Business And Economy Archive
Thread: Economy is not broken: Example
Cafa wrote:
Pawlin wrote:
Tumbler2002 wrote:
...This is the problem. Sellers have stuff to sell and buyers have no way to find it easily. ...
This can definitely be a problem. SOE is trying to address it with the galaxy wide vendor search system. That should make it a LOT easier for buyers and sellers to connect.
Until the price gougers burn out the crafting community that actually tries to participate in the galaxy wide search.
I'll take the hit if it doesn't bloom, but I seriously predict the removal of small crafters in the game. They'll try for about 2 months and give up because they'll see that it is a no-win situation since the only manner of sales they are allowed to have (at least in their mind) are controlled purchases from friends as some gouger is going to try and corner the market.
Wanna make me believe it's fair? Since I am FORCED to have public vendors, since I am FORCED to front the money for any consignment siutation, since I am FORCED to make verbal contracts not worth their salt, since I am FORCED to accept fraud both in the game and on the forums with no recourse, and since I am FORCED to give up my property rights at the drop of someone making a false accusation to a CSR, make it impossible for someone to buy from a particular vendor more than once a month.
Fivo Asia
Gougers cant corner the market.the most basic Econ understanding will tell you that if prices are above equilibrium then loweer priced competitors will take market share forcing the "gougers" either to Sell nothing or lower prices
I"m really not sure if there are people out there capable of cornering a market or single handedly ruining an economy AND who have an interest in doing so.
To be able to impact your economy on a server wide basis you'll have to be pretty successful, wealthy, etc. To be successful and wealthy you have to have a certain amount of business smarts and smarts in general. Ifyou've got some smarts then you're not likely to ruin the market for your own goods.
So my hunch is: If someone is capable of ruining an economy then they are not likely to want to do it.
I just don't know anyone both capable and willing to do such a thing. I'm sure there are some people out there, but I think they are very few and far between if they even exist.
I think there are a number people whothink they can run an economy but they aren't big enough to do so. These are the deep undercutters or deep gougers who only have 15M in the bank after a year.
There are big people (e.g. Cafa) who could really single handedly impact an economy but they wouldn't be intrested in doing so cause they see the negative impact it would have and arent' intrested in 'crushing the competition' or whatever.
Cafa wrote:
Ciirybeccaskyr wrote:
Gougers cant corner the market.the most basic Econ understanding will tell you that if prices are above equilibrium then loweer priced competitors will take market share forcing the "gougers" either to Sell nothing or lower prices
I have 92 million units of duralloy stored. I have over 400 million units of med resources stored. I could easily burn the entire architect and meds markets if I cared to do so. I am not alone on Tempest as far as large resource vaults. In practice with things acutally costing earned dollars (in the real world) you are correct. In a virtual world where I can make a million credits a day in space shooting bad guys, you are not.
Those of us that understand credit acquisition in the game will never be "hurt" by any of this. Believe it or not, some of us don't want to be the only ones left standing and we enjoy a large, robust economy on the server.
Fivo Asia
Fivo,
I'm failing to see your point...is it to 'gloat' that you have 500 static harvesters running? or are you just emphasing your lack of understanding about 'price gouging'?
I agree, gougers cannot corner the market. the concept is ridiculous and SSA backwards.
Cafa wrote:
Ciirybeccaskyr wrote:
Gougers cant corner the market.the most basic Econ understanding will tell you that if prices are above equilibrium then loweer priced competitors will take market share forcing the "gougers" either to Sell nothing or lower prices
I have 92 million units of duralloy stored. I have over 400 million units of med resources stored. I could easily burn the entire architect and meds markets if I cared to do so. I am not alone on Tempest as far as large resource vaults. In practice with things acutally costing earned dollars (in the real world) you are correct. In a virtual world where I can make a million credits a day in space shooting bad guys, you are not.
Those of us that understand credit acquisition in the game will never be "hurt" by any of this. Believe it or not, some of us don't want to be the only ones left standing and we enjoy a large, robust economy on the server.
Fivo Asia
Pawlin wrote:
I"m really not sure if there are people out there capable of cornering a market or single handedly ruining an economy AND who have an interest in doing so.
To be able to impact your economy on a server wide basis you'll have to be pretty successful, wealthy, etc. To be successful and wealthy you have to have a certain amount of business smarts and smarts in general. Ifyou've got some smarts then you're not likely to ruin the market for your own goods.
So my hunch is: If someone is capable of ruining an economy then they are not likely to want to do it.
I just don't know anyone both capable and willing to do such a thing. I'm sure there are some people out there, but I think they are very few and far between if they even exist.
I think there are a number people whothink they can run an economy but they aren't big enough to do so. These are the deep undercutters or deep gougers who only have 15M in the bank after a year.
There are big people (e.g. Cafa) who could really single handedly impact an economy but they wouldn't be intrested in doing so cause they see the negative impact it would have and arent' intrested in 'crushing the competition' or whatever.
Believe it or not, folks, my comments have nothing to do with gloating so park it at the door. The fact that you cannot envision someone caring about other players and attribute your own insecurity to someone's comments about potential problems never ceases to amaze me.
Pawlin here, is correct, but I have seen the markets effectively controlled on Bria, Valcyn and Naritus AT ONE TIME from a group that wished to do so in various markets. Quite frankly, I quit Bria over the large weapons floods at prices too minimal to deal with. On Valcyn the market for DE and Architect goods went into a spin and after 2 months of people basically dumping on the market at prices below resource costs I left that too. I seem to remember a big problem on Naritus, too, but it was a while back.
The comments about people not sustaining these burnouts are reallypointed to me. There is nothing in the game that someone could do to ruin my play from an economic viewpoint. I have my base of familiarity, a wholely potential society within my guild capable of providing anything, and our core group of 60 or so players which all have worked hard to build an experience we enjoy logging in every night to play together. Very soon now I will achieve padawan with all my main toons. I'm pretty happy.
Call me crazy, but I see beyond my personal needs/wants and think about the past, what happened, and don't want to see it ruin the play of others. The makeup of Tempest has been unique in that most of the major economic powers understand/practice growth of inclusion, and other various means of sustaining an economy.
I simply say it is possible, and handing tools to people to do it more effectively vice making the profession SOE created to handle sales ingame more effective really baffles me.
Fivo Asia
Cafa wrote:
...
Pawlin here, is correct, but I have seen the markets effectively controlled on Bria, Valcyn and Naritus AT ONE TIME from a group that wished to do so in various markets. Quite frankly, I quit Bria over the large weapons floods at prices too minimal to deal with. On Valcyn the market for DE and Architect goods went into a spin and after 2 months of people basically dumping on the market at prices below resource costs I left that too. I seem to remember a big problem on Naritus, too, but it was a while back.
Ah ok. I hadn't seen it actually happen yet myself. I've seen people TRY to control a market more than once on my server but always failed. And the undercutters have never lasted long.
But that has just been my experience.
...
Call me crazy, but I see beyond my personal needs/wants and think about the past, what happened, and don't want to see it ruin the play of others. The makeup of Tempest has been unique in that most of the major economic powers understand/practice growth of inclusion, and other various means of sustaining an economy.
I think that is the case fairly often really. Like I said most people able to hit the level of success are not the types to want to ruin things for everyone. They have more at stake in the game then simply wanting a bigger bank account than they already have.
I simply say it is possible, and handing tools to people to do it more effectively vice making the profession SOE created to handle sales ingame more effective really baffles me.
They may see that as a possibility and be willing to take the risk or assuming its not likely.
They definitely do seem to think that galaxy wide search will be a benefit to most. One DEV has stated publicly that he thinks lower prices in the game would be good.
But ya it ishard to know what SOE is thinking. I can try an play devils advocate all day long (I often do) but still sometimes can't fathom what SOE is thinking.
Pawlin wrote:
I"m really not sure if there are people out there capable of cornering a market or single handedly ruining an economy AND who have an interest in doing so.
To be able to impact your economy on a server wide basis you'll have to be pretty successful, wealthy, etc. To be successful and wealthy you have to have a certain amount of business smarts and smarts in general. Ifyou've got some smarts then you're not likely to ruin the market for your own goods.
So my hunch is: If someone is capable of ruining an economy then they are not likely to want to do it.
I just don't know anyone both capable and willing to do such a thing. I'm sure there are some people out there, but I think they are very few and far between if they even exist.
This is interesting, Pawlin...
I agree completely with your premise that the people who are capable of cornering a market are also those least likely to be interested in ruining that market.
However, I'm not sure that it is accurate to conflate domination of a market area with ruining the viability of that market area. Let me try to explain what I mean:
The architect market on Valcyn is probably pretty close to what I take you to mean by "ruined" -- it is dominated almost entirely by one crafter, and prices are uniform at roughly 3.5-4 cpu. At that level, profits come from volume, rather than high margins... But it is still a profitable business.
On the other hand, in the crafting professions with which I'm more familiar (doc, chef, armorsmith), cpu prices are much much higher. Going rate on my server for a good Stim B is 20+ cpu, chef products are in the 30-40 cpu range by and large, and armorsmiths get 50+ cpu for high end products.
These prices have been kept high, of course,by the finite supply of high quality resources, and the cost of acquiring such. However, it is absolutely the case that a well-managed business in this game sees a continual decrease in per-product costs, as resources acquired in-shift replace those bought out-of-shift. As Beyowulf has demonstrated beautifully, it is absolutely possible to sell quality doctor products -- at a profit -- for closer to 10 cpu than 20. However, that possibility only exists because of the huge proportion of resources that he can either mine himself or buy for 3 cpu while they're in-shift...
I see it myself on Valcyn as well -- prices that, within my current cost structure, seem to be artificially high, are still lower than the *cost* of many of my competitors (and I know this because they tell me...).
And this is the disconnect, I think. If I set my prices in a mannerthat would maximize myeconomic gain(i.e.one which would move as many units aspossible while still maximizing per-unit profit), without regard for my competitors, then (due to the lower costs involved for me) they would have a very difficult time competing.
But, it wouldn't necessarily "ruin" the market -- it would rather limit market entry to only those who have been around long enough to harvest their own materials...
Anyway, I hope that's reasonably clear. I do certainly feel that there is a gap between flooding the market (or "dumping"), and the current price structure (which has as much to do with history as it does with the factors that directly relate to pricing), and that it isn't the case that someone undercutting the current structure by even 50% is necessarily harming their own economic interest.
And, ultimately, that's why all of the recent changes worry me so much -- I can see a clear path to something close to 100% market share, and I can see a host of possible motivations for trying to achieve it (as, after all, if a crafter comes along and lowers prices in an entire field by a significant percentage, that crafter is only going to alienate other crafters -- not consumers... They'll be thrilled...). I could imagine being unemployed and interested in ebaying credits, I could imagine wanting to make my guild an economic superpower, and so forth.
I share your hope that it won't happen, but I'm afraid that I do not share your optimism.
Ledao wrote:
...The architect market on Valcyn is probably pretty close to what I take you to mean by "ruined" -- it is dominated almost entirely by one crafter, and prices are uniform at roughly 3.5-4 cpu. At that level, profits come from volume, rather than high margins... But it is still a profitable business.
On the other hand, in the crafting professions with which I'm more familiar (doc, chef, armorsmith), cpu prices are much much higher. Going rate on my server for a good Stim B is 20+ cpu, chef products are in the 30-40 cpu range by and large, and armorsmiths get 50+ cpu for high end products.
...
I know its a tangent but...
Believe it or not, folks, my comments have nothing to do with gloating so park it at the door. The fact that you cannot envision someone caring about other players and attribute your own insecurity to someone's comments about potential problems never ceases to amaze me.
Pawlin here, is correct, but I have seen the markets effectively controlled on Bria, Valcyn and Naritus AT ONE TIME from a group that wished to do so in various markets. Quite frankly, I quit Bria over the large weapons floods at prices too minimal to deal with. On Valcyn the market for DE and Architect goods went into a spin and after 2 months of people basically dumping on the market at prices below resource costs I left that too. I seem to remember a big problem on Naritus, too, but it was a while back.
The comments about people not sustaining these burnouts are reallypointed to me. There is nothing in the game that someone could do to ruin my play from an economic viewpoint. I have my base of familiarity, a wholely potential society within my guild capable of providing anything, and our core group of 60 or so players which all have worked hard to build an experience we enjoy logging in every night to play together. Very soon now I will achieve padawan with all my main toons. I'm pretty happy.
Call me crazy, but I see beyond my personal needs/wants and think about the past, what happened, and don't want to see it ruin the play of others. The makeup of Tempest has been unique in that most of the major economic powers understand/practice growth of inclusion, and other various means of sustaining an economy.
I simply say it is possible, and handing tools to people to do it more effectively vice making the profession SOE created to handle sales ingame more effective really baffles me.
Fivo Asia
Message Edited by Ciirybeccaskyr on 03-23-2005 08:51 AM
Ciirybeccaskyr wrote:
Seems to me that "someone careing about other players" (usualy a drivel from the crafters a reuining us mindset by charging TOO much) has been adopted by you to try to support that crafters are undercharging.
Im sorry but you need to understand at least a little about how real world economics really works first before making these statements cause they are unsuportable. If people where charging too little to compensate them for there time they would quit there business and if they start charging too much competitors will come in and take over there market share.
Now keep in mind this only happens outside some given range of prices due to the "sticky price" condition discussed earlier
Maybe i am wrong but i keep reading "The economy is Shot cause i cant make money" or the "poor poor nooblets argument" and neither of these hold water. From nothing to 10 mil took me less than 3 weeks ,along with speed cpaping swordsman and getting acklay swords and bats, when i decided to test out the poor nooblets theory and I have gone from rich to poor too many times to count on my home server in NEW business. That is a new crafter was able to take on the big bad price gouging (lol since we are talking about low prices) established market.
The economy is the one thing in this game that is working dispite its limitations and lack of a trye financial system as we think about it in RL. This lack DOES make the bank acounts of the rich equivilent money sinks to the US$ demoninated US goverment debts held by forign country reserves. These both take money out of circulation with no real posibility of reintroduction.
Message Edited by Ciirybeccaskyr on 03-23-2005 08:51 AM
The economy works because people have financial incentive to explore crafting in the game. The size of my bank account means nothing compared to what I do with that money. But your example explicitly describes why this game economy cannot reflect a RL example. RL Money, in any form, does not just sit in a bank. It is always working. SWG money is fully capable of being removed from the game by player choice with no real consequences.
Fivo Asia
Ciirybeccaskyr wrote:
im not saying you dont have a few good points or i would have never bothered to respond to you. However you are missing the most fundimental part of this discussion. There is and always will be a trade off in this game, just as in real life, in time spent to make credits. If a person charges too little they will not spend much time doing it cause the reward isnt there.
This is very simply why we will not have large scale long term attempts to control the martet through charging too little. There will always be people that feel the need to help others by "undercutting the market" but since these people get less reward for there large scale work then they do for there individual sales this will not cause as far as i have seen in watching SWG economy fora while now or knowing alittle about people.
Ledao wrote:
Ciirybeccaskyr wrote:
im not saying you dont have a few good points or i would have never bothered to respond to you. However you are missing the most fundimental part of this discussion. There is and always will be a trade off in this game, just as in real life, in time spent to make credits. If a person charges too little they will not spend much time doing it cause the reward isnt there.
This is very simply why we will not have large scale long term attempts to control the martet through charging too little. There will always be people that feel the need to help others by "undercutting the market" but since these people get less reward for there large scale work then they do for there individual sales this will not cause as far as i have seen in watching SWG economy fora while now or knowing alittle about people.
The problem with this analysis is that the relationship between time spent and credits earned is not at all linear (or even direct, at least for crafters).
For me, it takes no more time andeffort to make 1000 stim Bs than 100. Or 1000 state packs instead of 100. And so forth. The time investments in crafting, by and large, have nothing to do with actual production (they have rather to do with resource acquisition and vendor maintenance). Although grinding out a 12-point amazing schematic can take a little while, as a general rule the actual crafting is the least time-consuming thing that a crafter does.
And the same is true for all of the professions that aren't dominated by loot.
I haven't crafted a thing since the resource kits came out, and my vendors still have hundreds of items on them... So, again, I'm back to feeling that if I had continued production, I would be forced to lower my prices significantly to try to keep stock from piling up on me...
Message Edited by Cafa on 03-23-2005 11:09 AM