How to have a free market economy that doesnt inflate out of control.

This has been panedmic in MMOs. In short new money spawns on monsters, gets dropped in loot, enters the economy and never leaves.

This mechanical solution should be relatively easy to implement on the Portalarium side. First identify the key commodities that the game simply can't function with out. For example, ingots, wood, and reagents. Establish a preferred price for each. For example 8gp per ingot being the hypothetical ideal price.

Run a query each day over all the player vendors targeting what the average price is for each commodity sold. If the average amount is greater than the target price we know that inflation has occurred.

To stave off inflation you do something like this, take the player based price and subtract the target price and temporary reduce the amount of each commodity by the difference. This encourages players to trade their gold (a durable good that doesn't expire) for consumer good (goods that will be consumed and leave the game).

I believe this would be a good way control the rate of inflation without resorting to oppressive taxes, gimmicks, and expropriation that have plagued other games.

Here are a few preemptive rebuttals and answers:

R: This doesn't actually reduce wealth it just exchanges it.
A: This feature is an advantage, because it reduces the supply of money without necessarily attacking your characters accumulated wealth.

R: This amounts to price fixing, the vendor price will always be the market rate.
A: The NPC vendors would be reacting to player activity, so by definition it would be player driven, but to the point this would not be true if vendors only had a finite stock available (which they did in Ultima Online). If vendors have finite stock or fixed replenishment rate the sale would have predetermined limits.

R: Players will manipulate the system for personal advantage.
A: Since the price calculation would be based off units sold it would be difficult at best to manipulate. If the market rate is 10gp per ingot with a target rate of 8gp per ingot one might expect to see ingots selling for between 4gp and 12gp on the open market. In the case where manipulators are trying to skew the market upward selling ingots to themselves or friends for 100gp each to cause a price drop could easily be excluded from the calculation by scoping the numbers to a reasonable range and excluding obviously manipulated behavior. The same is true for people selling ingots to friends for 1gp each under the same conditions.

R: This will hurt miners/gatherers/ect.
A: Since the system is trying to achieve balance it may hurt or help in the short term depending on which way we are trying to correct. For example, if player prices are too low vendor prices rise higher than the target. This would be an indicator that your prices are too low so raise them. But on the other side of the coin, spawning finite amounts of vendor commodities to help keep prices stable becomes a way expedite player items to market. For example if you are a crafter and ingot prices go from 8gp to 4gp is actually a positive thing. It indicates that you are not supplying goods to market fast enough. What the game would be telling you is to not spend so much time mining right now. Buy the discount ingot while you can get them turn them into trade goods and get them to market. Once production rises to meet demand ingot prices will return to normal or higher which would be an market indicator that it is time to resume mining activities.

/flame on

 

Ahh Mipoleon,
Yes, tis' a good and grand question indeed because all the threads of such I think are the only rival that the PvP threads have for enormous longevity.
Yet still worth any new innovative thought required because all the Rockefellers that play something long enough always get rich and figure that their boredom with having such huge funds does not equal the newcomers right to earn the same status. <-- which is always the premise of standpoint because any negative effect to control such will be felt by the lower income level or new people income level and you can't stop people from doing something allot that they just love to have allot more of. "Yet mine is always just another thought let into wind as any is"

I think there are a number of other threads on this subject, but I hate it when the thread police keep directing people to very old posts that involve 100+ pages to read through to see where any were at in any outcome.... "So I do invite every new thread on any subject", because new fresh paper is always needed to wipe things off with to get a clearer picture or a cleaner slate that doesn't have all the old scratching or heat rashes involved with such

So I will begin by stating that all young people want to feel empowered when they're playing a new game which hooks them, because they then feel that they won't leave the game because they've gained so much... and those Rockefellers that do leave the game always pass on their wealth to a passer by or successor.

But I will also say that there is some sort of attempt within SotA to curve these inflationary trends and I think there's even some LB Vid that touches the subject matter, but I'm at a loss for Time to find it or link us with the other threads.... "which I hate old and dead long threads anyway"

"It's all a matter of cleaner paper for any new innovative thought, or you're just wiping off allot of old a'holes"
"So Indeed ~ Let's Flame On!"
~Time Lord~

 

tbh, I've never seen inflation in a virtual economy. They nearly always deflate over time. Goods start out expensive because the materials, recs, etc. are hard to get because few people have access to them. Over time the more monopolistic system breaks down and everything becomes cheap, due to competition. Finished goods usually sell below craft price as people use them for skill ups.

 

Every game I've taken part in has had prices for goods skyrocket Stupid-High(tm) simply because some people have played long enough and perfected the game to the point that many items come out of the reach of new players unless they want to spend real money to play catch up. Amusingly enough, the only time I've really seen deflationary pressure in a purely player driven economy (FFXI) was when the gilsellers decided to drive the regular crafters out of business by severely undercutting them non stop, (and frequently having one of the other gilsellers buy the item to keep the price deflated on the AH) and once the regular crafters stopped trying to sell their items, and went to do a craft that wasn't being targeted by the gilsellers, the gilsellers then pumped up the price again so people would have to go buy gil.

Other than that, occasionally a Good Guy (tm) would try and lower the prices of items on the market from Stupidly Expensive by severe undercutting, but sooner or later the Rich Folk would notice, buy all the items and put them up at a hiked price again, so only the long term rich players (or gilbuyers) could afford the items.

FFXI had the 'fixed amount of tradegoods' for sale that respawned at certain points of the day, and it was mostly a frustration and annoyance, and a race between players to see who could get the needed items for crafting so that they could make their goods and put them on the market.

One of the most horrible ideas I've seen, that had a severe negative impact in SMT: Imagine, was instead of having infinite fixed price keys to enter dungeons like they did at launch, they moved to have the keys limited and have the price go up as people bought them more. So for popular runs you might end up bouncing all over the world trying to find an NPC seller that didn't have them for far higher than the reward of running the dungeon would be worth.

To paraphrase one of my fellow Forum dwellers - The Love of Free Market Economy is the Root of All Evil.

 

I have found that this is one of those subjects (like the afore mentioned PvP) where no matter how good you think your idea is that it should work.. there's always someone who believes it's doomed to fail for their own reasons etc etc..

Some ideas I've liked and/or proposed myself (I would do shameless plugs here just 'cause but some or all of those are in Dev+ forums) included limited currency with or without small inflation.. I put forth that for each new character X amount be injected into the system or removed for deleted characters. NPC price reactions based on PC prices and I think there was something else that escapes me for the moment. There was quite a bit more detail but always someone hated it and wanted to do just the opposite or some such.

I've been emphasizing for awhile now that the trick is to keep the currency moving. I may have to look up those other threads.. but before anyone thinks me among the "thread police" I plug so that new posters can take in what's been discussed in hopes they'll add something new. By all means.. new threads and new ideas.. but old threads still have good ideas too.

 

Simplest way to adjust inflation is to adjust the commision that the vendor takes for selling items. There you can remove money from the game in a natural way.

But also remember that the amount of money in the game needs to slowly increase or else will players never get enough to buy properties and houses with ingame money. Once players start to have enough money for properties we get another way to remove money from the game, property taxes.

 

Economies need to be watched constantly and adjustments made to keep in check. I am not an expert on economies, but I know EVE has to make adjustments all the time as people figure out how to game the system.

In SOTA, I believe they said they would not really be creating stuff out of no where. They will need to in the beginning, but stuff sold to vendors or lost on the field will end up in the loot table. I think they even mentioned that gold would work the same way and when gold is lost or used at a vendor it would be recycled. This would help control the "magic" injection of new gold and items into the economy at least after a certain point where we go through enough stuff to inject back into the system.

 

One advantage EVE have is that crafters removes money from the game as in many other games, UO included, crafters introduce new money into the game.

If you craft an item in EVE that no one wants to buy you will not be able to sell your item. Most other games you can still sell your item to a vendor and there by creating new ingame money. So therefore I hope that you will only be able to sell your items to other players! Perhaps via a system where you list your items via a public vendor that sells the items for a commision.

 

This should be a very closed economy and thus I have high hopes they will include enough levers to keep things under control.

Would love to hear more about the plans/ideas during the upcoming anniversary hangout things...

 

That may be difficult with the Single Player mode of the game. I think adjustments for SP will have to be made or else have players feeling cheated that they have to drop or destroy a bunch of items rather than sell them.

 

It's a simulation. There will be holes. People are smart and will exploit the holds.

As I said, inflation rarely happens because supply of raw mats is more or less unlimited. If <leather> is relatively expensive, people will kill more of the mobs which drop <leather> until the price falls back to normal.

 

My understanding is that selling an item to a vendor will still be based on market value, so you might be able to sell it but not for very much. In addition stuff doesn't vanish. Anything sold will either be available at that vendor for sale or end up in the loot table for others to find. Not sure how much that closes the gap, but I think vendor buy/sell rates and as well as taxes and fees will allow for some controls over the economy itself.

EVE's economy is insanely complex, but I don't expect that for SOTA. Or at least I hope being a merchant in SOTA isn't as much a spreadsheet game as it would be in EVE.

 

With patches and updates you can easily simulate same thing that are happening online market to the single player market.

 

Thing is, what is market value? If no one ever wants to buy a certain item the market value should be nil and how do you emulate that in to a market where the players are not the only buyers? UO was a great game but one thing I really hated was the market system. You could be standing in the shop and buy leather, make female armour and sell for profit if the shop ever sold out the leather just go to next tanner and repeat (this could be done with several different wares). The market did not adjust to the extreme amount a wares that was produced and therefore a constant stream of new money was created. Okay if some of the wares and up as loot some of the problem is avoided but far from solved all and you will be creating some new on the way.

 

If you make it so that you can't just dump a load of player crafted items on a vendor crafting cant be inflationary. The Siege Perlious shard of UO was like this. You could only sell to other players or melt your items back down into raw materials at a loss.

I think adding cost to crafting (like what Darkfall has) will ruin the immersive experience for players. It would force players who only want to craft to be advendurers as well so they can gather gold to pay for their crafting in order to sustain a purely artifical cost.

This is an argument against everything and not for anything.

 

in this game making items to sell to a vendor will be a loss of gold in all cases

 

I, personally, would hope that if an item is unwanted that not even a vendor would buy it. However, a small fee for simply reducing the item to raw materials would make sense. Without knowing the overall value for stuff its hard to guess. In NWN many servers the vendors would just buy stuff like that for 1 gold.

I imagine the SOTA economy will be more rich that UO. Afterall UO was made before there was a thing called virtual economies.

 

the great economist Milton Friedman said "Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output."




you're confusing a rise in prices of a few items with inflation, a rise in price on some items often occurs for other reasons.


all they need to do is adjust prices on things like repairs and taxes and commission fees to offset the gold input into the economy. they can adjust the gold input and the gold output.

i would prefer the game npc's to not sell iron ingots at all. if you want iron ingots then buy it from a miner. if the price is very high then more players will mine it thus reducing the price. if the price offered to players is too low then less of them will mine it, etc. this is a real player economy.

 

Dear Readers,
The only cure for skyrocketing inflation has been "The Armageddon Spell" as it was proposed during the beginnings of Ultima Online. The previous mention within the Ultima series was not of this great value.
I talk about value, as this "spell" is the only true and long lasting answer to this inflationary economic question.
"If you make it difficult for the old to gather any more moneys, then you make it doubly difficult for the new player to ever have such".

Every game in human existence has suffered by such. "Every single one that has a growing economy"!

The only solution is to bring back into existence this, most powerful spell. We see the same thing within our current and recent past within the way that most Nobel Laureate and Nobel prize winners solution that we've seen that is now dragging us un-willingly out of the current economic crisis, and it's working, despite the pains an agonies of those who have so much to now pay so much for it's current real world recovery.

That is why I propose to bring back "The Spell of Armageddon" and thus creating a quest of sorts.

If a group of individuals decide that there is an inflationary crisis that needs the diabolical spell of the Armageddon to be passed, and there are those that feel that they do not wish to loose "everything they have".... thus then let the quest begin.

This levels all paying fields for both rich as well as the poor and if our economy tips to the side of the many, in ether case, thus our great economy will be effected..... to an end or new beginning, or to the current and ever gaining public trust.

"What say ye' great ones of PvP and to the Great Gatherings of Things to thus?"!

Simple and worldly solutions for a "Game"...
Then let the game begin...
~Time Lord~

 

Nothing like grinding 8 hours then having the server crash and not save That's more than enough Armageddon for me.