Merchant Archive
Thread: Monopolies Can and Have existed ... a Case study.
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Hero_DarkJedi
Tue Aug 10, 2004 2:52 pm
#1
Greets ...
This post is a direct response to another thread that made the mistake of applying, one for one, "real life" principles to a game economy.
Case Study: Styker ... Eclipse Weaponsmith ... Monopoly exercising Monopoly powers.
Once upon a time there was a very decent fellow named Styker. He was a weaponsmith ... on eclipse ... he produced very good weapons ... He learned early on that the *secret* to weaponsmithing was "best of server" resources. He would contract for resources at very good rates and built relationships on the server with miners.
When he hit the "Credit Caps" he looked for a way to get around the credit caps. Hmm ... why not turn the excess credits into resources ... the resources would not only do away with credit caps, but would also appreciate in value as time goes on. Stryker reported his *best* sales day at 600million credits in a single day and averaged around 400million credits per day I believe.
He started to run "unlimited contracts" on the "best of server" resources at premium prices. This has 3 affects.
1) Most strip miners would give him exclusive contracts diverting the majority (monopoly) of best-of-server resources his direction.
2) Other weaponsmiths would have to offer more, and get less (as they did not have as much credits as styker).
3) He could always make the *best* quality weapons and handle the extreme volumen that built up.
Along the way, Styker lowered his prices drastically. This was an attempt, and succesful at that, to put a couple of other big name weaponsmiths out of business. The other weaponsmiths followed suit, or bettered him on prices, but their volume outstripped their resources and they ended up being forced to make inferior weapons ... and they ended up quitting due to this.
Styker was on the verge of starting a new distributor program that would have put 2-5 vendors for his products on every planet.
What allowed this to happen? Unlimited storage.
Did he succeed in his distributor program? The golden goose died. His entire inventory of resources ended up in his stockroom ... and sometime after 7 days they all went *poof*. CSR would not re-instate his inventory so he quit. (or is playing under another name).
In the "real world" something of this nature would not happen for many reasons, one of them being "storage" costs for resources ... another labor costs associated with the increasing of output 10x, 100x, 1000x, and many other factors ... but those 2 are critical.
Since there was "no real cost" for stoarge of either raw resources and "no real cost" aside from time for producing the increased demand, it broke normal monopoly restraints.
Strker had "monopoly powers" in both the resource market as well as the weapons market.
Monopolies have existed ... and can exist ... and will exists in the future if nothing is done about it.
Today? Now we have situations where there are small groups that indeed have "monopoly powers" on the servers. Doesn't mean they use those powers to the detrement of the community ... but the fact remains ... when a group of players controls 60% of the market, they are considered to have monopoly powers.
So ... there was one monopoly I had the priviledge to know about. Styker and myself were neighbors and he even invited me into his city ... I did not post this to bash him, he was a good guy. He played hard .. he played smart .. he played to win ... and he had and used his monopoloy powers.
Spouting text studies of real world supply/demand market forces don't necessarily apply to this 'virtual' world because some of them are "founded" on immutable truths which don't exist out here. Some truths do adhear, but many do not.
Aeja
Tue Aug 10, 2004 4:22 pm
#2
Well your right on some accounts I have the sorta the same problems on Flurry as a master AS Their are 3 big names on this server 1 was a guild mate untill he moved on, I mastered AS right after i joined the guild I had to compete with him for the hides mainly he could buy unlimited amounts me just starting couldnt do that so I bought some here and there making 5 or so suits at a time each time Id take the profits and buy more resources that I needed. point is I worked past this obstacle and although im not one of the big times yet Im selling about as fast as I can make them. All ya need to do is reduce the price a little i and I tailored to those whom cant pay 80K for a decent 12pnt AS items (chest plate) im a 10Pnter (45K chest plates). The bigest monopoly I cant break is the one where a certain person logs in and gets all the high end skill tapes I cant afford 15mill or so they are wanting. But its a free enterprise system I dont like that she does it BUT I can understand why she does it.
GenChaos
Tue Aug 10, 2004 4:28 pm
#3
You know, in the end there aren't that many resources you need to chase to be a good weaponsmith. I and a couple friends can easily supply myself with all the WS resources I need to last for a very long time. There is really no need for any guilded WS to require the assistance of any outside miners. All this proves is that no one on your server had the ability or motivation to compete against this guy.
jefdenbeffer
Tue Aug 10, 2004 5:24 pm
#5
Stryker also found a way to exploit krayt tissues (long since fixed now) making LOADS of krayted weapons
This was the biggest foundation of his wealth
Ciirybeccaskyr
Tue Aug 10, 2004 6:09 pm
#6
i can get 3mil of a spawn before i even have to think about contracting out aside form the one guy i work with on a regular basis. do you nkow how many guns 3mil of any of the resources will make? alot more then even a monoply would sell in 6 months on most servers. heck i made my first fortune on a stack of 40k of ilronium gas
Kershakk
Tue Aug 10, 2004 7:01 pm
#7
Firstly, I'd be hesistant to accept those 'reported figures'. 400 million credits a day average would mean he's either charging insanely high CPU or he's got about100 factories running every day. For me to pull off that kind of turnover I'd need to sell 8,000 units of my most expensive gun (the T21). However you stated he drove prices down, so we're looking at a volume of tens of thousands, and honestly I doubt that. If, as a followup poster stated his exploitation of serialess krayt tissues is the foundation of his wealth, then this sales figure has no relevance to a monopoly - and in fact weakens this argument as the only way to flex this monetary might was by cheating and his monopoly on exploitation is something he can keep.
Second, you speak as if 'strip miners' are a fixed quantity and the weaponsmith's only way to grab resources. Unless the strip miners had harvester fields that cover every inch of every planet and this Stryker guy had them all in his pocket?
Thirdly, if one weaponsmith was starting to play dirty, the other weaponsmiths can pool together to level the field. I sure as heck know if some stunt like that was going to be pulled I know a dozen weaponsmiths, all successful businesspeople, I could pull together and set up a direct competitor. These weaponsmiths would also have their own guildmates, multiple accounts, resource gathers they could call upon.
I'll grant you that monopolies can exist - but only if other people let it exist. I do not believe there is such a thing as an unbreakable monopoly in this game. This monopoly relied on wealth garnered from cheating (allegedly). And this is the one instance whichpossiblyrelied on exploitation thatyou're choosing to attempt to justify the screwing over of hundreds of honest, hard working crafters? Where's the logic to that?
The only true barrier to entry is crafter commitment. Resources can be gotten, skill tapes can be bought. Question is - how many people want to do that? Time and time again as I slave away on my business (and not to cackle about monopolising the economy but because I take pride in my busines reputation of having top notch stuff available at all times) my friends ask me what I'm doing .... of course, what do you think I'm doing? Got a backlog of custom orders. Need to do a run of Imperial Detonators. Need to find a density for that new Polonium. They tell me they could never, ever put that kind of commitment in.
I do. I am. And I would still. And so do other successful crafters. That is what seperates us from the new crafters who want to break in instantly and coin their own currency, and wonder why they aren't rolling in cash the moment they hit Master. It took me 5-6 months to start operating in the black, solely off my sales, and not once did I whine or complain about being shut out. And I came into it later than others, being in Australia, I had to wait a few weeks before getting my copy, so I was already behind the ball on resources. Heck, the best Ostrine ever to spawn I missed somply because it was before I had the capacity to gather it.
DirthNader
Tue Aug 10, 2004 7:13 pm
#8
So how is this a monopoly. Were the competing weaponsmiths themselves unable to mine resources? Did this "Stryker" chracter find a way to magically disable their lots? To prevent Nightsisters from dropping experimentation tapes? To somehow divert all weapon crafting xp earned by any player to his own character.
There is no monopoly. The means to a monopoly do not exist in SWG. Sure, someone can act as an impediment to a new player's goals, but no one can actually prevent said player from reaching them.
This "arguements", if you even give them enough credit to call them that, are already growing stale.
Avair
Wed Aug 11, 2004 7:41 am
#9
Since I am theposter whose 'mistake' was to apply economy theories to the game economy, I guess a rebuttalis in order. I'm going to assume for this rebuttal that his wealth was not created via illegal means (i.e. counterfitting).
The premise of your argument is as follows, as I understand it...
- Stryker was an example of a monopoly.
- The unfair government advantage (SWG game rule) used to create his monopoly was unlimited storage.
- Ergo, monopolies can and have existed in SWG
- Implied - A monopoly like his wasa bad thing for which 'something' needs to be done to prevent others from doing it to.
Unfortunately, I don't believe you have made your case. Here's why.
- Stryker was not a monopoly. You have applied the unfortunately too common collectivst tendancy in our society to label very successful smart businessman as a 'monopolist'. At no point want he the only weaponsmith on the server and he could not force everyone to buy from him. That is what a coercive monopoly is, one seller that everyone must go to.
- He had no unfair govermentadvatange. Unlimited storage is a tool every crafter has at his disposal, Stryker used it to become more profitable than his competitors. If only he had unlimited storage, that would create a coercive monopoly.
- There are two types of monopolys, Coercive - where competitors are legal or in practice barred from entry into a market by government rules. The monopoly can then charge any sky high price they want, as no competitor can undercut them. Non-coercive - Where only one seller exists because it isn't profitable for other competitors to enter the market. The seller cannot raise prices because competitors can then enter the market profitably. In SWG, the latter is possible to achieve in theory only, but in practice people will always want to craft, even if they are unprofitable. Even in your example, despite all his 'monopoly' power, he couldn't drive every crafter out of business. Hence no monopoly.
- Building a profitable and successful business (which he did) isn't a bad thing. First off, the traditional thing people worry about with monopolies isn't that they will make goods too cheap and too available, its that they will raise prices skyhigh and hurt customers. Making goods cheaper and more available, using more efficient and profitable means is what every single business does over the long run.
- Suppose for the sake of argument, Stryker had driven every single other smith out of business by selling at acheap price his competitors couldn't match (because they weren't efficient enough). No customer is harmed, as they got their guns cheaper. A non-coercive monopoly is established.
- With all other smiths out of business, what can stryker do? Nothing but keep charging the same low prices. He cannot raise prices significantly (which would cause harm to customers) because when he does other smiths can now profitablly enter the market.
None of the arguments you have laid out successfully refute my central premises which are...
- Coercive monopolies can't exist without government interface. No such advantage exists in SWG, so no coercive monoplies.
- SWG Non-coercive monopolies could in theory exist, but in practice would near impossible, and haven't existed yet. Furthermore, non-coercive monopolys can't raise prices so are not harmful to customers.
- SWG is (for the most part) a free market simulation and follows the rules of the a free market. The rules ofa capitialist system can't be suspended and will take care of their own problems (like 'breaking up' so calledmonopolies on thier own).
I get the nasty feeling that the designer had envisioned a quant little cottage industry economy, where everything would be really expensive and crafter would make stuff by hand in small numbers. Unfortunately for that cutesy distopian vision, the tools to build an industrial age economy were provided and smart capitalists have used them to build one. Stuffing the genie back in the bottle at this point is pure socialist controlled economy tinkering at its worst, and will drive away those capitalists (like myself) that enjoy the economic simulation aspect of the game.
Good debating to you sir!
VarnaxDespin
Wed Aug 11, 2004 8:45 am
#10
A monopoly is, ilke above state where the consumer has not other effective choice in where he buys or has not access to something because another controls its output.
You cannot control resource output in SWG, thus you cannot control/monopolize any crafters field.
The only form of limited or collective monopoly I see in this game are Loot monopolies, where a group of players control a specific spawn site (such as Alkay, Borglecaves w/ 3rd party loot marco etc...) '
But even these "monopolies" are mostly short lived as the parties concerned get bored of camping or spending their time doing nothing but waiting on loot to spawn.
Solitiri
Wed Aug 11, 2004 9:15 am
#11
The ones I see as monopolies are those who have several accounts with all the crafting classes plus the surveryor and mayor. There are several of these out there. There are also groups who get together and do the same thing.
I do not see a way to correct that issue with game mechanics. Not even a storage limit would correct that. Nor am I sure it should be corrected. If I were to make an analogy to the real world I would use Microsoft and Ma Bell as examples.
I do see that if, as I mentioned in Doc's proposal thread, if you have a way to list everyone's products that are for sale on one search key, the prices will have to be competitive. The little guy will have the same advantage for sales this way as the big guy. It would not eliminate attempts at monopolies but it would not penalize the small business owner either.
Sigrun
Wed Aug 11, 2004 9:50 am
#12
Solitiri wrote:
The ones I see as monopolies are those who have several accounts with all the crafting classes plus the surveryor and mayor. There are several of these out there. There are also groups who get together and do the same thing.
I do not see a way to correct that issue with game mechanics. Not even a storage limit would correct that. Nor am I sure it should be corrected. If I were to make an analogy to the real world I would use Microsoft and Ma Bell as examples.
I do see that if, as I mentioned in Doc's proposal thread, if you have a way to list everyone's products that are for sale on one search key, the prices will have to be competitive. The little guy will have the same advantage for sales this way as the big guy. It would not eliminate attempts at monopolies but it would not penalize the small business owner either.
Why are they a monopoly? What are they preventing you or a group of you and your friends from doing to compete against them?
Microsoft pWns the desktops. Period. If they choose to use that power to crush their competition and then increase their prices and give you an inferior product, THEN they'd be a monopoly (maybe they are, I'm not debating that). But those people in SWG aren't because they can't pWn EVERY resource spawn nor sell to EVERY character.
Enix_Dayspring
Wed Aug 11, 2004 10:11 am
#13
Hero_DarkJedi wrote:
Greets ...
This post is a direct response to another thread that made the mistake of applying, one for one, "real life" principles to a game economy.
Case Study: Styker ... Eclipse Weaponsmith ... Monopoly exercising Monopoly powers.
Once upon a time there was a very decent fellow named Styker. He was a weaponsmith ... on eclipse ... he produced very good weapons ... He learned early on that the *secret* to weaponsmithing was "best of server" resources. He would contract for resources at very good rates and built relationships on the server with miners.
When he hit the "Credit Caps" he looked for a way to get around the credit caps. Hmm ... why not turn the excess credits into resources ... the resources would not only do away with credit caps, but would also appreciate in value as time goes on. Stryker reported his *best* sales day at 600million credits in a single day and averaged around 400million credits per day I believe.
He started to run "unlimited contracts" on the "best of server" resources at premium prices. This has 3 affects.
1) Most strip miners would give him exclusive contracts diverting the majority (monopoly) of best-of-server resources his direction.
2) Other weaponsmiths would have to offer more, and get less (as they did not have as much credits as styker).
3) He could always make the *best* quality weapons and handle the extreme volumen that built up.
Along the way, Styker lowered his prices drastically. This was an attempt, and succesful at that, to put a couple of other big name weaponsmiths out of business. The other weaponsmiths followed suit, or bettered him on prices, but their volume outstripped their resources and they ended up being forced to make inferior weapons ... and they ended up quitting due to this.
Styker was on the verge of starting a new distributor program that would have put 2-5 vendors for his products on every planet.
What allowed this to happen? Unlimited storage.
Did he succeed in his distributor program? The golden goose died. His entire inventory of resources ended up in his stockroom ... and sometime after 7 days they all went *poof*. CSR would not re-instate his inventory so he quit. (or is playing under another name).
In the "real world" something of this nature would not happen for many reasons, one of them being "storage" costs for resources ... another labor costs associated with the increasing of output 10x, 100x, 1000x, and many other factors ... but those 2 are critical.
Since there was "no real cost" for stoarge of either raw resources and "no real cost" aside from time for producing the increased demand, it broke normal monopoly restraints.
Strker had "monopoly powers" in both the resource market as well as the weapons market.
Monopolies have existed ... and can exist ... and will exists in the future if nothing is done about it.
Today? Now we have situations where there are small groups that indeed have "monopoly powers" on the servers. Doesn't mean they use those powers to the detrement of the community ... but the fact remains ... when a group of players controls 60% of the market, they are considered to have monopoly powers.
So ... there was one monopoly I had the priviledge to know about. Styker and myself were neighbors and he even invited me into his city ... I did not post this to bash him, he was a good guy. He played hard .. he played smart .. he played to win ... and he had and used his monopoloy powers.
Spouting text studies of real world supply/demand market forces don't necessarily apply to this 'virtual' world because some of them are "founded" on immutable truths which don't exist out here. Some truths do adhear, but many do not.
Well this is an excellent case against unlimited storage on vendors, which very few actual crafters are insisting on.
It does not, however, make a case for the drastic limits opposed by the developers. If the cap was even 1000 items per vendor, Stryker wouldnt have been able to storeallhe bought.
The point is moot anyway. If there is a rich person that wants to start selling all his weapons for 1 credit, he can do it and theres no one that can stop him from doing it and chasing everyone else out of the business until he runs out of resources.
But as the above very intelligent poster said, this doesn't hurt customer at all. It just makes it so that new weaponsmiths will have a hard time making profit. But profit is not an inherent right in a crafting profession. The only thing you're promised when you master weaponsmith is that you can now craft elite carbines and t21s. Whether or not you can, or even want to, turn a profit is up to you.
I know several master smiths that do nothing but make newbie weapons to give away in Tyrena to new players and I know lots more who dont own a shop and just sell to guildmates.
But even if there is one person on the server that is selling best weapons on the server for low prices, players will still go to other smiths for various reasons. The same reasons I was able to sell total crap T21s and other weapons when I just started, even though there were several other smiths that sold much better weapons.
Message Edited by Enix_Dayspring on 08-11-2004 10:24 AM
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