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blankseplocked Quarterly Economic Newsletter, 3rd Quarter 2007 by Dr.EyjoG
 
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Ilor Prophet
Posted - 2007.11.15 18:47:00 - [181]
 

While the mineral compression nerf has much to do with the rising price of Tritanium, I think that the drone regions are largely to blame for the crash in Isogen, Nocxium, Zydrine, and Megacyte prices. Why?

Because there is no bounty for drones, there is no ISK faucet associated with them. The benefit to ratting in those regions comes exclusively from refining the resulting drop loot. But in order to make the "risk" of going out into the 0.0 drone regions have a commensurate "reward," the drop rates skew towards the high end. Especially Isogen, Nocxium, and Zydrine. Surprise, surprise.

This direct injection of minerals into the market alters the fundamental assumptions on which the game is based because it alters the supply of the mid to high end minerals. In terms of manufacturing, it radically changes the costs to produce something in a way that a simple ISK-faucet does not. Building 2x Ravens consumes minerals (i.e. causes demand) in exactly the same ratio as building 1x Raven. Thus, ISK-faucets don't alter the demand ratios for minerals.

But since the drones offer no ISK-faucet, and the drone guts are the reward, the market is getting skewed from the supply side, not from the demand side.

At some level, I don't have a problem with Isogen trading at 40 ISK per unit. But if this is going to continue to be the case, Veldspar, Scordite, Plagioclase, and Pyroxeres need to get moved into lowsec, and Jaspet, Hedbergite, Hemorphite, and Omber need to get moved into Empire.

Or, CONCORD could just pony up and offer a bounty on rogue drones. The little buggers are a menace to society, after all. Then, simply rebalance the refines from drone loot to be more in line with the overall mineral demand (as an aggregate of what gets consumed during production) and the bulk of the problem is solved.

I like the direction that CCP and Dr. Eyjo are going with these analyses, but I think they need to always keep in mind that the EVE universe has some fundamental game-balance assumptions built in that make it behave drastically differently from a real-world free-market economy.

Nyphur
Pillowsoft
Posted - 2007.11.16 03:44:00 - [182]
 

Originally by: Aprudena Gist
What this tells us is that there aren't enough people mining veldspar and enough people mining other stuff.

The primary source of tritanium in eve is not veldspar. The primary source (the one from which most trit in eve comes) today is probably reprocessing shuttles, followed closely by refining loot from ratting/missions and then I would guess even hauler spawns across eve produce more than the veldspar that's mined daily does.

Don't get me wrong, I really REALLY want mining veldspar to be the best source of tritanium in eve but it isn't. I want to be forced to mine veldspar for a while out in 0.0, I want it to be the most economically viable way of filling my tritanium needs but right now it just plain isn't. It's not even close to viable, I can produce more trit per hour ratting than my mining alt can mine in a maxed out hulk. I can produce even more if you consider logistics. In that case my alt can mine bistot, export the highend minerals to empire and then import tritanium from empire.

Polemarchus
Posted - 2007.11.16 18:28:00 - [183]
 

Inflation: I don't think the odds of inflation are that high. Yes, there is a lot of liquid cash in the economy, but (at least in Empire where 78% of us are), it is very easy to comparison shop. This, combined with the fact that there is little need to be loyal to certain vendors, and the comparatively small number of variables in the manufacturing process, should keep price competition very stiff. Anyone who has tried to sell a common ship or mod in Jita knows this.

Wallets: I liked having the numbers on wallets (it's always fun to see how you stack up). These numbers are probably not very accurate for some of the more wealthy players in the game, though. Two other numbers would be great to have, but very difficult to produce: the value of personal assets, and the value of ISK and asset holdings in "personal" corporations. I suspect there are a number of players worth well over 100B ISK, if a true accounting were made.


DasNara Aethelwulf
Blackwater Syndicate
Ushra'Khan
Posted - 2007.11.17 03:11:00 - [184]
 

Dr. EyjoG,
just a thought that I had. With this new direction that EVE is taking in putting these reports together, I was wondering if you would be putting together a different kind of report that would show what kind of effects that warfare has in 0.0. For example, this week saw the absorbtion of Invictus territory into Roadkill and IRON territory. I know that this would take a lot of work, but did the market get effected in this area in positive or negative. This may be good information to arms makers. Just looking at the events of this week and thought of that...thank you for your hard work

Avon
Caldari
Versatech Co.
Raiden.
Posted - 2007.11.17 10:00:00 - [185]
 

Originally by: Polemarchus
Inflation: I don't think the odds of inflation are that high. Yes, there is a lot of liquid cash in the economy, but (at least in Empire where 78% of us are), it is very easy to comparison shop. This, combined with the fact that there is little need to be loyal to certain vendors, and the comparatively small number of variables in the manufacturing process, should keep price competition very stiff. Anyone who has tried to sell a common ship or mod in Jita knows this.


The problem is exactly that the prices aren't rising.
*If* the raw materials at the base of the manufacturing chain were obtainable only from player activities, then those prices would rise with the wealth baseline. Miners and other "harvesters" would not want to be left behind as the wealth of others increased, and so would increase the price of their goods in order to maintain parity.
This would bring the price inflation that Eve *should* be experiencing to mitigate the influx of ISK in to the economy.
However, the mineral market is not a free market. There is an absolute maximum mineral value that miners can charge, beyond which it is possible to refine unlimited supplies of NPC produced, fixed price, goods. This artificial price cap prevents price inflation (along with other factors), whilst doing nothing to tackle the inflationary pressure which should be exerting itself.
Arguing that, because there is little obvious price inflation, the economy is working shows a lack of understaning of the differences between Eve's market and a free market.

Kazuo Ishiguro
House of Marbles
Posted - 2007.11.17 18:28:00 - [186]
 

Originally by: CCP Dr.EyjoG
Originally by: Paddlefoot Aeon
A couple of things really jump out at me, having a background in Market research and the lighter side of statistics.

First, I believe the characters with less than 1 million SP should be considered outliers. So many people have alts that are in Jita, or for scouting, or simply out of the box market alts that sit on the same account as their main character (I'm guilty here, too).


I perfectly agree with you on this point. Our biggest problem was that we wanted to include new players in the numbers so our only option was to include all characters. We have also been thinking about reporting only account averages rather than character averages? What does the forum think about that?

Dr. EyjoG


Perhaps it would be better to only include characters with a skill in training at the time the snapshot was taken? That includes new players with low skillpoints but excludes most market/research alts

Varheg Xan
Gallente
The Scope
Posted - 2007.11.18 00:30:00 - [187]
 

This report is great, not only for the information it contains, but for the discussion generated. Thanks CCP, for making background material like this for Eve!

=VX=

Tripoli
XenTech
Posted - 2007.11.18 16:33:00 - [188]
 

358 skills? I think not. Show me the last 7. The following are shown in-game on the character sheet, but are not acquirable.

CFO Training
Diagnostics Interfaces
Duplicating
Genetic Engineering
Gunnery Interfaces
Hypernet Science
Mnemonics
Remote Interfaces
Reverse Engineering
DED Connections

If I had to venture a guess, I suspect your figure of 358 is derived by adding those 10 skills to the actual 351 that are possible, and subtracting Salvage Drone Operation, Mobile Factory Operation, and Mobile Refinery Operation.

185 more days and I'll have all 351. Cool

sxndy
Gallente
Spiritus Draconis
Posted - 2007.11.19 10:30:00 - [189]
 

One of my friends has killed over 200 isk farming haulers over the last few weeks, in his effort to keep inflation down for the good of the real community. What payment did he get? -9.8 sec status.

Come on, some of these figures are directly linked to the new wave of courier mission running isk farmers, some systems are jammed full of them. Surely these people are deflating the real life value of characters and isk. Wait 11 months and you’ll see thousands of 16m sp ex-farmer characters for sale on the forums with the isk received getting sold in the real world. Thus making isk cheap and characters worthless. Mark my words, we’re heading for catastrophe. [/end doom and gloom]

Well put together report. Very Happy

Ulrich Sternaxe
Posted - 2007.11.20 13:33:00 - [190]
 

Edited by: Ulrich Sternaxe on 20/11/2007 13:36:16
Originally by: Ishina Fel
Overall a very interesting read, especially the volume graphs on datacore and salvage production!


Exactly, that's what drew my attention too, in particular the volume graphs on ships and the detailed price graphs on basic minerals (where you can view the movement of individual mineraltypes like zydrine or mex). As a businessman I couldn't care less about how much ISK is in someone elses wallet or how much total ISK is in the game or how EVE is filled with sinks and faucets (which apparently some people here find fascinating to read about and discuss). But those volume graphs on particular products are really useful to any businessman out there, I hope in the next report they do some for mods, implants, tech II components, the various moon minerals (like they did in detail with the various basic minerals), etc. as well.

Quote:

(And seriously, people, the Nov 27/28 date for Trinity has been out since mid-September. You watch too little EVE-TV! ugh)


Then why hasn't it been mentioned anywhere on the forums? Why would EVE-TV viewers be favored with that kind of insider information and thus given an unfair advantage over other players? Because they pay for it with real money? Buying ISK with real money is bad enough, CCP shouldn't support players who are willing to use real money to gain an advantage over others by giving them extra information that others who don't want to spend extra money don't get.

But I guess it was unintentional, I certainly hope so.

I've been looking for that release date all over the forum, couldn't find it. Now I have less than a week to prepare.Sad

Cautet
Celestial Apocalypse
Posted - 2007.11.21 01:46:00 - [191]
 

Hey man, EVE-TV is free now - from like episode 13 onwards. Worth a watch.

Bartholomeus Crane
Gallente
The Crane Family
Posted - 2007.11.21 12:47:00 - [192]
 

I liked reading the economic newsletter a lot, however, I find I can't agree on some of the conclusions presented in it.

Others have presented the case for inflation a lot better than I probably can, so I'll leave it at that.

Instead I want to offer advice on two things I think will bring the EVE economy closer to a free market economy:

  1. Release fixed NPC prices and replace them with a demand driven heuristic. If, for example, everyone is buying shuttles to refine into Tritanium, the price of shuttles should rise. By doing so independently among NPC suppliers, regional arbitration would be introduced as well. Using a proper heuristic, the EVE economy can be made to approach a self-regulating free market economy.

  2. Remove NPC mineral faucets through missions by either removing minerals from them entirely, or replacing them with the 'fake' minerals. Currently it is more profitable to fail an 'insane industrialist' courier mission then it is to mine for the minerals this supplies. Minerals gained though refining loot from kill missions is a faucet less easy to stem, but it is hoped that with the new stronger, but less numerous, rats, at least the amount of minerals gained in this way is reduced.


In the end, I think it advisable that all minerals should be made available through player actions, predominantly by mining. Even the best heuristics are less capable to simulate a free market then players are.

James Duar
Merch Industrial
Goonswarm Federation
Posted - 2007.11.21 14:44:00 - [193]
 

Originally by: Bartholomeus Crane
In the end, I think it advisable that all minerals should be made available through player actions, predominantly by mining. Even the best heuristics are less capable to simulate a free market then players are.


While I agree with this notion, it requires serious changes to the current distribution of minerals in order to be effective. Essentially mineral parity would be needed - the rate at which one can mine mineral value (i.e. ISK value of minerals) would need to be equalized for all the different types, modified by security status (i.e. you can mine super-dense Veld in 0.0, but not high-sec).

Balancing this should be relatively easy - currently the approximate split is you need 4 times as much of a low-end as you do the high-end directly above it. Super-dense Veld would need to follow a similar pattern - whatever fraction of a ship's Mega you can mine out of Arkonor, an equivalent fraction of trit would need to be able to be mined from Super-dense Veld.

Doing this *should* preserve most existing economic structures of EVE, while moving supply purely to the players. This is a good thing - economics is complex, interfering as little as possible with each intervention is what we want.

Schani Kratnorr
x13
Raiden.
Posted - 2007.11.22 01:26:00 - [194]
 

Comprehensive, but not overly so. Good layout, easy to read. Good work, looking forward to the next one. It will be interesting to see how the various "benchmarks" change with time Very Happy

Seamus OReilly
Posted - 2007.11.28 20:42:00 - [195]
 

Edited by: Seamus OReilly on 28/11/2007 20:47:07
Interesting read. I'd really like to see some info on the price elasticity of demand for various items - how much is the extra performance of a T2 module really worth to people? And how sensitive volume is to price outside of Jita.

riprjak
Hermits Rest
Posted - 2007.11.28 21:20:00 - [196]
 

Originally by: CCP Dr.EyjoG
Originally by: Paddlefoot Aeon
A couple of things really jump out at me, having a background in Market research and the lighter side of statistics.

First, I believe the characters with less than 1 million SP should be considered outliers. So many people have alts that are in Jita, or for scouting, or simply out of the box market alts that sit on the same account as their main character (I'm guilty here, too).


I perfectly agree with you on this point. Our biggest problem was that we wanted to include new players in the numbers so our only option was to include all characters. We have also been thinking about reporting only account averages rather than character averages? What does the forum think about that?

Dr. EyjoG


Would it not be possible to determine outliers based on behavior? Surely the "normal" player would have a login/activity/logout (or just even time/duration of login) profile that is statistically normal and different yo that of the type of alt described; so we could take a distribution of players by "activity" and use this to weight the figures for skill points/wallet and report an adjusted result?

I'm sure that as time progresses measures will evolve and improve.

Damn good read otherwise, though.

It seems to me that if I look at this report from the point of view of a central banker; it is essentially observing that the economy is capacity constrained and there are inflationary pressures?? naturally the existence of an infinite supply of fixed price npc modules that are, essentially, just packaged minerals should act against any significant inflationary pressures for manufactured modules as they create an upper limit for T1 mineral prices... but I digress, in the presence of a constrained economy with inflationary pressures central bankers IRL will raise interest rates; what levers are available to you in eve to manage this?

err!
jak.


Lord Zugzwang
Posted - 2007.12.01 22:08:00 - [197]
 

Great Read.

The snap shot was taken on Oct. 19th which was a spawn day for mining (a Friday). So, the data may be a little off due to the game mechanics of the game, that most of the mining done in highsec is done on spawn days (Mondays and Fridays). Perhaps taking a snapshot of a full week would give a better picture. I would suspect, that several activities would become apparent as well, as freighters would be a higher number on Tuesdays/Saturdays.

With learning skills, 1 Million SP can be earned every 20 days. Most players coming out of the trial period should be approaching the 2M mark. Setting the standard above 1.5 or 2M would be a better indicator than including all players. This would remove alts and the trial accounts that never continued.

I would have to agree with others before that many of the Amarr pilots have crossed trained to Caldari ships and missiles. It takes less SP in missiles to be more effective than turrets for PvE.

Ari Chu
Posted - 2007.12.03 11:41:00 - [198]
 

As is probably appropriate for such a thread - I'll post with, what can only be described as, my alt.

One question which is asked in the Diary, "Why are so many experienced players in NPC Corps?" can probably be answered with three possibilities:

1) A player partakes in activites which could lead to a war dec, and they'd rather not deal with a war dec.

2) The player is able to meet their own personal objectives without having to interact with other players - and therefore chooses to just remain in the NPC Corp.

3) The player wishes to "reset" the character.... either to prepare for transferring to another player, or because they need a change of scenery and aren't sure where to go.



Zergelus
Posted - 2007.12.08 08:03:00 - [199]
 

Hello Doctor,

I'm puzzled about something. Figure 8 clearly shows an increase in money supply. Nevertheless, all price indexes show a clear downward trend. This of course doesn't make sense in real-life economics.
My hypothesis is that this is caused by the lack of a banking system. Once people's buying needs are met, their excess isk lies idle in their wallets, effectively being put out of circulation (zero velocity). Since money sitting in wallets have zero velocity, it cannot be counted as part of the economy.
As you know, in real life money saved in banks is immediately loaned, putting it back into circulation.
Are there plans of implementing a banking system in Eve?

Thank you

HarryManback
Minmatar
Exotic Dancers Club
Imorral Dragons
Posted - 2007.12.21 19:09:00 - [200]
 

Originally by: Kiera Algehn
Dr. EyjoG -

Excellent evaluation! I look forward to seeing more like this in the future.

One question: Figure 21 lists the price index comparison of Hyperions versus Dominixes in the Forge versus all regions. The red and purple lines are listed as Dominixes, whereas the blue and greens are Hyperions. Based on my industrial experience and the approximate levels of those lines, I'm assuming the index is in millions of isk. My question is this: are these two references reversed? I don't have my calculations at hand right now, but I could have sworn the Dominix hovered around 60m and the Hyperion around 90-100m. The chart, however, says the opposite?

Cheers!
- K


I was gonna say the same thing I was under the impression that the Hyperion was more expensive then the tier 1 Dominix.


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