It’s too bad that CCP kicked their actual economist out the door. There’s a large explanation pertaining to market collapse conditions that would be helpful if explained by someone that lives in the economic teaching world such as he probably did.
The short of it is that changing critical conditions in a financial market doesn’t always result in an immediate meltdown. It’s actually a long-term benefit if the change DOES cause a quick meltdown because that meltdown will usually be shorter, visible and provide a quick, harsh lesson that ‘decision makers’ will often react to before the effects can harm their own interests.
When the change does not cause a quick, visible downturn, it can be much worse. The results then don’t get stopped, the effects able to cause a series of cascading changes that set things up for a much more massive collapse. Think in terms of the problematic financial regulation changes in 2003-2005 that set the stage for the ‘lower visibility’ financial crashes and adjustments in late 2006-2007 that finally resulted in the massive late 2007-2008-2009 recession that has taken so long to really recover from.
EVE Online’s market system is so massive that a comparison to a complex RL system is warranted. The delay from this freezing of liquidity isn’t because nothing is crashing, it’s because the ‘lower visibility’ crashes take time to coalesce into a more massive wave.
I mention the freezing of liquidity as that has often played a role in bringing recessionary conditions. When banks stop lending to each other and to bank customers, that brings a large halt to money flow AND to the operations that used that money flow.
In EVE, people often put their financial liquidity into ships, equipment, etc, or the manufacturing of said items. If it’s for the purpose of selling said items, then they need to be able to make that isk back in a reasonable amount of time in order to keep making more. With the old fee system, even if it was a hassle because of 5-minute 0.01 isking, it wasn’t a massive financial risk to place things up for sale. You either could keep the item up at a minimum cost or you might be able to sell it to a middleman (station trader) that would put the time in to sell it. The mechanics for doing so wouldn’t financially break them.
This benefit extended up and down the supply line for complex items.
Now, because of this broker fee change, ALL of that has been massively affected. It no longer is going to be economically viable for a great part of the population to be a part of the market in this way, especially if a trend I see starting becomes widespread. One could mission in order to bring isk in so that they don’t go broke trying to make and sell things (often at a loss if they don’t want the item to sit for a year), but that massively changes the conditions of gameplay for the manufacturer.
The trend I’m already seeing is a tactic by the ‘deep pockets’ to manufacture complex items en masse, and then place them on the market at substantially below the cost of making them. This pretty much drives out any smaller competition. The next step after doing that would possibly be to raise prices massively so that players must pay much higher than normal for access to that item, or if one likes to watch the world burn, remove their listing altogether, knowing that the competition isn’t ready to fill that void for some time. If, after some time, the competition begins to rise again, repeat the cycle.
