc. in economics two weeks ago im very much interested in EvE economics and looking forward to read some in-depth reports made by professional.

Alfar Sen
Posted - 2007.06.27 18:47:00 - [37]
 

Welcome Dr EYJOG

The best of luck with your work on the eve economy. Many fret over inflation in the game and I hope your solutions are not the standard we have seen thus far.

Unfortunately the antidote for inflation often places the greatest burden on the smallest stakeholder. As CCP attempts to suck up loose isk (without stemming the macro mining issues that greatly contributes to it), sources of revenue for the part-time player will dry up.

The LP Store is a great example. The LP system allowed the part time player to work slowly toward a payoff. Under the new system there is no "gift" just a reduced cost of an item that sells for less than it costs to buy it from the store. LP reward was the cheese down the hole of courier missions, now courier missions no longer hold financial incentive. The unintended consequence of squeezing the small operator to rein in inflation is that the small operator folds and moves on.

Altemi Calabre
Posted - 2007.06.27 18:58:00 - [38]
 

Much as I think you'll see some backlash about suddenly using the EVE community as Economy lab rats, having a professional analytical eye on EVE's economy sounds quite appealing.

Key issues that I would expect require detailed correction/investigation (having no more economics expertise than university level Micro/Macro so, no question, not deigning to impune the good doctor's expertise by expressing my opinion!):

1. Does GTC for ISK affect the economy? The amount of ISK in the system is fixed regardless of it changing hands (no ISK was created by buying the ISK, the player is merely transferring it for an in game loss of gaining no 'in game' material wealth... it's like every GTC buy is a massive charity donation and we have lots of altruists....riiiiiight) If so, how do you propose to combat it?

2. T2 BPOs versus Invention. This was a massive point of contention, people arguing against allowing the legacy items of T2 BPo's to carry monopolies once invention was put in as a competitive alternative... an alternative that cannot compete based on the simple fact that it has costs that the monopolistic BPO's do not. I would think the closest real world model would be patent rights, the patent holders having t2 BPOs and the Inventors essentially paying license fees on every build of the same object (except in this case the fees are being paid to a third party, NOT the Patent holder, so the example may not be viable).

3. Collateral costs, such as in LP stores. While the LP stores are a new addition to EVE introducing a secondary 'currency' beneath ISK, the LP stores also demand rare items and materials as part of the exchange, and in many cases these additional costs suffer from scarcity and thereby higher costs in terms of their ISK value. Is anyone paying attention to the therefore 'Real cost' of any LP store item? ((e.g. 148 Amarr Sergeant I tags on a 125mm Republic Fleet Autocannon is just ONE additional line item to purchase the item over the LP and ISK cost of it... To put this in perspective, at first pass, it's easier to secure and acquire an entire Republic Fleet Stabber or Republic Fleet Tempest, cruiser and Battleship respectively, than it is to secure a single weapon module for a frigate sized hull. This seems to completely annihilate any sense of relative value versus risk of lost investment as frigates die considerably more readily than your average battleship and cost considerably less))

4. Actual links between costs and effectiveness of ships of various classes/size. Is 60 mil worth of assault ships actually the same survivable asset as 60 mil worth of battlecruiser (totally arbitrary ships and numbers as example given)? Especially when you consider the potential cost of a clone death after a pod kill should the ship be lost and the pilot made vulnerable, again, more likely in the smaller craft as a general rule.

Those are the first major areas of value and opportunity cost scenarios on the massive scale that I know I would love to see careful attention and analysis levied against.

Best wishes in your endeavours and welcome to the void.

Altemi




Feronia
Gallente
Magma Holdings Group
Posted - 2007.06.27 19:06:00 - [39]
 

Welcome to EVE, Dr. EyjóG.
Looking forward to your first economic report.

Paddlefoot Aeon
SiN. Corp
Daisho Syndicate
Posted - 2007.06.27 19:24:00 - [40]
 

Something I would very much like to see explored is how changed to mineral yeilds by CCP (external "hand of god") influences the market.

When the new drone regions opened up with REVELATIONS 1, the mineral costs were greatly affected, especially the high end minerals like Zydrine and Nocxium. Nocx was previously selling close to 500 p/u... and is now under 200. Zyd was close to 4000 p/u, and dipped as low as the mid-teens, before rebounding as empire exploration sites had less zyd in them (hand of god again), and as REV 2 sees lower zydrine in the alloys from the drone regions.

I'm all for a player driven economy, but I would also like to see impact studies on CCP-caused changes to the mineral market, and by extension the module market.

Threv Echandari
Caldari
Moira.
Rote Kapelle
Posted - 2007.06.27 19:26:00 - [41]
 

Edited by: Threv Echandari on 27/06/2007 19:46:41
Originally by: Hardin
Edited by: Hardin on 27/06/2007 16:59:54

CCP do not recruit any more economists. They can never agree on anything so one is enough.

I am also interested to learn if Dr.EyjóG is a fan of

Keynes - http://en.wikipedia.org/wiki/John_Maynard_Keynes

or

Friedman - http://en.wikipedia.org/wiki/Milton_Friedman

This is important Razz




Friedman I hope....

That said I think its it would be hard to draw many Real world Comparisons since as someelse pointed out our Economy is closer to 17th century economies than modern ones. (even in Medieval times they had the Knight Templars which was the closest thing to a Central Bank). The Biggest reason being a lack of a regulated Banking industry. Without Banks to Give Loans or other instruments of Credit to Entrepeneurs, everyone is on Cash and carry basis. So I'm very interested to see waht you come up with, Especially with things related to inflation GTC Trading, macro-mining etc.

Alz Shado
EverFlow
Posted - 2007.06.27 19:27:00 - [42]
 

Originally by: breadcat
Eve's economy is "broken" cause you can legally buy GTC (=rl money) for isk.


This is the biggest urban myth in the game. If you look at the economics of the GTC, you'll see it's currently trading at between 150m-200m for a 30-day GTC. To keep the math easy, lets assume that's 150m ISK for 15.00 USD.

How long does it take to earn 150m ISK in game? Lets say an average player grinds missions and earns 150m ISK in 3 hours. That's five dollars an hour, or less than the US federal minimum wage.

So what does that 150m ISK buy the player? A T2 Fit battleship for PvP. Ship destruction as an ISK sink is essential to the economy of EvE. So that 150m ship ends up camping a gate and destroys 1b worth of goods before it in turn is destroyed. Net Gain to the economy? -1150m isk. That 150m infusion ends up *creating* 23 hours worth of playtime, net.

But what if that player isn't an evil pirate. What if they're using that isk smartly, for investment purposes? A Large POS costs about 150m a week to fuel, if you don't mine the ice or manufacture the parts yourself. An Outpost costs on the order of 30 Billion to set up. So we're talking about sinks that cost $60 USD a month to operate, or $2000 USD to build. Titans? $4000 USD.

Considering how many people complain that they have to pay $15 per month per account, I'd say neither of those are going to be common Cash-to-ISK investments. The only middle-ground we could argue would be cap ships, but by the time it takes to train the skills they could have AFK-mined enough veldspar to pay for the thing, which would have just as much an impact on the economy as the GTC trading. Maybe even worse, since it would flood the market with cheap minerals.

T2 Pirates trading GTCs? Dead ships = good for the economy!
Alliances buying outposts with GTCs? Prohibitively expensive.
Dreadnoughts and Carriers? Already timesinks.

Jei'son Bladesmith
The Storm Knights
The Cool Kids Club
Posted - 2007.06.27 19:46:00 - [43]
 

Originally by: Bruno Bonner
Welcom Dr.EyjoG

Hope your stay with us don't drive you mad Laughing, good luck managing the economics of EvE.


But if we don't drive him mad he can never truly be one of us therefore any advice he gives us will be corrupted by his innate sanity and be utterly useless and inapplicable to the insane yet entartaining world we all live and play in Very Happy

(Case in point....in a sane world I shouldnt be allowed in the forums Shocked)


Altaree
The Graduates
Morsus Mihi
Posted - 2007.06.27 20:09:00 - [44]
 

I look forward to regular reports on the state of the eve economy.

Level4
Red Frog Investments
Blue Sky Consortium
Posted - 2007.06.27 20:54:00 - [45]
 

Welcome to Eve,

I would be interested to hear your thaughts about market manipulations ...
some examples in the past have been the isogen player-driven spike in yulai,
and more recently the attempt to create a t2 components shortage ;)


Dr Kiss
Posted - 2007.06.27 21:36:00 - [46]
 

Greetings and welcome Doctor! I look forward to your analysis and reports on the state of the Eve economy. I also applaud CCP for this wise decision. They obviously recognize the importance of keeping their in-game economy under control for both game and immersion purposes.

Doctor - I would be especially interested in your thoughts regarding changing more of the NPC provided goods into player made goods. For example, all of the goods within the trade goods category are NPC provided.

Imagine instead having a player owned factory that costs a billion isk (or is even player made also) that produces a certain trade good(s), has raw material needs, can be destroyed, etc. It would open up an entire new avenue for industrialists, improve game immersion by having more player made goods replacing NPC seeded goods, and could provide a new sink for both isk and commodities. Could changes such as these be implemented to counter inflation and improve immersion?

Thank you, and welcome to Eve.

Mr Cleann
Caldari
State War Academy
Posted - 2007.06.27 21:44:00 - [47]
 

Dr.EyjóG Hi Sir. The economic parts of this game as well as the other day to day things in EVE is what has really managed to capture my desire to keep my accounts active. I have yet to find a equal or better game than EVE. However, There is one major problem or flaw with this game. Perhaps it is something that really can not be cured, perhaps it can be. One of the things I think that greatly affects the economy in EVE are the cursed Macro miners / isk farmers that are ever present in this game. Is there a way to either make them go away or perhapse simply flood the game with economic enhancements that it would no longer be worth wile for the macro miners / isk farmers could make much profit? Cool

K Kerryngktonn
Posted - 2007.06.27 21:53:00 - [48]
 

Greetings, Dr.EyjóG.

Since there are so many options given by the players earlier, I assume it would be much easier to start with simple things, like the weekly / monthly statistics. As you should have direct (at least read-only) access to the market database, it shouldn't be very difficult to automate the information gathering process. For example, you could start with the cost of "mineral basket"-driven statistics per each of the regions to form the inflation indicator as well as give some advice for enterpreneurs on where to start up a production venture. Such info would be beneficial for both of us, players and devs.

I hope that your work out there in CCP's hive won't be directed only to correct the economy from inside, without giving out crucial details to general public. I would also underline the "general public" here, as EVE community, at least its russian part, is sometimes very concerned about uneven distribution of information which in turn, as it's rumored, puts a small part of "chosen" players in better conditions. So you should be careful with the sensitive results of your insight into the economy.

Don't know if anyone actually read it, but anyway thanks for the chance to speak Very Happy Cheers and good luck!

Mr Cleann
Caldari
State War Academy
Posted - 2007.06.27 21:56:00 - [49]
 

Edited by: Mr Cleann on 27/06/2007 21:59:23
Hey CCP give the good Doctor an Avatar. I clicked on his name and got a blank screen. Atleast I didn't get a white square with a red x tho. lol thats a plus. Very Happy

Spoon Thumb
Khanid Provincial Vanguard
Vanguard Imperium
Posted - 2007.06.27 21:57:00 - [50]
 


I think it is time to poke the Khanid Economic Report back under the noses of the community

And you know what else might boost the Khanid Economy and get a few more ppl out of Lagland (a.k.a Caldari Space) ? Some half decent LP store stuff for Khanid Navy

Barwinius
Ars ex Discordia
Posted - 2007.06.27 22:09:00 - [51]
 

Very cool!

Xenofur
Aliastra
Posted - 2007.06.27 22:14:00 - [52]
 

out of pure curiosity... can we perhaps expect to see nice maps like this: http://www.di-tron.org/market/market.pl?task=market_maps on key commodities?

Zothike
Deep Core Mining Inc.
Posted - 2007.06.27 22:31:00 - [53]
 

Originally by: breadcat
Eve's economy is "broken" cause you can legally buy GTC (=rl money) for isk.

yes it will be interesting to see how he will analyse the impact of this element and the impact of the fact that there is no responsability in eve as you can sell/buy/change char and then can avoid a reputation to follow you, thoses element are not really RL like

Aeco Feife
Posted - 2007.06.27 23:22:00 - [54]
 

Outstanding!

Any info on how one might participate in that academic research?
Making data available public is fraught with dangers, but it would be candy to some of us.

Any way to set up hoops to jump through to get to some good stuff (data)w/o causing distortions? Given recent in-game scandals about relationships between CCP and players, how to marry up useful study and in-game (word like cleanliness)?

I participate in two RL economic advisory groups, and they are boring. It would be a thrill to bring some econometrics to bear on EVE. I'm certain analysts of one sort or another will come pouring out of the woodwork if CCP can set up a useful mechanism here.

All props to Dr.EyjóG, however. Best idea I ever heard.

I had a field in experimental economics myself, but wrote in a far more dull area. Don't need publications really, (industry job) but if I can pitch in for some labor/IO/applied econometrics, that would rule. CV available on request, lol.

(pls don't cancel my application because I said "that would rule")



Xaen
Caldari
Aperture Harmonics
K162
Posted - 2007.06.27 23:39:00 - [55]
 

Great, when are they hiring a Lead User Interface designer to fix the damn UI?

Nimani
Posted - 2007.06.28 00:17:00 - [56]
 

Welcome !

I would love if you could investigate some of the "urban legends" that are circulating on the forums.
Like, OMG inflation is killing the economy (while T1 & T2 stuff are cheaper than ever...),
GTC for isk is killing the economy,
We need more/less ISK sinks,
And many, many more.

An experts point of view on these statements would be great and hopefulle shut up some of the "expert" economists Laughing

Frug
Omega Wing
Snatch Victory
Posted - 2007.06.28 01:29:00 - [57]
 

Welcome aboard economy master.

I'd like to see the value of the t1 module BPO's become more useful, at least some of them. I might be wrong, maybe in some locations it's useful to have them, but so many of those BPOs just seem so worthless given how much they drop from rats and such and how many better named modules are on the market. The incentive to try and start a small business building t1 modules appears nonexistent to me though.

Skornik
Invicta.
Posted - 2007.06.28 01:31:00 - [58]
 

For all the noise around EveTV's first show (or shows - the Hellmar exclusive) this was mentioned there 4 days ago - maybe it's worth watching for news after all :)


Soren
PAK
Posted - 2007.06.28 02:17:00 - [59]
 

Edited by: Soren on 28/06/2007 02:17:09
Cool, It'll be interesting to see what you have to say in the upcomming weeks.

RtoZ
Posted - 2007.06.28 05:01:00 - [60]
 

Welcome to EVE. Since you have an unpronounceable Icelandic name I will thus forth refer to you as Dr Enyo.

Hehe, sounds like a James Bond villain.

CCP: good move, understanding the player driven economy better is one of the best ways to make eve better, allthough to be honest it would work perfectly if there wasn't a NPC economy at all. EVE, I believe, has reached critical mass for such an undertaking. In practice this means there should be an invention process for making BPO's and that asteroids should be permanent resource points (ie, the mineral value is defined by the cost of the time it takes to mine and haul it). But I'm sure Dr Enyo is more qualified to comment on this.


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