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Laboratus
Gallente
Invicta.
Cry Havoc.
Posted - 2007.12.18 10:07:00 - [31]
 

Edited by: Laboratus on 18/12/2007 10:56:13
Ok, think about this.

All work produces value, increasing the amount of value in the system.
Production, mining, hauling etc etc etc are work that produce value to the system.
Now, at the same time more currency enters the system.

Now look at the statistics.
In that past year, prices of modules and ships have been in a consistant decline.
We have deflation. Why is this?

Contrary to public view the amount of value in the system increses faster than the amount of currency in it. Hence the deflation, instead of inflation.
The current insurance system keeps the rotation in the markets, keeping players working on producing value, instead of working faucets. This means we have a more consistant economy than any other MMO, as a secondary effect reducing inflation and making the market better to compete.
All loses create a need and combined with insurance money they create a demand. Increased demand on the other hand on the first step creates inflated prices, causing excess profits. On the second step excess profits create new competition that drives prices down. This is a feature of the markets in eve.
Usually, good markets for the producer are defined as markets that have high entry barriers and low exit barriers. This means that entering the markets is costly and high entry barriers means short time producers are unlikely to enter the market even when there is excess profit to be had, while low exit barriers mean it is easy to sell your invested assets meaining it is easy to liquidise assets and get out of the market during recession etc times when the market is not profitable...
Why markets in eve function as they do is due to the fact that you have to make significant investments to enter a market (buy bpos, t2 components, materials, create infrastructure etc) and at the same time selling that investment is difficult. You cannot place researched bpos on the market and t2 production equipment is usually so specialised most ppl prefer to buy their own from the npc vendors instead of buying them from location. Not to mention the logistics efforts required and their cost. Medium entry, high exit barrier.
This leads to a situation, where on times of high profits you have many producers entering the markets, but even in times of poor profitability you have very few market exits. This means prices continue to decline.

In the basics you are right, your numbers are flawles, however you fail to see the bigger picture and the implications of the facts on the whole system...

DanKills
Caldari
Silver Snake Enterprise
Systematic-Chaos
Posted - 2007.12.18 10:08:00 - [32]
 

Originally by: Thoran Karlien
Thankfully there are a few ways to drain Isk, too.
Clone costs, skill books, POS's, and BPO's coming to mind. So while there is more money getting in than getting out, at least a bit is going the other way, too.

I doubt, that one single player could actually buy up the whole market... don't have any numbers on it, but there is just too much of it. Smaller, isolated market can be controlled and are controlled by single players. But you really don't have to worry about some sinister plan to buying up the whole market.


I was thinking something more along the lines of 20 of the 100 richest players buying up...oh, for the sake of an example, every single battleship and all the minerals in empire. Maybe in 0.0, too, with a bit of pre-planning. I mean...yikes.

Thoran Karlien
Perkone
Posted - 2007.12.18 10:15:00 - [33]
 

Originally by: DanKills
I was thinking something more along the lines of 20 of the 100 richest players buying up...oh, for the sake of an example, every single battleship and all the minerals in empire. Maybe in 0.0, too, with a bit of pre-planning. I mean...yikes.


Market is PVP, too... so basicly yes, the top 100 or so richest people could buy up quite a lot. But the top 100 alliances could also do quite a lot if they'd work together. But they don't.

Abriana Overlord
Evolution
IT Alliance
Posted - 2007.12.18 12:20:00 - [34]
 

Edited by: Abriana Overlord on 18/12/2007 12:20:47
Originally by: Motivated Prophet
Originally by: Ari Chu
Look, I know that you guys are really looking for ways to introduce ISK sinks into the game - and that players losing ships is a way to take stuff out of the Economy..
[snip]
or no possible reason, beyond as ISK sinks

Your ship blowing up is an isk faucet, not an isk sink. Note the following scenario:

Joe had 91m isk. You have 100m isk. Total in game: 191m isk. Total change: +0m isk

Joe buys 90m isk worth of minerals and a BPC from other players, and spends 1m isk on factory fees in an NPC station. He produces a Raven.

Other players have 90m isk. You have 100m isk. Total in game: 190m isk. Total change: -1m isk

Joe sells you a Raven, paying 1m isk in market taxes.

Other players have 90m isk. You have 0 isk. Joe has 99m isk. Total in game: 189m isk. Total change: -2m isk

You get your Raven blown up. You get the default insurance payout of approximately 40m isk.

Other players have 90m isk. You have 40m isk. Joe has 99m isk. Total in game: 229m isk. Total change: +38m isk

I hope I've proven my point.

MP


you forget to mention where raven npc for a couple days and makes 200mil isk in bounties and has now earned more money than was initially spent (not including loot melts and sales.

or used it for agent whoring and made 200mil isk

bottom line people loose ships in game that is eve, just fly it better and improve piloting skills

vanBuskirk
Caldari
Posted - 2007.12.18 12:32:00 - [35]
 

Another newish, and significant, isk sink is the isk paid to agents for faction guns, launchers and ammo. All of which has a chance of disappearing when the ship that has them fitted is blown up.

7shining7one7
Posted - 2007.12.18 13:28:00 - [36]
 

*pops in* hmmm, this thread has high quality content, refreshing to see a ccp blabla post that belonged in features ideas and discussions forum deviate naturally into something worthwhile.

it's a most pleasant change, instead of the usual hellkitty whine and bickering.. *screeech*.. that people tend to gravitate towards.

proceed

Frug
Omega Wing
Snatch Victory
Posted - 2007.12.18 22:06:00 - [37]
 

Edited by: Frug on 18/12/2007 22:06:37

Originally by: Motivated Prophet

I probably know more about Eve fittings and pirate loot drops (to say nothing of the T1- and T2-building process) than you do. Hop off the horse and talk to me at ground level. Unless you'd prefer I make you look like a fool for misusing the term "named", of course.


Clearly. I was ignorant enough to think people would fit Ravens with mysterious modules that are not inventable. Me so dumb.

Originally by: Motivated Prophet

Your argument has some merit; for example, the loss of an Estamel-fit CNR would presumably lower the rate at which its owner could generate isk via bounties. However, that is clearly a derivative argument, and it doesn't address goods whose supply is sufficiently flexible to absorb yadda yadda...


Well it doesn't ignore details to prove a point.

Originally by: Motivated Prophet

At any rate, barring extreme cases, I think we can agree that there's a net isk injection inherent in the loss of a Raven. Certainly you wouldn't maintain that the loss of a T2-fit Raven is an isk sink, would you?


Yes, I am clearly agreeing with that. I can see why you think that I am agreeing with that. I have spent the past four posts explaining how I agree with that. Oh wait, no... No I haven't.

Allow me to present what must seem like an "extreme case" to you and see if you can stop mining to wrap your head around it. I'm a mission runner. I play eve for maybe 2 or 3 hours a day. On a good day I pull in about 15 to 30 million isk per hour. I pumped several hundred million into my ship and it's fittings. MY SHIP generates 15 to 30 million isk PER HOUR. NOT my character, not my charming wit. My ship. And its fittings. Do some math and figure out how long until the ship has paid itself off.
Now somehow my ship is destroyed. For the next approximately 5 hours I cannot generate isk. My negligable and (according to you) "derivative argument" blah blah blah that doesn't compensate for your hypothetical garbage fit raven with no named modules is gone. Not only is that at least 5 hours of no isk generation (how much isk is that econo whiz) it is also these mysteriously effective modules gone as well as a psychological deterrent from further mission grinding.

Oh but you're right, the net total must be a gain in isk. Because you quoted wikipedia.

Cpt Branko
Retired Pirate Club
Posted - 2007.12.18 22:49:00 - [38]
 

Originally by: DanKills
But a Raven (worth 100 million isk) and its modules (worth 50-500m isk) dissapearing completely from the game simply cannot be construed as "an isk faucet" by any intelligent human being. I continue to have an extremely strong (if now somewhat vague) conviction that you have, in fact, failed it hard.


But they are.

Let's imagine this situation:
There's 200M ISK in the game, two players and two Ravens. Raven 1 gets blown up. Now there's (assuming no insurance) 230M ISK (don't know how much ravens insure for).

This is obviously more money in-game, and therefore represents a ISK faucet, not a ISK sink as the OP is trying to say.

Also, there's less items in game as a side-effect of this.

Buying a ship does NOT sink ISK from the economy in any way: ISK merely changes hands between players.


Cpt Branko
Retired Pirate Club
Posted - 2007.12.18 22:51:00 - [39]
 

Edited by: Cpt Branko on 18/12/2007 22:52:03
Originally by: Frug
Not only is that at least 5 hours of no isk generation (how much isk is that econo whiz)


You really do need to fit ships faster, mate.

Furthermore, you're completely ignoring piracy, mining and all other ship uses which do not constitute a ISK faucet in themselves. Not everyone is a mission runner.

Frug
Omega Wing
Snatch Victory
Posted - 2007.12.19 00:04:00 - [40]
 

Edited by: Frug on 19/12/2007 00:07:18
Originally by: Cpt Branko
Edited by: Cpt Branko on 18/12/2007 22:52:03
Originally by: Frug
Not only is that at least 5 hours of no isk generation (how much isk is that econo whiz)


You really do need to fit ships faster, mate.

Furthermore, you're completely ignoring piracy, mining and all other ship uses which do not constitute a ISK faucet in themselves. Not everyone is a mission runner.



The discussion and examples were about a missioning raven. I'm ignoring them because they weren't what was being talked about in the OP and subsequent posts.

5 hours to completely replace a well set up mission running raven and go back to the missions and start running them is more than reasonable. You're not going to be pulling in decent isk if you just hop into some junk setup. You'll have to either go all the way to jita, or shop around a bunch to get the right modules. You'll have to pick up your surviving modules, go all the way shopping and back, and then still feel like plowing through missions after you just lost your investment. I'm talking about a good mission running ship here, one that pulls in the kind of isk I mentioned.

Chavu
Minmatar
GK inc.
Posted - 2007.12.19 00:47:00 - [41]
 

Originally by: Motivated Prophet
Originally by: Ari Chu
Look, I know that you guys are really looking for ways to introduce ISK sinks into the game - and that players losing ships is a way to take stuff out of the Economy..
[snip]
or no possible reason, beyond as ISK sinks

Your ship blowing up is an isk faucet, not an isk sink. Note the following scenario:

Joe had 91m isk. You have 100m isk. Total in game: 191m isk. Total change: +0m isk

Joe buys 90m isk worth of minerals and a BPC from other players, and spends 1m isk on factory fees in an NPC station. He produces a Raven.

Other players have 90m isk. You have 100m isk. Total in game: 190m isk. Total change: -1m isk

Joe sells you a Raven, paying 1m isk in market taxes.

Other players have 90m isk. You have 0 isk. Joe has 99m isk. Total in game: 189m isk. Total change: -2m isk

You get your Raven blown up. You get the default insurance payout of approximately 40m isk.

Other players have 90m isk. You have 40m isk. Joe has 99m isk. Total in game: 229m isk. Total change: +38m isk

I hope I've proven my point.

MP


Yikes, MP, you are a pretty smart guy in the market discussions forum, but what I quoted above you must have written out in haste. You added in 90M from "other players" right in the middle and didn't include it as +90M isk or include the raven as being 90M in isk assets.

Here's a better example:
Buy mins + bpc for Tempest, produce said Tempest for 90M. Pay 31.5M for plat insurance and fit 10M worth of mods. Get blown up, receive 109M for insurance payout and 50% of mods. -90M -31.5M -10M +109M + 5M(you get your own wreck back) = -17.5M isk.

Insurance makes it so that the isk sink is not really that bad and that manufacturing items doesn't take much isk out of the economy since you get a fat insurance payout. You may be able to find a ship that gives back money after plat insurance ( I think a Domi is close) but saying any BS blown up = ~40M isk into the system, you're going to have to explain that to me, especially in the days of rigs.

xttz
GoonWaffe
Goonswarm Federation
Posted - 2007.12.19 00:53:00 - [42]
 

Originally by: Frug
Now somehow my ship is destroyed. For the next approximately 5 hours I cannot generate isk.

You do realise that your entire arguement is based around this statement, and if it's refuted this nullifies your whole post? Here goes.

Why do you generate zero ISK for 5 hours after losing a ratting Raven? Does it take exactly 5 hours before a faction spawn appears with all the fittings you just lost? Does it take 5 hours to collect fittings from all over empire? Does it take 5 hours to charge back up to SUPER SAIYAN RATTING LEVEL TEN?

EVE generally uses risk/reward curve when the player economy sets prices based on rarity. Sinking 800m ISK into a faction ratting setup doesn't return four times the isk per hour as a 200m tech2-based setup. ISK is still entering the economy for those five hours, albeit at a slightly slower rate. Not that I can imagine many ratters who would bring ALL their networth into a single ship, lose it and then have zero funds to fall back on.

All of this is academic anyway because the rate at which a player rats after a ship loss is entirely down to the inidiual player themself and varies according to motivation, personal wealth, and if the bad guy is still hanging around to blow them up again. Whereas the isk faucet from insurance is constant, bringing guarunteed ISK into the economy on every (insured) ship loss resulting in a net inflation.

Crumplecorn
Gallente
Eve Cluster Explorations
Posted - 2007.12.19 01:13:00 - [43]
 

Edited by: Crumplecorn on 19/12/2007 01:17:37
Originally by: Chavu
Yikes, MP, you are a pretty smart guy in the market discussions forum, but what I quoted above you must have written out in haste. You added in 90M from "other players" right in the middle and didn't include it as +90M isk or include the raven as being 90M in isk assets.

Here's a better example:
Buy mins + bpc for Tempest, produce said Tempest for 90M. Pay 31.5M for plat insurance and fit 10M worth of mods. Get blown up, receive 109M for insurance payout and 50% of mods. -90M -31.5M -10M +109M + 5M(you get your own wreck back) = -17.5M isk.

Insurance makes it so that the isk sink is not really that bad and that manufacturing items doesn't take much isk out of the economy since you get a fat insurance payout. You may be able to find a ship that gives back money after plat insurance ( I think a Domi is close) but saying any BS blown up = ~40M isk into the system, you're going to have to explain that to me, especially in the days of rigs.
Mins + BPC : Money to other players (assuming player mineral sell order): 0M ISK added/removed
Insurance: 31.5M ISK removed
10M of mods: Again, assuming bought from players, 0 ISK added/removed
109M Insurance: 109M added
5M modules recovered: Irrelevant

Net: 77.5M added

Insurance, taken in isolation, and assuming the ship is always destroyed, is always a faucet as it removes less than it adds.


The common mistake is equating abstract value and ISKs.

SN3263827
GoonFleet
GoonSwarm
Posted - 2007.12.19 01:26:00 - [44]
 

Originally by: Chavu
especially in the days of rigs.
Rigs (at least T1) are neither an isk faucet nor an isk sink once the BPO for the rig has been bought.

Making them creates no isk, destroying them removes no isk.

Hannobaal
Gallente
Punic Corp.
Posted - 2007.12.19 01:43:00 - [45]
 

No ISK is EVER destroyed when ship blows up, regardless of what it is worth, what insurance is used, or what modules and rigs are lost.

It is not, nor can it possibly be, an ISK sink when ships are lost.

Frug
Omega Wing
Snatch Victory
Posted - 2007.12.19 07:30:00 - [46]
 

Originally by: xttz
Originally by: Frug
Now somehow my ship is destroyed. For the next approximately 5 hours I cannot generate isk.

You do realise that your entire arguement is based around this statement, and if it's refuted this nullifies your whole post? Here goes.

Why do you generate zero ISK for 5 hours after losing a ratting Raven? Does it take exactly 5 hours before a faction spawn appears with all the fittings you just lost? Does it take 5 hours to collect fittings from all over empire? Does it take 5 hours to charge back up to SUPER SAIYAN RATTING LEVEL TEN?

More such stuff



Take a missioner. Blow his ship up. See how long it takes for him to get a new one out and missioning. Calculate his isk over a given period of time containing said ship destruction.

Take a different missioner. Don't. Calculate his income over the same amount of time.

Put everything together. Add up the isk in this micro universe. Add all the industry you want, change only this variable.

I honestly can't see why you write so much about something so simple and obvious.

Motivated Prophet
Zerodot Schools
Posted - 2007.12.21 08:18:00 - [47]
 

Originally by: Chavu
Yikes, MP, you are a pretty smart guy in the market discussions forum

Gee, thanks! Very Happy

Originally by: Chavu
, but what I quoted above you must have written out in haste. You added in 90M from "other players" right in the middle and didn't include it as +90M isk or include the raven as being 90M in isk assets.

And then you had to go and screw it up. Evil or Very Mad

Originally by: Chavu
Here's a better example:
Buy mins + bpc for Tempest, produce said Tempest for 90M. Pay 31.5M for plat insurance and fit 10M worth of mods. Get blown up, receive 109M for insurance payout and 50% of mods. -90M -31.5M -10M +109M + 5M(you get your own wreck back) = -17.5M isk.

So close, yet so far from the targeted cigar.

Originally by: Chavu
but saying any BS blown up = ~40M isk into the system, you're going to have to explain that to me, especially in the days of rigs.

I already did explain it to you. Reread my explanation, and Crumplecorn's excellent response to your post. As far as rigs, as the Goon mentions, they're a non-factor (though he forgets NPC factory costs and sales and broker taxes).

Originally by: Frug
Originally by: xttz
Originally by: Frug
Now somehow my ship is destroyed. For the next approximately 5 hours I cannot generate isk.

You do realise that your entire arguement is based around this statement, and if it's refuted this nullifies your whole post? Here goes.

Why do you generate zero ISK for 5 hours after losing a ratting Raven? Does it take exactly 5 hours before a faction spawn appears with all the fittings you just lost? Does it take 5 hours to collect fittings from all over empire? Does it take 5 hours to charge back up to SUPER SAIYAN RATTING LEVEL TEN?

More such stuff



Take a missioner. Blow his ship up. See how long it takes for him to get a new one out and missioning. Calculate his isk over a given period of time containing said ship destruction.

Take a different missioner. Don't. Calculate his income over the same amount of time.

Put everything together. Add up the isk in this micro universe. Add all the industry you want, change only this variable.

I honestly can't see why you write so much about something so simple and obvious.

Using your numbers, then, 15m per hour missioning, and we'll say four hours to replace a ship and get back to missioning. I have absolutely no bloody clue how it can take you four hours to replace a ship, so five is right out.

Anyway, Raven base price (a.k.a. platinum instance payout) is 108,750,000 isk. Platinum insurance cost is 43,500,000 isk.

Total isk injection = 65,250,000. (108,750,000 - 43,500,000)

Four hours of missioning @ 15m per hour? 60,000,000 isk.

Net isk faucet.

And I'll still maintain that four hours is already pretty well at the edge of realism. The numbers, of course, get worse as you jump up BS tiers and ship classes; the loss of a capital ship on a Level 5 mission, especially given those missions' lack of bounties, is free isk city. But I digress.

MP

Gillian Delilah
Posted - 2007.12.21 10:16:00 - [48]
 

Lemme try and get this straight:

Insurance involves paying an amount of isk A which will return a larger amount of isk B in the event of a ship being destroyed. The isk paid A is lost completely (as it goes to an NPC); the isk returned B similarly comes from an NPC. If the insurance is paid out, there is a net gain B-A in the amount of isk in the system. If the insurance is not paid out, there is a net decrease -A in the amount of isk in the system.

For insurance to be balanced overall (to have a net increase of 0 isk) then the proportion of contracts which are not paid out (nnotpaid, ranging from 0 to 1) would have to be: nnotpaid * -A = npaid * (B-A). If nnotpaid * -A > npaid * (B-A) then there will be a net loss of isk. If nntopaid * -A < npaid * (B-A) then there will be a net gain of isk.

The loss of isk inherent in the destruction of a ship is not the same issue. As far as the insurance is concerned, provided a sufficiently high proportion of insurance payouts are claimed, there will be an injection of isk into the system. I believe that the amount of insurance paid out is well above this threshold, but don't know for sure.

So - as to the destruction of a ship. Destruction of a ship removes items from the game world, but not isk. A player whose ship is destroyed has the option of spending isk with NPCs, removing it from the game, to replace it or its fittings. If they do this, then in the broad context the destruction of the ship does incur a reduction in isk. If this reduction is greater than the benefit provided by the insurance payout, then there is a net reduction in isk and the destruction is indeed, seen as a whole, a sink for isk.

However if the player whose ship is destroyed replaces it with a ship and fittings created by players, then there is no removal of isk from the system, instead there is a net increase.

Essentially, I think it comes down to what proportion of players buy ships from NPCs and which buy ships from players. If everyone replaces destroyed ships and equipment from NPCs, there will be a net decrease in isk despite the increase from insurance; if they replace them from other players there will be a net increase in isk.

Or I could be totally wrong. It has been known.

Cpt Branko
Retired Pirate Club
Posted - 2007.12.21 11:21:00 - [49]
 

Originally by: Gillian Delilah

Essentially, I think it comes down to what proportion of players buy ships from NPCs and which buy ships from players. If everyone replaces destroyed ships and equipment from NPCs, there will be a net decrease in isk despite the increase from insurance; if they replace them from other players there will be a net increase in isk.

Or I could be totally wrong. It has been known.


NPCs sell ships other then shuttles / mining frigs?

Falkrich Swifthand
Caldari
eNinjas Incorporated
Posted - 2007.12.21 11:38:00 - [50]
 

Lets go full lifecycle shall we:
Two players have 150m ISK each. They are the only things in the whole universe.
300m ISK + 0 ISK in assets.
Player 1 is a Miner/Manufacturer and Player 2 is a really bad mission runner.
Player 1 mines 99m ISK worth of mins:
300m ISK + 99m ISK in assets.
Player 1 builds a ship. 1m in factory fees. -90m minerals, +100m ISK ship.
Player 1 builds various ship modules. 0.1m in factory fees. -9m minerals, +10m ISK modules.
298.9m ISK + 110m ISK in assets.
Player 1 puts ship up for sale at 100m ISK. It costs 1m tax.
Player 1 puts modules up for sale at 10m ISK. It costs 0.1m tax.
297.8m ISK + 110m ISK in assets.
Player 2 buys ship. Player 2 buys modules and fits them to ship. 110m ISK changes hands.
297.8m ISK + 110m ISK in assets.
Player 2 fully insures ship. Costs 30m ISK for 100m insurance.
267.8m ISK + 110m ISK in assets + 100m insurance.
Player 2 goes and gets himself blown up without killing anything.
Insurance pays 100m
367.8m ISK.
Final result: Player 1 has 257.8m ISK (up 107.8m). Player 2 has 110m ISK (down 40m). Net result is a 67.8m increase in ISK in the universe.

If he hadn't insured his ship, he would have been given 40m instead of 100m in insurance (-60m), but also wouldn't have spent 30m (+30m) giving a net increase of 37.8m ISK in the universe.

Essentially, mining = lots of assets in, manufacturing = small amount of money out, change in assets (increased value), selling = small amount of money out, movement of ISK and assets, getting blown up = assets out, and insurance = money in.

Theoretically therefore, insurance is a ISK faucet. You were getting blown up anyway, so you can't count the value of losing your ship and modules against insurance.
However, without mining, there would have been no ship in the first place. Mining introduced 99m worth of assets to the universe for free. It's just a pity that in this example universe the only way to trade those assets for ISK is to make them into a ship and get blown up in it.

Amarria Black
Clan Anthraxx
Posted - 2007.12.21 11:41:00 - [51]
 

Originally by: Falkrich Swifthand
Lets go full lifecycle shall we:
Two players have 150m ISK each. They are the only things in the whole universe.
300m ISK + 0 ISK in assets.
Player 1 is a Miner/Manufacturer and Player 2 is a really bad mission runner.
Player 1 mines 99m ISK worth of mins:
300m ISK + 99m ISK in assets.


And here's where your argument falls apart.

Mins have no intrinsic value in ISK. None. They have opportunity cost incurred by obtaining them, and an inherent value placed upon them by other players, but they carry no actual ISK value.

Falkrich Swifthand
Caldari
eNinjas Incorporated
Posted - 2007.12.21 14:45:00 - [52]
 

Edited by: Falkrich Swifthand on 21/12/2007 14:50:38
I'm not claiming the mins (or the ship or modules) have any intrinsic value. I'm giving them an effective value purely to make it easier to follow.

At the end, you might notice, there's nothing but pure ISK.

EDIT: Actually, all the mins do have a official value, take a look in the "Item Database" on the upper-left there. Tritanium is "baseprice ISK 2.00" per unit.

EDIT Some More: Using your same argument, items in real life don't have any intrinsic value either.

Xaen
Caldari
Aperture Harmonics
K162
Posted - 2007.12.21 14:50:00 - [53]
 

Word of warning. Constructive criticism is frowned on here.

There are endless lists of great ideas in Features and Ideas Discussion (lots of poorly thought out ones too). But even of the best ones, none are ever implemented.

You'll receive almost no support from the players, and by all accounts, CCP isn't listening anyway.

Cassius Longinus
Stimulus
Rote Kapelle
Posted - 2007.12.21 15:19:00 - [54]
 

I can't put my finger on what is annoying about people attempting to apply economic models to morpgee's. But it sure is there.

The OP said "take stuff out of the economy", which is true, and orthogonal to price discussions.


Angel DeMorphis
Gallente
Posted - 2007.12.21 15:59:00 - [55]
 

You guys use fancy words like "inflation" and "deflation" without understanding the meaning. If you understood the meaning, you'd use them differently. Let me explain:

Inflation. a persistent, substantial rise in the general level of prices related to an increase in the volume of money and resulting in the loss of value of currency

Inflation, therefore, requires two things. (A) a rise in the general level of prices (note, a rise in the price of a single item or a few items cannot be used as proof) and (B) an increase in the volume of money.

Assuming that insurance payout is an ISK faucet as some claim, for the sake of argument, and that there isn't an ISK sink to compensate (skill books, BPOs, POSes, etc), you then have (B) and increase in the volume of money in the economy. To prove inflation, however, you need to add (A) a rise in the general level of prices.

How much did a T1 Raven cost a year ago? (Actual question, as I was not here then.) I assume, from what I've read, that it was about 100 Mil? Today you can buy it for 100 Mil, or even down to the 87 (or was it 83?) Mil that I bought mine for. With the example of this single item you do not have (A) a rise in the general level of prices needed for inflation. As I said, a single item isn't enough for proof, but take a look at many other items to see more examples.

Note: Certain items should be excluded from this comparison. If the item you are looking at is vastly under-supplied, the rise in price is due to lack of supply, and not a devaluation of currency. For example, static plexes have been moved to exploration. If the items, such as faction mods, in these plexes have dropped in supply due to this move, their prices are obviously raised as a result of this and not of inflation.

The best items, in my mind, for this comparison, would be minerals (as a whole). Tritanium values have been increasing, true (though I hear this is mostly due to a reduction in supply). However, Megacyte, Zydrine, Nocxium, and Isogen have drastically reduced in prices. In fact, the proof in the drop in prices for mineral values as a whole is seen in insurance payouts, and the payout for 100% coverage most often exceeds the value (in minerals) of a ship at today's prices, and the insurance payout is based off of the value of the minerals in the database, set at some time in the past.

So, we don't have (A) a rise in the general level of prices, so we don't have A + B = C(inflation).

Motivated Prophet
Zerodot Schools
Posted - 2007.12.22 08:25:00 - [56]
 

Originally by: Angel DeMorphis
The best items, in my mind, for this comparison, would be minerals (as a whole). Tritanium values have been increasing, true (though I hear this is mostly due to a reduction in supply). However, Megacyte, Zydrine, Nocxium, and Isogen have drastically reduced in prices. In fact, the proof in the drop in prices for mineral values as a whole is seen in insurance payouts, and the payout for 100% coverage most often exceeds the value (in minerals) of a ship at today's prices, and the insurance payout is based off of the value of the minerals in the database, set at some time in the past.

So, we don't have (A) a rise in the general level of prices, so we don't have A + B = C(inflation).

This just in: if you ignore half the data, the other half clearly proves your point!

MP

Motivated Prophet
Zerodot Schools
Posted - 2007.12.22 08:28:00 - [57]
 

Originally by: Gillian Delilah
Lemme try and get this straight:

Insurance involves paying an amount of isk A which will return a larger amount of isk B in the event of a ship being destroyed. The isk paid A is lost completely (as it goes to an NPC); the isk returned B similarly comes from an NPC. If the insurance is paid out, there is a net gain B-A in the amount of isk in the system. If the insurance is not paid out, there is a net decrease -A in the amount of isk in the system.

For insurance to be balanced overall (to have a net increase of 0 isk) then the proportion of contracts which are not paid out (nnotpaid, ranging from 0 to 1) would have to be: nnotpaid * -A = npaid * (B-A). If nnotpaid * -A > npaid * (B-A) then there will be a net loss of isk. If nntopaid * -A < npaid * (B-A) then there will be a net gain of isk.

The loss of isk inherent in the destruction of a ship is not the same issue. As far as the insurance is concerned, provided a sufficiently high proportion of insurance payouts are claimed, there will be an injection of isk into the system. I believe that the amount of insurance paid out is well above this threshold, but don't know for sure.

So - as to the destruction of a ship. Destruction of a ship removes items from the game world, but not isk. A player whose ship is destroyed has the option of spending isk with NPCs, removing it from the game, to replace it or its fittings. If they do this, then in the broad context the destruction of the ship does incur a reduction in isk. If this reduction is greater than the benefit provided by the insurance payout, then there is a net reduction in isk and the destruction is indeed, seen as a whole, a sink for isk.

However if the player whose ship is destroyed replaces it with a ship and fittings created by players, then there is no removal of isk from the system, instead there is a net increase.

Essentially, I think it comes down to what proportion of players buy ships from NPCs and which buy ships from players. If everyone replaces destroyed ships and equipment from NPCs, there will be a net decrease in isk despite the increase from insurance; if they replace them from other players there will be a net increase in isk.

Or I could be totally wrong. It has been known.

Almost no ships or modules are built by NPC's; the exceptions are things like T1 mining frigates, which are meaningless on the scale we're talking about here. You also forget basic insurance (40% payout), which you get even if you didn't pay for insurance. The number of insurance contracts allowed to expire is certainly extant, but doubtless very, very low. I've love to see the good Doctor give us hard numbers on this in an econ dev blog.

MP

Apocryphai
Caldari
State Protectorate
Posted - 2007.12.22 08:36:00 - [58]
 

Edited by: Apocryphai on 22/12/2007 08:38:03
Hang on if all that you say is correct MP, then EVE would be suffering from inflation, yes? I.e. prices of things increasing.

But they aren't. EVE's economy ISN'T inflationary. In fact as far as I can tell most items, especially manufactured items have slowly decreased in price over the 4 years I've been playing.

Tech 2 decreases are obviously due to the breaking of the T2 BPO monopoly by invention. But T1 prices also have not increased. If your scenario held true then surely we'd have had noticable inflation over 4 years? And we're not talking about a few % either, ravens would cost half a billion, kestrels would be 10 million, etc. And they're not. The profit margins on tech 1 are very, very low, prices really can't go much lower.

There is zero inflationary pressure that I can see.

So why is that the case? Personally I think that the effect of insurance is constantly overstated, particularly by market-player types.

My personal experience is that full insurance doesn't make me money. When I lose a ship, especially a large/expensive ship (think battleships, command ships, HACs, which are the ships I lose most often) it always works out as a net loss to me. The cost of replacing fittings and rigs, re-insuring the ship and lost time (if it's a mission ship) are significant. If that wasn't the case then losing a ship wouldn't bother me, but it does!

I've heard the arguments being made in this thread over and over again. I'm still waiting for the huge inflation that they always threaten. It's now 4 years since I started my first character and there's still no sign of it.

Quick edit: 90% of my insurance contracts expire. That's always been the case after about my first month of playing. And I regularly lose ships in pvp. Still, the vast majority of my contracts expire. I can't speak for anyone else, but you saying that you think very few expire is just as much wild speculation as me trying to claim that 90% of all of them expire.

Pudgy McFudge
Posted - 2007.12.22 10:17:00 - [59]
 

Don't blame the green light when it's you who sucks.

BobsBrother
Posted - 2007.12.22 11:15:00 - [60]
 

Seeing as this all started off about blinky green lights and how you could not see them, just change the setting in display option to wide screen this creats a black band above and below the main image and you can see all the blinky lights you want then.


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