Lol, no it’s about bounty grinders not seeing their activities having as much impact as it could due to unnecessary isk inflation.
Not a stealth PLEX thread. I wouldn’t be good at hiding it if it was.
Nobody said the money supply is not increasing. But the question is, is it increasing enough to cause inflation and the answer appears to be, at best, ambiguous. And your use of PLEX only underscores your lack of understanding. Over the years PLEX have been given a larger number of functions. Want to train 2 characters on a single account? Use PLEX. Want to transfer a character? Use PLEX. Now they have even changed PLEX to replace Aurum. Each of these would shift the demand curve to the right (outwards)–i.e. the demand for PLEX is greater for all price levels. Unless there is a similar shift in the supply of PLEX the price has to go up. We can see this with the extended periods of relative price stability in PLEX prices between the periods when PLEX are made more useful.
My point is you should consider not only that which is seen, but that which is not seen. We see the ISK supply going up. But where is that ISK going? Is it going into the economy and thus causing inflation or is it sitting in player’s wallets and not causing inflation? The velocity of ISK would suggest that the answer is it is mostly sitting in wallets. And why is that? EVE does not have well developed credit markets. The credit markets in game really only exist because of people like Chribba.
Further, you seem to think this is even possible. It is not. To do this CCP would need to know exactly how much ISK creation is going to occur before it occurs. This falls right into Hayek’s knowledge problem. Even in a completely contained economy where CCP can see everything going on in said economy they cannot predict this, not with a degree of accuracy to do what you are suggesting. The problem is that CCP does not have enough information in regards to the player’s preferences.
Although many additional functions have been added to PLEX none of them have seemed to significantly increased demand for PLEX as we can see no significant spike in the price of PLEX during any of the new feature’s release dates. A major reason for this is that PLEX can be created and used for it’s additional features without being added to the in-game economy. PLEX has seen a steady increase in price over the years irregardless of it’s additional features. As it stands the main use and demand for PLEX is for it’s game time subscription feature. As the overall isk supply increases it becomes more attainable for those selling PLEX. The monetary inflation of the isk supply is resulting in it’s lowering purchasing value. The isk supply is inflating and so are prices in EVE with PLEX being the most obvious indicator.
Indeed a lot of isk is sitting idle, but it can also become active at any time. Monetary inflation and price inflation share a causal link, but to actually determine to what extent isk inflation is occurring is extremely difficult/complicated. PLEX is unique as it has no real impact on the eve economy as it isn’t linked to anything besides isk.
On the topic of credit markets they either require trust or enforcement. This is EVE so trust is few and far between while enforcement is ineffective as force has no impace on anyone given that this is a game. A credit market might never be truly established in EVE. So sad 
With my limited observation of Jita/The Forge market, the constant daily, hourly or even minute modifying (0.01isk game as some referring it) of sell orders, general price seems to be going down, instead of up. And I see multiple times new sell orders will slash price by 30% or even more.
Same thing happen to buy orders, and very often their offer price are only 50% or even 20% of the lowest sell order price.
PS: My observation only limit to items I tried to sell and buy. I don’t consider myself a trader as I am only selling my loots and stuff from LP store, and buying stuff used by my ships.
I use PLEX as a unique indicator as it has no real connection to the EVE online economy so it’s much simpler to use to determine if there is inflation or not overall. Conclusion, yes there is indeed price inflation caused by monetary inflation of the isk supply.
Do we have data about number of plex in sell order related to that graph?
As plex upward price maybe due to less and less people willing(or need) to sell plex in market.
People may still buy plex (from CPP, not in-game) and spend on eve store directly as that is actually cheaper(in terms of isk).
My view on plex-selling is for jump start or a suddenly need of large amount of ISK, not a constant requirement even for people that done it. It is more logical to use it in EVE store directly.
(Guessing) People buying plex in-game to paid for Omega time “burn” 500 plex each time, that actually make plex disappear from market fast.
Correlation is not causation.
You lack reinforcing data that make your conclusion a reasonable one.
Plex has supply and demand. Changes in price do not mean a change in the purchasing power of isk except for against RL money or the services attached to plex.
The purchasing power if isk is would be better defined by cpi.
Have you considered looking at the day of the announcement? Many people in the PLEX market are very sophisticated. They look for things that will have an effect on the price, such as dual training.
Which is why CCP releases various price indices, and the rate of inflation is rather mild and only in some of the series, futher, CCP uses indices that have an upward bias (Laspeyres) vs. say superlative indices such as Trunquist.
No, it is trust and enforcement. By and large economies that are successful exhibit far higher levels of trust than countries that are not as successful. If you are going to have specialization you have to “trust” that the guy doing the step before yours is going to get it done. Same for the next guy in the production line. And when you walk into a store you trust that they are not going to rip you off. Even if it is a small purchase (i.e. one not worth seeking enforcement over). Why? Because of the value of the stream of profits. If I am selling hot dogs for $2 down at the beach and rip people off, it is just $2 many people would just write off the loss. But if I rip off people, then people will stop coming to my hot dog stand. That entire future stream of profits is lost, that is the cost of being dishonest. Yes, I could move to a new beach, but there are so many beaches where I live, soon I’ll need to move to a completely new area which entails more costs.
And if I rip people off for large amounts, then there are the enforcement costs as well.
In short being dishonest comes with a cost. Starting out honest, displaying an aversion to cheating can lead to improved outcomes. And it happened spontaneously, IMO. That, is nobody sat down and said, “We need a propensity for honesty in our citizens/subjects so we are going to implement a plan to get them to become honest.”
In EVE the downsides to cheating are very, very minimal. “Moving” is extremely easy, start a new character and send him all your ISK, boom completely “washed clean” to start again. Enforcement is also minimal. None of it will carry over to your real life unless you let it. You’d almost be foolish if you did not take advantage of it.
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I would also caution you in using simple economic reasoning like “looking for spikes”. This kind of thinking seems logical, but in reality things are far, far more complicated. For example, with the demise of Aurum and PLEX being broken into 500 units and the conversion of Aurum to “nuPlex” the “spike” was unlikely to occur.
I run into this in my job all the time. A manager thinks, “Oh, these guys should behave in a certain way and we should be able to see it in the data.” I tell them, your logic is sound in a perfect world, but we don’t live there unfortunately and you’re suggestion is unlikely to give you the results you want. And when we go to the data we cannot find the customers they are looking for. There can be a number of reasons for this:
- The data are not collected in a comprehensive and complete manner.
- Customer behavior is not as clean as the manager imagines it to be.
- Customers are “rational” but also “human”–i.e. they make mistakes and what seems obvious to a well informed person in one context is not obvious to another. People are “rationally ignorant” and even “rationally irrational”.
I’d just like to say that a lot of people are really bad at econ and that fact is on full display in this thread.
@Elzon1 pro-tip, @Teckos_Pech at the very least has an undergrad degree in economics (and by inference seems to use that degree in his job on a daily basis). Arguing with him over the economics of this game, unless you at least minored in the subject, is just a recipe for making yourself look foolish. Certainly at the very least you’re not going to convince the economists at CCP who should be your target audience for all of this.
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A bit inflation (no double digits) has a positive effect on real economies and it is safe to assume that this true for game economies too. Because a bit of inflation forces people to spend their money on investments of any kind on the long run. Worst thing for economies is deflation, because your cash become more valuable the longer you keep it in your account. Now ask yourself: Do we want players to spend their ISK or keep it in their accounts?
I wonder what else we should force people to do. Have kids, maybe? Do productive work (as determined by society, i.e. bureaucrats)? Fight other humans to the death for our entertainment? Give us their organs?
Your philosophy is at odds with free market theory and is the antithesis of a free and open society.
It is not my philosophy; it is a given market force. Works like gravity. Measurable, provable, inexorable. You may like it or hate it, you may fight it or profit from it. Too much inflation kills the economy, not enough inflation too.
Funny thing: Moderate inflation does not force anyone to spend savings, you can take the small loss per year and don’t care for it at all. It is the urge to increase wealth what makes people invest. Therefore my words are not the on odds with anything but being a hippie. Nothing wrong with hippies, I like hippies. They are the only ones that took the “Look at the birds” sermon by heart.
“Free society”… my sides… mankind stopped beeing free at the point we stopped to just roam the earth and live from what grew here just by itself. From seeding the first crops together onward it was causes and effects, compromises and negotiations, paradigms and laws.
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It is definitely YOUR philosophy. Inflation is determined primarily by how much money a given money issuer decides to issue. That’s not a market force in the same sense that gravity is a physical force. And, I know you’re full of hot air when you say it is “provable”. There is no “proof” in science, my friend. Only evidence in support of or against a given world model. But you’re right about money issuance being measurable and probably inexorable, until the system gets reset, which it does from time to time.
“Too much” inflation does not “kill” an economy. It CHANGES an economy. More specifically, it changes the way economic agents behave. And the same general statement is true for “not enough” inflation.
“Moderate inflation”, whatever you consider to be moderate, probably makes people spend more of their money, because that’s the whole point of inflation. Whether you call that money “income” or “savings” or “moolah” is really quite irrelevant. It’s money, value, that they cannot keep because they need to survive and survival necessitates a minimum expenditure and inflation raises that minimum . . . I feel like I’m talking in circles.
People invest for all sorts of reasons. One reason is to keep the wealth that they already have from evaporating away due to inflation. Another reason is to make the world a better place. Another reason is because they’re stupid and easily persuaded by the modern day equivalent of astrologers. Another reason is because it’s fun and they’re bored. Etc. For you to pigeon hole every single investor in the world and in history shows a tendency toward reckless generalization.
Your dogma is as tiresome as it is malignant. Please take a look in the mirror and ask yourself what kind of world you WANT to live in. You are trying to impose a failed, old paradigm onto a world that is moving on. Adapt.
Nope, that is just the supply of money and while it can target the inflation rate more money issued does not equal a higher inflation rate. That is what the other posters tried to point out. That’s what the Abenomics teached us.
And there are two definitions of “investing”. The macroeconomic one (the fitting one when we talk about inflation) and the finance one. Neither of both include “daily survival necessities“. People spending money is not “investing”.
And, I know you’re full of hot air when you say it is “provable”.
There is no “proof” in science, my friend.
No proofs then, fine. It’s just hot air. Have fun with the proof-free sciences then, I heard really great things about them.
“Too much” inflation does not “kill” an economy. It CHANGES an economy.
I have a friend in Venezuela and I am really pissed about that statement, because too much inflation does not only kill the economy, it kills the people too. Same goes for “the system resets from time to time”. The task of economists is to prevent exactly that and it is not wise to believe that a currency “reset” would redistribute wealth.
Your dogma is as tiresome as it is malignant. Please take a look in the mirror and ask yourself what kind of world you WANT to live in. You are trying to impose a failed, old paradigm onto a world that is moving on. Adapt.
I would love to give everyone on this earth the chances I had and the security I live in. No need to adapt, happy with what I see in the mirror. Half my money to make a living, other half gets invested because I get no interest from the bank and inflation is a thing here. And before you jump to conclusion, my parents were rather poor. The “system” just works here and I often wonder why “best practice” isn’t a thing on governmental level.
Actually no. The type of investments in the game are extremely limited. The lending markets in game are extremely poor, so all inflation will do is erode purchasing power.
No, this is not true.
You do not need inflation for people to engage in wealth creation. There have been periods with mild deflation in the 1800s US as output grew more rapidly than the money supply grew.
The notion of a “free and open” society is one where interactions between people are voluntary. This is what many [classlical] liberals and libertarians take as the basis of the ideal society. It usually entails economic freedom, freedom of speech, and freedom of religion/association.
@Mayhaw_Morgan is correct. There is no proof in an empirical sense. In fact, a better way of putting it is usually in terms of degrees of belief regarding hypotheses via probability theory.
Because what is “best practices”? You cannot define it for something like government. What you might consider “best practices” others might find sub-optimal.
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