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  • Repost: My solution to inflation and economy

    I posted this in the General Discussion thread talking about the 1.23 death of dailies thread, as well as in the dev log thread, but with multiple pages I don't think people saw or took the time to review my suggestions. I'm re-posting this here as a suggestion thread, possibly to keep FLS from totally driving away all of the playerbase or doing further damage to the economy.

    <repost>
    I can understand that the daily missions generate possibly too many dbs, but a reduction of more than 50% to me is a serious headache. Some players are using these missions as a way to fund the economy, so they can avoid the Auction House. I personally like the Auction House (when there's a market and players buying), but many players only do economy structures to provide for their society or themselves, and removing this source of income plus forcing them into the Auction House is extremely bad IMO.

    The inflation rate calculation, according to the figures given is not accurate, and doesn't really take into account the active trading between players that don't even involve the removal of doubloons.

    I also think that 90% of the regular missions (which get a minor increase in payout) are never done because they are levels far below where anyone would get a benefit from them.

    If it were me I would make the changes like this to fix the money/economy:
    • Daily missions would have their payout reduced, but not more than 50% (ie 17k missions still pay ~9-10k, 24k missions pay ~13-15k).
    • Collection quests (given by the junk dealer) should give an extremely good payout (5k-10k) as good as or similar to, a solo daily mission. Their payout has always been a cruel joke (of faction and a swashbuckling item) and "junk loot" is never actually collected but needs to be.
    • The drop amounts from all NPC ships should be increased to at least double in terms of dbs (level 30 ships only worth 200-300dbs? level 50s worth 500dbs? WTF?) and their item drops should be multiplied at least 700% (why would any level 40 trader only have 1 iron ingot? or a single log of wood? also- WTF?).
    • All solo mission payouts should have a multiplier based on "skill rating" (from Port captain) so if people do lower level missions, near an appropriate challenge level, they receive appropriate multipliers to rewards. (example: a level 17 mission I've never done as a lvl 50 can be done on "Admiral" challenge and gets 3x the reward -and BTW a 17 mission is very hard on Admiral at 50-)
    • The PvP mission (kill 10 captains) should be increased (from it's current 1k dbs), but an increase of 2500%? WTF? The payout for sinking 10 opposing players should be 10-15k NOT 25k. The titles thing I like, but with it including MoV trades to get it? Not likely to happen.
    • The commendation trade-in also should have a monetary option, and right now claiming ships is only really worthwhile to Pirates. A 1-to-1 trade of these commendations is stupid (it should be 2-to-1 for higher to lower and vice versa 2-to-1 lower to higher), and giving appropriate rewards is long overdue for these.
    • The change to payout for PvP kills I do agree with (it should be within 5-10 levels) but it also should be at least a worthwhile amount for the consumables or ammunition used.
    • Unrest reduction bundles (Garrison Cmdr and Rebel Agent) also should have a payout of approx 50% their actual cost in doubloons, because right now they are a total loss except in reducing or increasing unrest. I like that MoVs can now be traded for these, but I would think doubloons would be given for assistance moving unrest with any trade in from a real Magistrate.

    I totally don't understand the 20 MoV/MoT thing for "crates" of useless junk, and think that the real way to reduce Marks is by not rewarding them for ships that are 20 levels or more below, or when the odds are more than 3 ships vs 1.
    </repost>

    The main problem with trying to close an inflation gap, is getting it balanced, which is not what I think the changes equate to right now. Forcing people into daily missions, or grinding ships endlessly, is not going to be any better than forcing people into the Auction House. That's why both are important and the economy changes should reflect this balance and not wild swings one direction or another.

  • #2
    One (and only 1) bump from page 2..

    Hoping someone will /agree or at least comment on my suggestions.

    Comment


    • #3
      1) Eh. Don't care that much, but they need to be nerfed.
      2) Not sure. You can always just sell the junk dealers the loot.
      3) I'd rather see an increase in dropped cargo than dbs. But as I've said before, this will require an increase in ship capacity.
      4) I've always thought this should be the case - both for db and xp.
      5) It should be seriously increased. And I think your math is broken.
      6) I agree with being able to trade bundles of the low-level commendations for higher level ones, moreso than a db turn-in.
      7) Still get MoVs, right?
      8) I think letting creating/reducing contention be a db sink is fine. Just need increased db production within the economy itself. Perhaps a mission to fill orders for non-local goods at an inflated price when the port goes red?

      Comment


      • #4
        Inflation shouldn't be in the tittle, because there really isn't a whole lot of inflation in this game...

        Increased doubloons have only increased the transfer of goods, not so much a increase in the price of goods.

        Comment


        • #5
          Inflation does not exist in this game's economy. Take an economics class or read an economics book, hell even wikipedia would probably have all the information you need to see why this game can't have inflation. Inflation is based on consumer pricing. Consumer pricing in a real economy is heavily based on the cost of labor/production. Inflation can only exist in economies where production costs change with the cost of raw materials; i.e. real economies. Since we essentially have slaves that we don't have to feed, our production costs will never rise, therefore it will always be profitable to sell an item at any price over production cost. Anything price increase in this game is simply greed, and it cannot be 'fixed' through game changes.

          Comment


          • #6
            Originally posted by thedread View Post
            Inflation does not exist in this game's economy. Take an economics class or read an economics book, hell even wikipedia would probably have all the information you need to see why this game can't have inflation. Inflation is based on consumer pricing. Consumer pricing in a real economy is heavily based on the cost of labor/production. Inflation can only exist in economies where production costs change with the cost of raw materials; i.e. real economies. Since we essentially have slaves that we don't have to feed, our production costs will never rise, therefore it will always be profitable to sell an item at any price over production cost. Anything price increase in this game is simply greed, and it cannot be 'fixed' through game changes.
            Actually it's the Developer's Log that was claiming there was inflation in the game, and this was a response to their claim of inflation as a reason to nerf daily missions. I also named this thread "inflation" because I was directly responding to FLS and I state right in my post:
            The inflation rate calculation, according to the figures given is not accurate, and doesn't really take into account the active trading between players that don't even involve the removal of doubloons.
            I actually agree that inflation is almost non-existent in this game, and also that currently the only reason for increased prices in game is greed.

            Please spend a minute actually reading the suggestions and the validity of them, and not just flaming people for using terminology (incorrectly) used by others.

            Comment


            • #7
              Originally posted by taolurker View Post
              Actually it's the Developer's Log that was claiming there was inflation in the game, and this was a response to their claim of inflation as a reason to nerf daily missions.
              I know what the devs say. They are 100% wrong and ignorant on the subject. I don't feel the "problem" they try to claim exists actually does exist. The people that complain about inflation in this game are the very people causing it. I.E. the shipbuilder that complains about the price of a raw material, while the raw material seller is simply trying to afford the shipbuilder's ships. As long as shipbulders charge a 300% mark up on their ships raw materials will also have a 300% mark-up, weather there are dailies and insurance or not.

              Comment


              • #8
                Originally posted by thedread View Post
                Inflation does not exist in this game's economy. Take an economics class or read an economics book, hell even wikipedia would probably have all the information you need to see why this game can't have inflation. Inflation is based on consumer pricing. Consumer pricing in a real economy is heavily based on the cost of labor/production. Inflation can only exist in economies where production costs change with the cost of raw materials; i.e. real economies. Since we essentially have slaves that we don't have to feed, our production costs will never rise, therefore it will always be profitable to sell an item at any price over production cost. Anything price increase in this game is simply greed, and it cannot be 'fixed' through game changes.
                While I agree the Devs have wrongly equated excess of monetary supply with Inflation in the Devlog, I am not convinced by your own definition of inflation being caused only by supply side changes.

                In the past, in the days before Dailies, Insurance and the exploit of missions like Urgent Fury and Just One More Thing, there were very few doubloons circulating in the game, they were time-consuming to create (by doing normal missions or sinking NPCs - we didn't even have 8 x 50 fleets in those days, let alone 12 x 65s) so people were on the whole poor.
                Because of this, demand for goods was low (if you cannot even raise even the base cost of a new ship, you cannot hope to buy one) and as a result mark-ups were low and many or maybe most econ players were sitting on unused labour because they couldn't sell their output even with low mark-ups.

                In a few short months, UF and JOMT began to be exploited, FLS introduced Insurance and Dailies and money supply shot through the roof. Econ costs remained the same (so by your definition there could be no inflation), yet demand rose astronomically as people could now afford to pay not only the base cost of goods and plenty more on top. Unfortunately, not only did production costs not change, but neither did production labour, which now became the limiting factor in what could be made.

                Prices rose.
                I would call this inflation:
                Money supply rose -> demand for goods rose -> Previous slack in labour hours was taken up -> demand rose further -> Prices rose as goods could not be made at a faster rate.

                Eventually with 1.12, labour hours were doubled and we are at the happy point where supply just about matches demand. Labour is still probably the limiting factor, but both doubloons and hauling capacity also play a part.

                However, any dramatic change to money, labour or indeed hauling capacity could upset this balance and change prices again. Deflation, perhaps?

                Comment


                • #9
                  Originally posted by Remus View Post
                  Prices rose.
                  I would call this inflation:
                  Money supply rose -> demand for goods rose -> Previous slack in labour hours was taken up -> demand rose further -> Prices rose as goods could not be made at a faster rate.

                  Eventually with 1.12, labour hours were doubled and we are at the happy point where supply just about matches demand. Labour is still probably the limiting factor, but both doubloons and hauling capacity also play a part.

                  However, any dramatic change to money, labour or indeed hauling capacity could upset this balance and change prices again. Deflation, perhaps?
                  I'll agree there has been inflation in the past. But it is not at the levels the devlog paints it as. I'll also agree we are at the "happy point" where it sorta balances out, and people arn't struggeling to get by. Although I am very much hoping that the daily nerf forces people into cheaper boats.

                  Between March and December '09 I wasn't around much, but from what I remember back in March compared with December, prices have remained close/hardly noticeable.

                  Comment


                  • #10
                    Originally posted by Remus View Post
                    Prices rose.
                    I would call this inflation:
                    Money supply rose -> demand for goods rose -> Previous slack in labour hours was taken up -> demand rose further -> Prices rose as goods could not be made at a faster rate.
                    No, you're wrong. That is not inflation. Two weeks in a basic macroeconomics course would teach you that. That is increased demand with prices being set at equlibrium. What we are experiencing in this game is called a price floor. Since our setup is one where we cannot have inflation we have set production costs. The price for all goods is essentially locked into place. Price floors create a surplus. Surpluses make people get fed up and quit making stuff. There is no escaping this fact by the dev's. They can play with the money supply all they want and it will not fix the problem they have identified. Inflation is when your production costs rise to the point where you cannot make a profit at equilibrium price. It has nothing to do with surplus or how much money people have.

                    Here's an example of why this is not inflation: If I make limestone, it doesn't matter that the average price is 150 (or whatever it is now) I can make a profit selling it for 10 because the click cost will always be 6 per unit. If I sell 500,000 limestones at 4db profit per unit I will still make 2,000,000 db in profit. Inflation is when the click cost is 6, and the max price it can be sold for at market is less than or equal to 6; i.e. no profit from eq price.

                    Edit: When did prices rise? I've been playing for over two years now and as far as I can tell a Runner's rig has always floated between 10k-15k, a Cap MC has always been between 100k-200k. Even then the point is irrelevant. Just because prices go up doesn't mean someone else couldn't start making the same stuff and selling it for less for a profit. Judging by the fact that prices do always seem to go down again, I'd say exactly that is happening. IF limestone is some day sold for 10,000,000 db, someone else could start making limestone and make a profit on any price down to 6db per unit.
                    Last edited by thedread; 02-18-2010, 11:54 AM.

                    Comment


                    • #11
                      Originally posted by thedread View Post
                      Edit: When did prices rise? I've been playing for over two years now and as far as I can tell a Runner's rig has always floated between 10k-15k, a Cap MC has always been between 100k-200k. Even then the point is irrelevant. Just because prices go up doesn't mean someone else couldn't start making the same stuff and selling it for less for a profit. Judging by the fact that prices do always seem to go down again, I'd say exactly that is happening. IF limestone is some day sold for 10,000,000 db, someone else could start making limestone and make a profit on any price down to 6db per unit.
                      When doubloons became widely accessable. Runner's rigs were not around from the start. After insurance and dailies, even jomt i suppose there was an increase in the cost of goods on the market.

                      A fair example would be oak logs. Initially I could get them for 10db a log easily. Now its 15-25db.
                      Last edited by BigHead; 02-18-2010, 12:11 PM.

                      Comment


                      • #12
                        I guess this is what I'm getting at: YOu're not wrong that in a normal economy pumping money in without requiring productivity creates inflation. Where you get off track is by not considering how real economies work. The reason that "printing fake money" is bad in a real economy is because everyone, including the workers at the plants and the CEO that owns them has to spend that money to afford their life. In POTBS we don't. Our toons don't eat, pay rent, etc. All of those are costs that factor into consumer price index that is used to calculate inflation. Monetary inflation in a real economy creates excess demand for goods, so you're correct on that measure. What you're not considering is that demand creates a need to pay workers for longer hours, etc. Also, the workers have to buy those same goods in a real economy, therefore their pay rates are tied to the price of consumer goods, and ours are not.

                        Weather you believe in Keynesian (demand side) or Monetarist (supply side) economics, changes in CPI and thus inflation are always heavily based on the price of labor, which we don't have to worry about ever increasing.

                        Comment


                        • #13
                          Originally posted by BigHead View Post
                          When doubloons became widely accessable. Runner's rigs were not around from the start.

                          A fair example would be oak logs. Initially I could get them for 10db a log easily. Now its 15-25db.
                          Yes, as was stated before that is because demand for them has risen. However, I can start making oak logs today and make a profit on 10 db if I wanted to because labor cost cannot rise. If the devs somehow tied click costs to average AH prices you would be correct.

                          I didn't play from the start. I started about 6 months or so after release.

                          Comment


                          • #14
                            Originally posted by thedread View Post
                            Yes, as was stated before that is because demand for them has risen. However, I can start making oak logs today and make a profit on 10 db if I wanted to because labor cost cannot rise. If the devs somehow tied click costs to average AH prices you would be correct.

                            I didn't play from the start. I started about 6 months or so after release.
                            We'll you asked for an example of how/when prices rose in the last two years... That's a bottom tier one the effects the rest.

                            Edited cause I missed the bottom... Yea, 6 months on things were stabilizing. After release there was quite a doubloon shortage.
                            Last edited by BigHead; 02-18-2010, 12:16 PM.

                            Comment


                            • #15
                              Originally posted by BigHead View Post
                              We'll you asked for an example of how/when prices rose in the last two years... That's a bottom tier one the effects the rest.

                              Edited cause I missed the bottom... Yea, 6 months on things were stabilizing. After release there was quite a doubloon shortage.
                              But even with your example prices have certainly not been locked at 15-25 db. You can still find them for 10, just not as frequently. And as long as 10 remains above production cost, someone will always decide: "hey I'm sick of paying 25db per log, I can make them and make a killing off 10db per."

                              Now, if the devs would flag materials so they could only be traded once it would solve the problem, as I think what is happening is people with 10's of millions are buying out the entire stockpile on the AH and re-selling them at double the price.

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