PLEX is very expensive right now thread

that does not tie power creep to bounties… that ties bounties to bounties and maybe PLEX prices…

i edited my post but yeah
the faster you can kill rats the more bounties you can make
isk generation increases because people kill rats faster
im not sure if you have another explanation to contradict that statement

I’m not trying to contradict it.
It does seem logical, and it ussually the direction i try to go. But i haven’t seen data supporting it.
CCP shows bounties increasing. PLEX prices have increased lately. Correlation doesn’t imply causation.
Carriers got buffed a while ago, since then they have been nerfed, mainly fighter application/DPS.
Drone boats (gila,snake,ishtar,VNI) have been untouched for a while, recently there was this drone aggro thing that I assume works as a nerf.

yeah, i guess when you first linked that the PLEX offer was low, now it seems standard and stable. Not related to PLEX price tho.

the general concensus is that bounties are the largest isk faucet in the game and i am in agreement with that
the idea is corrobarated by ccp data and unless some chinese hackers are using a highly advanced proxy to inject unmitigated amounts of isk into circulation i cant see where else the isk would be coming from

Why would the price have to go back down? Assuming no in-game changes to resource distribution, if PLEX/month climbs from 1.5B as it is now, to 3B say by next year a bunch of freeloaders will be squeezed out of the game, and the number of ships someone can buy will still be double. In fact, they will be buying less PLEX, further shrinking in-game PLEX supply and driving up in-game PLEX prices and squeezing more people out.

Only if a higher ISK:PLEX ratio brings more new PLEX buyers into the equation will the PLEX supply increase and prices start go back down. Maybe that would happen enough to cover the decline, or maybe even be a net benefit for CCP, but I don’t see any reason anyone is banking on that as a guaranteed outcome. It seems completely plausible to me that the number of new PLEX buyers would not be sufficient to cover the decrease in PLEX purchases from existing customers who need less.

The number of PLEX on the in-game market is completely determined by the real-world demand for them. Yes, the price is determined by the game mechanics and is an imaginary number with an imaginary currency so the game mechanics dictate who get the limited number of in-game PLEX, but how many show up on the market is determined by players deciding to use their credit card or not. More imaginary ISK per PLEX may increase their use by some customers, but will also cause other current customers to use less. Let’s just say I am skeptical of those who claim with any certainty to know which of these variables is most important for maximizing CCP’s profit.

from ccp
you really need to clarify where they are buying plex because it makes it so much harder to understand your posts sorry

anyway im still reading ill edit in a sec

okay heres the fallacy in your logic
if all the ig-plex buyers quit
then who will buy the plex
other rl-plex sellers
monthly subscribers
without the ig-plexers there isnt much market for your rl-cash plex

what im saying is if 3bn is too expensive for ingame plexers and they all quit
then who is going to pay 3bn
all the potential buyers have left
so you have to lower your price to meet the market expectation
in the meantime the in game buyers come back as the market lowers to meet their expectations

No one. If there is less PLEX on the market only the wealthiest in game will be able to afford them. The rest just turn off their alts, and the ones that use them to plex a main will quit Eve or go alpha.

If the PLEX price ever starts to drop that demand is still there. People will reactivate accounts that were formerly profitable and resume consuming PLEX. Sure, a few might quit the game entirely and that demand is gone, but PLEX being so useful for in-game alternate accounts and services, there is a near limitless demand for them in game.

I agree with you though that there is indeed an upper limit for in-game PLEX price that is determined by in-game wealth faucets if that is your point. PLEX prices can’t just increase forever. I just don’t see in-game factors as being especially relevant for CCP’s bottom line. The wealth faucets determine who is getting the limited supply of PLEX that make it to the in-game market, but how many are bought from CCP with real money is primarily a function of how players view their utility. Some would find higher value of ISK per PLEX more desirable and give CCP more money the higher the ISK:PLEX exchange goes, while others will find their needs met by less PLEX and give CCP less money the higher the ISK:PLEX exchange goes. Anyone, except perhaps someone from CCP who has all the raw data, who claims to know for sure what is the best PLEX price for CCP’s bottom line is just talking out of their ass.

fallacy
youre suggesting that if no one buys plex the plex price will still stay static at 3bn
i didnt spend $20 on a plex for it not to sell
i want isk so im gonna sell it for isk
if that means lowering the price to 400m then so be it

yup you get it

and to the rest of your post
this whole discussion started because of your misunderstanding of the term elasticity
but now i see we are on the same wavelength
you are describing how plex is an elastic resource

Fallacy? What’s fallacious about the statement that if 500 PLEX reach 3B, only people with 3B ISK to spare can buy them? That would be the price the market determined them to be at. I would expect at that price, the volume bought and consumed would be much less than at 1.5B given less people have that disposable ISK, but there are people who can afford 3B ISK/month to plex extra accounts or even more.

I see no reason why the price would decide to go down because some people couldn’t afford PLEX as long as some can. The only thing that could increase how many people can afford to PLEX is an increase in the number of PLEX bought from CCP and listed on the in-game market.

Maybe I am just not getting whatever fuzzy idea you are trying to express.

I agree that PLEX is an largely elastic in-game resource (except perhaps from the perspective of people who absolutely must use PLEX earned in game for their only account for some reason) for whatever that is worth. PLEX in real-life isn’t though which is the whole crux of this discussion. People will not necessarily buy more PLEX from CCP just because they are worth more imaginary in-game currency. In fact, there is a very obvious reason why some of them might buy less as the ISK:PLEX exchange increases.

because you assume that people with 3bn to spare will buy them and that there are enough people with 3bn to spare who are willing to be saturated with plexes to maintain the demand at that price point

but it isnt and it never has been and the in game mechanics dont support it so its all imaginary

and those people will support the entire market at a cost to themselves
for what reason
theyll cut their costs but unsubbing alts thereby consuming less plex

because youre assuming that those who can will fulfill the saturation in the market
if there are 100 plex on the market for 3bn and only 50 players who want to buy them at 3bn
who will buy the other 50
those 50 will still be there next month if no one buys them
and then next month there will be 150 on the market at 3bn
but still only 50 people who want them
you think the plex stockpile will just build up on the market despite no one wanting to buy them
people dont give ccp $20 for a plex for it to sit on the market and not sell
they pay ccp because they want instant isk

it is
its the very definition of an elastic resource

It isn’t though. An elastic relationship is economics is one where one variable produces a proportional change in response to another - say sales volume going up in proportion to a reduction in price. I maintain this relationship does not necessarily exist in regards to the ISK:PLEX ratio and real-world PLEX sales, or a least it may not given we don’t have the data and there are plausible reasons why PLEX buyers may not behave that way and actually buy less PLEX from CCP as the ISK value increases. Just increasing the amount of ISK a PLEX is worth isn’t going to always result in more PLEX sales to CCP making that relationship inelastic. If you claim otherwise you are a fool.

In any case Discourse is telling me we have replied to each other too often. I have made my point in a half-a-dozen posts by now and if you aren’t getting it there is an insurmountable communication problem or you are just being obstinate. Whatever, you are free to believe what you want.

That is kind of turned on its head though…currency, at least dollars, is something of no intrinsic value. Bananas have an intrinsic value.

Lets just say less than optimal example.

Thing is if I am willing to convert say $20 to say 1.5 billion ISK, and lets say that now that $20 gets me 1.75 billion ISK, and I was anticipating spending another $20 in the future to convert another 1.5 billion ISK I might still spend the $20 knowing it will go further now. Or I might buy 429 PLEX instead (assuming 500 PLEX = 1.5 billion ISK for the purpose of this discussion).

And as I note, at 1.75 billion for $20 a person who was indifferent at 1.5 billion might now buy PLEX. And the guy holding PLEX as a store of value, if he thinks the run up is temporary he might cash out, wait for the price to fall and buy back in. That is how one turns paper gains into real gains.

On top of this the notion of a fixed supply implies a perfectly elastic IG supply–i.e. the supply curve is vertical at a given level of quantity. A casual inspection of the Jita-Perimeter PLEX market says “No,” to this hypothesis. In fact, look at the dates of the last sale? What did we see, a significant uptick in the amount of PLEX that were sold. This simply cannot happen with perfectly elastic supply.

And perfectly fixed supply is usually something you see in the very short run. And given the ease with which OOG PLEX can be created, IG that would have to be very, very short indeed.

Absolutely. But what does this mean for the OOG demand? It means it is probably relatively elastic (note not perfectly elastic). Linear demand curves are not exactly correct here, but think of a demand curve that has a shallow (downward) slope.[1] That is, the demand is (more) responsive to RL price changes, not less.

And what then, is the implication for the IG supply? After all, there is only one (more or less) source of IG supply of PLEX and that is OOG demand. If the OOG demand is sensitive to the OOG price, then the supple is also sensitive to the OOG price. This suggests that supply function IG is not perfectly elastic.

And I want to be clear here. Go back and look at the picture of the perfectly inelastic supply function (the last one–i.e. the vertical line). That completely and totally determines the quantity. There can be no other quantity given that level of supply. That makes for a very clear hypothesis to test: if the quantity being sold is moving around from day-to-day, week-to-week, etc. then that is evidence against perfectly inelastic supply. The only out here is to suggest that this perfectly elastic supply moves around alot…which is very much a stretch since an upward sloping supply curve would provide a less demanding hypothesis to fit the data–i.e. it is a more parsimonious explanation.

[1] Linear demand curves actually represent all types of price elasticity, inelastic, elastic, unit elastic.

I am not saying it is perfectly elastic in game. But it is perfectly elastic OOG. That is out of game the supply is equal to the price in that there is no limit to the number of PLEX CCP can theoretically produce. The amount of PLEX produced/created OOG is limited by the demand.

That is, OOG it looks like this,

OOG_Supply_Demand

Supply is equal to the price of PLEX.

In game it would, IMO, look more like what one would see in a text book,

IG_Supply_Demand

The notion of a fixed supply would be more like,

IG_Supply_Demand_pinelastic

Note in this case quantity does not change as demand changes. That is,

IG_Supply_Demand_pinelastic_Dem_Shift

Notice in this case that even though Demand has shifted (increased at all price levels) the quantity is still the same. That is under this assumption we see only price movements, no quantity movements.

For there to be a quantity movement, in this scenario, we’d need the supply to shift.

Hmmm, can we pick a better example? Theme parks are more like club goods. Which can complicate things…

Granted EVE is a club good itself, but within the club PLEX are not a club good.

Should I like this post or not? This kind of post is the reason why Facebook introduced the “angry” emoji…

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You are mixing supply and demand.

Supply OOG is elastic, perfectly so, IMO (or close enough for the difference to be very minimal).

Demand is probably elastic, but not perfectly so. By elastic I mean demand is more sensitive to price changes. That is a price hike will likely have a dramatic effect on PLEX sales–i.e. quite a few less. And a PLEX sale will increase the amount sold, in percentage terms, larger than the percentage decrease in price. That is if the price goes up by say 10% sales would go down by 15%, as an example.

Okay, you are talking about something I hinted at earlier the backward bending labor supply function.

In that case when the wage rate, which is a price, gets high enough the supply curve actually gets a negative slope–i.e. an increase in the wage rate decreases the amount of labor supplied.

The reason for this is that supplying labor also means less leisure time. As the wage rate increases, the marginal value of leisure exceeds the marginal utility one derives from that extra income, and since the wage rate is so high one can still have high utility and take more leisure time.

You are arguing something similar here, IMO. That if the price of PLEX gets high enough the marginal utility of the additional ISK is less than the marginal utility of the RL money I’d spend. True enough, but it would have to be with a rather high PLEX price, IMO.

Further, if we are on that part of the supply curve now…a PLEX sale, if I am not mistaken, should increase the in game PLEX price. Since we do not see that, but do see the exact opposite, I think it is safe to conclude we are not on the backward bending portion of the supply curve.

Or as @JC_Mieyli is pointing out…at that price point, there won’t be any demand, notice the demand curve in my graphs is sloping downwards as price goes up. Price goes up enough…Demand is zero. There is an upper limit on how high the PLEX price can go at any given point in time.

You can just quote it and use an angry face. :stuck_out_tongue:

BTW, you should probably make the angry face at my post that started all of this. :scream:

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Maybe there is some confusion of how I am using supply and demand. Let me try one last time.

The demand for real-world PLEX by paying customers (that becomes the supply on the in-game market) is not elastic with regard to the in-game ISK:PLEX exchange rate. At least I see no reason to assume it is. PLEX buyers are basing their buying decisions on the utility of the PLEX and for some of them, X ISK worth of PLEX is sufficient to cover their in-game needs. Thus increasing the amount of ISK given per unit PLEX only serves to decrease demand for these players, not increase it.

The ratio of players who will buy more PLEX from CCP if they are worth more ISK to those that will buy less PLEX from CCP if they are worth more is unknowable, at least to me. Do you have any data or evidence that the first group is in the majority as would have to be the case to support your claim that real-world PLEX demand behaves in a traditional elastic fashion where a higher ISK:PLEX exchange would always produce an increase in the volume of PLEX sales by CCP?