WellâŚIMO, no.
In my view, markets donât do anything. People do things. We use the market as a short hand for people interacting. To say the market does something is to take a process that is unguided and complex and give it human like attributes. That it thinks, decides and chooses, but it does not, the market process is the result of people thinking, deciding and choosing. Further much of this is based off of individual subjective valuations. When viewed from this light there is ârightâ price. In fact, in game there is no âmarket priceâ. What is often reported as the âmarket priceâ is the median price of all the PLEX that were bought and sold.
So the market is a short hand for people interacting. The in game âmarketâ is actually just a mechanism to facilitate those who want to interact in terms of PLEX coming together. Before that it was the forums. People would buy and sell GTCs on the forums, that is where I got my first infusions of ISK to do stuff to make even more ISK.
The term âthe marketâ is really a short hand for a complex set of interactions. I have come to this conclusion after studying in detail standard neoclassical economics, but also in learning about evolutionary theory and how evolutionary theory in game theory can be applied to economics and also in noting that neoclassical economics is always focused on equilibrium. But how do we get to equilibrium is an important question. And do we ever get there? For the last question I say, âNo.â What happens in equilibrium? Nothing. Supply exactly equals demand. In the case of PLEX if we ever wound up in equilibrium there would be no PLEX being bought or sold. Supply would exactly equal demandâŚnothing more to do. But we never see that, so we never get there. So out of equilibrium dynamics should be more importantâŚbut neoclassical economics does very little in that area.
Now, that being said, you discussion of the dynamics here I largely agree with. For example,
I take it you mean, if I am willing to pay no more than 650 million ISK for my game time, that is irrelevant if nobody wants to sell to me at that price in game. I agree. If at that price nobody seeâs it as worth while to buy PLEX then there will be no PLEX to be bought.
Again, I pretty much agree. People often think that CCP should do something to get PLEX prices back down to X ISK. My view is that while the sentiment is nice, bringing back players who can no longer afford to sub, the mechanism to achieve this is never explained.
Aaron has at least suggested a mechanism, but I am not at all convinced weâll go back to some low PLEX price. The primary reason for this is that the old price of say 500 million for 30 days of game time was the result of the market process at that time. The order that market process produced was, in large part, defined as it came about. That is, it was not pre-defined by anyone. As such, we cannot pre-define an outcome today either. His idea might result in a lower price, but probably not much lower. Or who knows no change at all, or even a higher price.