Game Economy and the gil redenomination

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Originally Posted by Aarin

so the little gil i have on me now will be reduced to be even less . . . . wow... thats........ So the 8k gil I have on me will become 800 gil . . . . . . . . . . . talk about making the poorer even poorer lol

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... how does it make you poorer... that 800gil is worth the 8k it is now... all the reduction is doing is making it so money isnt such a large number... so that 1 gil is not something so small... that 1 gil can buy a soda instead of having 100gil for a soda! they are not making anyone richer or poorer >_> they are just making numbers smaller

for anyone who HASNT noticed the gil cap has been reduced for only one reason. the game is being relaunched; in what MMO have you ever played where is impossible to purchase decent low level gear equips with the cash you earn? i started this game about 2 weeks ago and noticed that the game is HORRIDLY imbalanced for the current market. 10k-50k for level 1-30 gear. as a new player it was nigh impossible to get gear using standard methods. without gear, game progression cannot be easily made; when this happens people quit the game. yoshi P is just trying to prep the economy for a new player base. be greatfull he didnt leave the gill at its current cap and just wipe you all down to 1/10th of your current gil.

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Originally Posted by hideka

for anyone who HASNT noticed the gil cap has been reduced for only one reason.

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the cap ISN'T being reduced:

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5. The maximum amount of gil that a player can possess will not change from 999,999,999.

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http://lodestone.finalfantasyxiv.com...e956cb586363ab

Currency values are changing, not the gil cap.

I don't see the economy remaining the same in ARR as it is now, prices will fall however it very well may take some time. Something to also consider, SE may be waiting until when the servers go down to do a mass-ban of gil-sellers. I could be giving them too much credit there, but what if they were waiting until the servers go down to weed through the accounts labeled as gil-sellers? Wouldn't that deal a pretty devastating blow? SE may have been monitoring all accounts that have been botting, selling gil, watching where that gil goes, and the characters involved. And then when the servers come back online for ARR it's bye-bye gil-seller accounts. I know, wishful thinking I guess...

Anyway, on-topic again I do believe people will attempt to sell at inflated prices. Meanwhile things will slow to a crawl until eventually they get wise and start lowering the price. It might remain high for awhile, but eventually it will drop and taper off to a new standard price. Demand will probably be pretty high depending on how big of a success the launch for ARR is. Means big money opportunities for crafters, likely bigger ones for gatherers. All-in-all, you'll just have to wait and see how it goes. Inflation will exist, there's no doubt there. However over time it will drop to a more reasonable price. It does when new items are introduced, it will here.

I think the economy in the game will get worse, even if our Gil is being denominated prices in 2.0 will somewhat be relatively higher than what it is in 1.0. I'm a heavy seller on the ah and this is how I see it going. I'm sure more heavy Gil holders will do the same.

For example.

in 1.0 say a dark steel body is 1m arm and people commonly buys it, your paying the price of 1m right. And you have muliti mill in your inventory.

But in 2.0 theoretically that would be equivalent to 100k and you have multi thousands same as millions but denominated.
However thought in 2.0 as a sell we hqve a different mentality of 1mil price with multiple millions in our inventory.
So us seller would ideally in 2.0 put that same armorer up for something on the lines from 100k-150k and coming from Gil mindset in 1.0 players are going to buy it without realizing that they are spending 0-50k more or in 1.0 0-500k more for the item. So intern we will be paying more than what we would of in 1.0.

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Originally Posted by Meier

I think the economy in the game will get worse, even if our Gil is being denominated prices in 2.0 will somewhat be relatively higher than what it is in 1.0. I'm a heavy seller on the ah and this is how I see it going. I'm sure more heavy Gil holders will do the same.

For example.

in 1.0 say a dark steel body is 1m arm and people commonly buys it, your paying the price of 1m right. And you have muliti mill in your inventory.

But in 2.0 theoretically that would be equivalent to 100k and you have multi thousands same as millions but denominated.
However thought in 2.0 as a sell we hqve a different mentality of 1mil price with multiple millions in our inventory.
So us seller would ideally in 2.0 put that same armorer up for something on the lines from 100k-150k and coming from Gil mindset in 1.0 players are going to buy it without realizing that they are spending 0-50k more or in 1.0 0-500k more for the item. So intern we will be paying more than what we would of in 1.0.

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What you just said makes an assumption without any logical progression from point A to B. You basically just said "I believe prices will be inflated in 2.0 because prices will be inflated in 2.0."

If you truly do sell on the wards then you must know that there is always competition to be the lowest asking price and make the sale before the next guy. A free market finds the median by itself 100% of the time.

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Originally Posted by Wynn

What you just said makes an assumption without any logical progression from point A to B. You basically just said "I believe prices will be inflated in 2.0 because prices will be inflated in 2.0."

If you truly do sell on the wards then you must know that there is always competition to be the lowest asking price and make the sale before the next guy. A free market finds the median by itself 100% of the time.

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that is true but from my experience most Gil making come comes from material items than it does from full crafted ones like ingots plate fish rather than body legs weapons. People strive to get the best gear as possible hence instance but and alternative to instances is HQ gear to which to meld on. People have an underlying feel of say being a special snow flake. So if you take my example from above and apply to low common items such as ore fiber and beyond prices are still going to be a little higher than what they are now. Like someone pointed out in another thread about shards.

Shards sell for roughly 80-100g a pop. In 2.0 people are not really going to sell for 8-10gil they are mostly going to try to sell at 11-20g a pop.

The price of your darksteel body can even drastically change in ARR without the gil reduction.
How many mats can you gather in a hour in ARR? (gathering change)
How good can you craft this one HQ mat for the finished gear? (crafting change)
How fast can you get the recipe in your recipe book? (the recipe can be a quest reward)
How many other crafters craft the same gear and are willing to win the undercutting contest? (first sell win)

People who think the prices would be 1:1 without the gil reduction are living in an illusion.

Even without the redenomination you'd see changes in values of practically every item. All of the systems are being remade, in addition to new systems, which means the demand for practically all items will change and thus the price. We have to re-evaluate what everything is really worth in 2.0. The redenomination gives players even more incentive to do so though.

Sellers will have incentive to sell at lower prices because from day 1 there will be people selling for the new prices, including new players who don't know the old prices and are working entirely on the 2.0 gil rate.

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Originally Posted by Felis

The price of your darksteel body can even drastically change in ARR without the gil reduction.
How many mats can you gather in a hour in ARR? (gathering change)
How good can you craft this one HQ mat for the finished gear? (crafting change)
How fast can you get the recipe in your recipe book? (the recipe can be a quest reward)
How many other crafters craft the same gear and are willing to win the undercutting contest? (first sell win)

People who think the prices would be 1:1 without the gil reduction are living in an illusion.

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Exactly.

Not only that, but the prices will also be re-evaluated due to:

• Changes to Classes, Jobs and the battle system (materia/melded prices esp effected by this)
• Influx of new players
• The introduction of a new class.
• Revamped dungeons and primal fights.
• Introduction of new items.
• Possible stat changes on existing items (Dzemael Darkhold drops, AF, etc..)

ARR is the prime opportunity for SE to re-value the gil as everything else in the markets will be chaotic until players begin to sort out the new market value of everything.

Will you guys even remember how much you priced items during 1.XX when 2.0 lauches after (presumably) several months of downtime and a beta?

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Originally Posted by TrystWildkey

He is operating on the assumption that the game economy will work exactly like a real life economy and balance itself.

I am operating on the assumption that in an economy where you can buy gil, behavior will not match the real world.

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His assumption is 100% accurate. Understanding that though all economies have underlying differences Beijing is very different from Hong Kong, they are both 100% economies. Though FFXIV, being a video game based in a virtual reality, it is no less an economy. Gil is almost as real as dollars these days, as dollars are predominately handled electronically. The items being exchanged are tangible goods, and the exchanges are being handled between real people. Gil has value to these real people as it can get them things they want; just as dollars can be used to attain other goods. For some people gil is even more valuable than dollars, so they exchange their dollars for gil.

So, FFXIV does have an actual economy. How much does it resemble the United States or Beijing economy is a different question. Most people associate their understanding of equilibrium prices and the effects of supply and demand with free economies, not really understanding what a free economy is. Suffice to say, FFXIV is a fairly free economy, so you can expect it to behave in a similar fashion as other free economies. That is to say, prices will adjust based on supply and demand. But as in all economies, especially free ones, the humans acting in these economies are also free to act irrationally. But by and large, you can expect the same behavior as "real" free economies.

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The points that I have, he refuses to acknowledge
-Gil-sellers reduced amount of gil will be important for about a day before they restock
-Market ward pricing will not be automatically adjusted
-Sellers will have no real reason to reduce their prices because someone will have enough gil to purchase what they are selling

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Prices will take time to adjust, when sellers find out that for most people that price is simply impossible to sell at (as there is not enough gil), they will adjust their price. They are also free to keep the item selling at that price and never actually sell it ofcourse. That is acting irrationally though, and by and large that will not happen.

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It is that last point that he so vehemently disagrees with. He thinks that no one will purchase the highly priced triple melded gear if the seller does not reduce their price.

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There will be some willing and able to purchase at the old price, but not as many. Because the ease with which that materia is capable of being obtained is likely not changed, supply and demand will force prices down.

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I say that the seller has no real incentive to do so. Most likely, they don't *need* the gil to survive, and will not be forced into lowering the price. People who bought gil before, will buy it again. Elite groups that kill high level nm's with rare drops will continue to corner the market on that, and they have no real incentive to lower their prices either. Crafters that have access to elite groups that spiritbond gear at a high rate will continue to double and triple meld gear using high level materia. Because they are supported by elite groups, they also will have no compelling reason to reduce their prices.

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This is simply not true as I have already explained.

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So I'd like to open the discussion into the above. Will the prices on market wards be lowered with regard to the highest priced items? Someone prove me wrong without getting mad at me and giving me the silent treatment.

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Just tell him he's right, and give him a big hug. No more silent treatment.

........ video game economy will never be exactly like real life :/

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Originally Posted by Quesse

Economy real or fake is nothing you can accurately predict. People act with emotion, people remember previous pricing, they are psychologically programmed to pay/ask a certain price. Those habits will be really hard to break over even a few months.

An item selling for 2 million now will not instantly sell for 200k in the wards. To say with certainty that it will is just a guess.

It will probably start at 800k then maybe 500k then 400k - which is still DOUBLE its 1.0 price - and then maybe go down to 350k. Maybe even 300k. It may stay there for months.... forever. There will be lots of adjustments.

One thing is certain, is that things will not be selling for LESS than 1/10th. That being the case its more likely that they will be selling for more. We can all revisit this when the game launches in April XD

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I personally side with this argument.

I will aslo redirect you to 996 posts on this topic in the original ARR Gil Reduction Thread.

Like Quesse explains, no one can accurately predict the future outcome of an economy. Anyone attempting to with certainty is fooling themselves and everyone around them. All you can do is speculate on this topic and talk of probable and possible outcomes but the truth will only be revealed by the actual event playings itself out.

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Originally Posted by Reika

........ video game economy will never be exactly like real life :/

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Video game economy is still an economy, and all that is true in general of all economies is true of all video game economies.

No economy is exactly like another, so for whichever economy you're drawing a comparsion, you will never have an exact match.. only similarities. It is those things that are true of all economies that these similarities are drawn.


The bottom line is, people are still trading... that is all you need for an economy. The items they are trading still hold value no less than anything else. I'm sure some people hold some of their 'rare' items as more valuable than a bowl of cereal which I'm sure many of you would say is more "real" than that gear. The fact that the currency is created by the developers of the video game and not some form of government makes no difference with regard to whether or not the game's economy is "real" or not.

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Originally Posted by Matsume

I personally side with this argument.

I will aslo redirect you to 996 posts on this topic in the original ARR Gil Reduction Thread.

Like Quesse explains, no one can accurately predict the future outcome of an economy. Anyone attempting to with certainty is fooling themselves and everyone around them. All you can do is speculate on this topic and talk of probable and possible outcomes but the truth will only be revealed by the actual event playings itself out.

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I can predict with absolute certainty that prices will fall. Note that these are nominal prices. Real value is determined by more complex factors, and are thus less predictable. Being ignorant of cause and effect relationships does not make them impossible to predict for everyone. I cannot say what the real value of those items are going to be, I don't know how many Iron Ore it will take to purchase a certain piece of materia. But for anyone who has doubts about nominal prices rising or falling.... they will without a doubt fall. Some by more than others. None will fall exactly by 10%.

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Originally Posted by Roaran

I can predict with absolute certainty that prices will fall. Note that these are nominal prices. Real value is determined by more complex factors, and are thus less predictable. Being ignorant of cause and effect relationships does not make them impossible to predict for everyone. I cannot say what the real value of those items are going to be, I don't know how many Iron Ore it will take to purchase a certain piece of materia. But for anyone who has doubts about nominal prices rising or falling.... they will without a doubt fall. Some by more than others. None will fall exactly by 10%.

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Thank you for pointing out the obvious...

No one is arguing against wether or not prices will fall. The question at hand is by how much, and that, my friend, cannot be predicted with certainty.

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Originally Posted by TrystWildkey

Will the prices on market wards be lowered with regard to the highest priced items? Someone prove me wrong without getting mad at me and giving me the silent treatment.

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Ok here's my analogy... We currently have Pesos, in 2.0 we will have USD. When you go to buy something in the US, you have the exact same buying power with 4000Pesos as you do with 311.40USD. What you are asking is will people sell a 4000Pesos item for 4000USD? the answer is no. You can not ask 4,000,000 gil in 2.0, for an item that is currently selling for 4,000,000 gil. Try selling an item for x10 the value right now and see how well it sells. The idea is not that difficult.

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Originally Posted by Matsume

Thank you for pointing out the obvious...

No one is arguing against wether or not prices will fall. The question at hand is by how much, and that, my friend, cannot be predicted with certainty.

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What he's telling you is that it doesn't matter exactly how much, and that redenomination has no significant effect on how much. When something as trivial as relabeling "gil" as "x10gil" magically restores everyone to the 1.0 economy, it becomes clear that the force redenomination exerts on the economy is nothing more than psychological.

This includes the gold sellers' economy, because collective gold seller purchasing power and rate of acquisition of purchasing power remains consistent in ratio with the greater player base's, if not dropping if the player base increases.

A few months down the line when 1.0 is a distant memory, I think it would be safe to say that more tangible market forces will dominate, the same market forces that control your 1.0 economy, and all this complaining will be considered much ado about nothing. Your 1.0 economy itself is evidence that prevailing prices do not persist.

That being said, even with no redenomination your 2.0 market has the potential to look wildly different. The redenomination is a nonissue. Don't bother feeling cheated.

98 posts and people still can't comprehend how this isn't going to be a big deal.

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No one is arguing against wether or not prices will fall. The question at hand is by how much, and that, my friend, cannot be predicted with certainty.

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Prices will rise and fall because of supply and demand- not because of the redenomination. Stuff is only worth what people will pay for it. Sure, some people will be douches and try to take advantage of the transition to raise the price on things, but since everyone's gil has been adjusted the same way, they will be just pricing themselves out of the market for the item they're selling. Eventually they'll be forced to lower their price until it reaches a point where it sels.

There is NO POINT WHATSOEVER in panicking about prices. Even if there are some anomalies in the first days (which there will be in part because the histories will be most likely wiped, and because demand for some items may change significantly), the market will correct itself over time as people decide how much they feel things are worth to them.

Take a college intro course in macroeconomics and you'll understand why this isn't a big deal.

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Originally Posted by Roaran

Just tell him he's right, and give him a big hug. No more silent treatment.

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I laughed when I read that because it's almost exactly what happened when I got home last night. We had a long, involved conversation (conversation this time, not an argument) about economics. He pointed out many of the things that you guys have in the forum, and a lot of other things I hadn't thought of. I hugged him, told him he was right and all was well.

In retrospect, I should have done that at the beginning and asked him for an explanation later. The man is *ALWAYS* right. :D

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Originally Posted by Promethevs

much ado about nothing

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One of my favorite plays by shakestaff imself

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Originally Posted by TrystWildkey

I laughed when I read that because it's almost exactly what happened when I got home last night. We had a long, involved conversation (conversation this time, not an argument) about economics. He pointed out many of the things that you guys have in the forum, and a lot of other things I hadn't thought of. I hugged him, told him he was right and all was well.

In retrospect, I should have done that at the beginning and asked him for an explanation later. The man is *ALWAYS* right. :D

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Hahahaha argue over a game....on a serious note unless ppl selling stuff now writes down every single price (which it changes constantly by undercutters) they wont know what to sell stuff at in ARR wards ...remember the current high prices now are driven by materia and Yoshi-P already said not to spend more gil on materias bcuz they could be worthless in ARR ..now that i think of it will crafter guilds have this reduction as well? material prices they sell wont be that bad in ARR :D

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I am operating on the assumption that in an economy where you can buy gil, behavior will not match the real world.

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You can obtain money illegally in real life just like you can in the game. Therefore the behavior WILL match the real world.

RMT have no bearing or relevance on the redenomination. It affects them the same way it affects everyone and everything else. RMT have no particular advantage or disadvantage in the redenomination, so please, just factor RMT out of your opinions.

This is why I'm currently torn;

Do I sell off all my wares now before deflation, or wait until beta starts and then unload, hoping to snag some sales before prices start to drop off?

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Originally Posted by NefGP

This is why I'm currently torn;

Do I sell off all my wares now before deflation, or wait until beta starts and then unload, hoping to snag some sales before prices start to drop off?

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It won't really matter in the end. The smartest thing to do is just carry on business as usual. Don't act any differently than you normally would.

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Originally Posted by NefGP

This is why I'm currently torn;

Do I sell off all my wares now before deflation, or wait until beta starts and then unload, hoping to snag some sales before prices start to drop off?

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Firstly: What happens in beta, stays in beta.. you will NOT have your current char in beta you will be starting from scratch. After Nov 11 you will not see your character again until 2.0 is on the market, in the first quarter of 2013.
Secondly: What i did was, I sold off all my armor, weapons, accessories of value. Reason When 2.0 hit's they may not be worth squat do to new items, redefined stats, and so on. So really what i would advice is convert what you can in to gil now. Liquid currency will not loose ANY value, items how ever will.

How SE wants you to act:

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Originally Posted by Alhanelem

It won't really matter in the end. The smartest thing to do is just carry on business as usual. Don't act any differently than you normally would.

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How SE is afraid you will act:

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Originally Posted by Twiddle

What i did was, I sold off all my armor, weapons, accessories of value. Reason When 2.0 hit's they may not be worth squat do to new items, redefined stats, and so on. So really what i would advice is convert what you can in to gil now. Liquid currency will not loose ANY value, items how ever will.

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Hmmm... I wonder why

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Originally Posted by Matsume

Hmmm... I wonder why

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Well way i see it, in 2.0 my 12mil will have the same buying power as my 120mil now. While items and materia with sky high value now, could become impossible to even give away after the change. And items and materia that you can't even give away now could have sky high value in 2.0.

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Originally Posted by Twiddle

Well way i see it, in 2.0 my 12mil will have the same buying power as my 120mil now. While items and materia with sky high value now, could become impossible to even give away after the change. And items and materia that you can't even give away now could have sky high value in 2.0.

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I agree 100% 10%

OP, that's EXACTLY how I believe it will go also. Most people disagree, but its human nature and human greed. Even if they drop prices by a LOT, I'd be willing to bet real money that they will NEVER drop to one tenth their current price, and therefore SE will have effectively caused wide-spread mass inflation.

Items that were selling for 2 mil are NOT going to drop to 200k...they just wont.

I like how people seem to think pricing is only a function of the people selling the items... Or that items will maintain their exact value after 2.0 comes out.

It's entirely possible that a 2 million gil item in 1.0 will be very trivialized in 2.0 and might not even be worth the 200k relative value.

And honestly, we'll really never know what every item in 1.0 will carry over to in 2.0... Because the entire game will be different, which means the entire economy could be very different, too.

The value of items will have to find their own balance in 2.0. And those values will only be dependent upon their place in the new game. It's possible that for a period directly after launch items might maintain a relative value to their 1.0 prices, but my bet is that depending on how long beta testing happens, items will already start shifting in value based on what people learn from playing the beta.

But as has been stated to death, since the redenomination is global, everyone will be moving in to this new economy with the same relative wealth they will have when 1.0 goes down.

I love how these people living in lala land thing that by changing the pricing of the NPC buy/sell rate will control the players greed... anyone who played FFXI knows how this is going to work out.. welcome to 3 million dollar scorpion harnesses.. why? because players can charge whatever they want for an item.. the NPCs have nothing to do with that

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Originally Posted by Twiddle

Firstly: What happens in beta, stays in beta.. you will NOT have your current char in beta you will be starting from scratch. After Nov 11 you will not see your character again until 2.0 is on the market, in the first quarter of 2013.
Secondly: What i did was, I sold off all my armor, weapons, accessories of value. Reason When 2.0 hit's they may not be worth squat do to new items, redefined stats, and so on. So really what i would advice is convert what you can in to gil now. Liquid currency will not loose ANY value, items how ever will.

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Not according to Yoshi P. Might want to actually follow the dev posts more closely before making statements like that. *everything* we have is transferring. IIRC, Yoshi said there could be a slight delay and we may need to use temporary new characters initially, but we will use our existing guys & gals for beta.

why is this thread still going x_x
this is not rocket science
supply and demand exist in any economy.
If supply and demand exist prices will always go towards equilibrium
Unless SE steps in and introduces price controls, prices will balance out to exactly what they should be

And game economies are no different that real life economies because economies are a result of human pyschology and neural decision making. And it's pretty obvious given that the entire world, including "communist" countries, are all capitalist. Even North Korea has capitalist markets.
So unless you can propose as a reason as to why people on a game are different than people in real life (you can't... because the only way to pay to play a game is to participate in capitalism), the game economy will be essentially the same as a real life economy.

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Originally Posted by Angelas

I love how these people living in lala land thing that by changing the pricing of the NPC buy/sell rate will control the players greed... anyone who played FFXI knows how this is going to work out.. welcome to 3 million dollar scorpion harnesses.. why? because players can charge whatever they want for an item.. the NPCs have nothing to do with that

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Exactly...

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Originally Posted by Azurymber

why is this thread still going x_x
this is not rocket science
supply and demand exist in any economy.
If supply and demand exist prices will always go towards equilibrium
Unless SE steps in and introduces price controls, prices will balance out to exactly what they should be

And game economies are no different that real life economies because economies are a result of human pyschology and neural decision making. And it's pretty obvious given that the entire world, including "communist" countries, are all capitalist. Even North Korea has capitalist markets.
So unless you can propose as a reason as to why people on a game are different than people in real life (you can't... because the only way to pay to play a game is to participate in capitalism), the game economy will be essentially the same as a real life economy.

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Except all items with short supply and high demand will continue to have exorbitantly high prices, and only get worse for the fact that they will still want to feel like they got 'a couple mil' off the item. And people WILL end up paying it, because they wont have any damn choice.

Prime example while we're comparing real life to video games... Gas... Gas is preposterously overpriced, but guess what? Nobody is 'not buying it'. And the price can and will CONTINUE to rise...and people will continue to buy it. They'll bitch and moan, and the seller will just laugh and reap huge profits 'cause there isn't anything the buyer can really do besides boycott, which they ultimately wont do enough of in unison to have any meaningful impact.

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Originally Posted by Angelas

why? because players can charge whatever they want for an item.. the NPCs have nothing to do with that

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Saying this is like saying a money printing machine has nothing to do with the real economy because you get your money from other people, not from the machine.

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Originally Posted by Angelas

I love how these people living in lala land thing that by changing the pricing of the NPC buy/sell rate will control the players greed... anyone who played FFXI knows how this is going to work out.. welcome to 3 million dollar scorpion harnesses.. why? because players can charge whatever they want for an item.. the NPCs have nothing to do with that

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Doesnt mean ppl will buy it for 3m.

Let's say the average player has roughly 50,000,000 gil (not really a representation just an example). The item he wants right now the most is a relic, and the piece he needs most is that 20,000,000 gil double materia item. While in the current version, he could buy it. In 2.0 he would not be able to buy it. This will happen for every item in high demand. Only a very few people with more than an average amount of gil will be able to purchase this item.

Note: We're not even including the people who would be able, but not willing to buy this item. The effect would be even greater.

The people who think they can still sell the item at 20,000,000 gil prices, will find out that there is less people able to purchase at that price. Meaning there will be more items than people willing or able to purchase. This means supply > demand. Unless they are complete morons, they will lower their prices however much until they are selling their items.

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Originally Posted by Punainen

Prime example while we're comparing real life to video games... Gas... Gas is preposterously overpriced, but guess what? Nobody is 'not buying it'. And the price can and will CONTINUE to rise...and people will continue to buy it. They'll bitch and moan, and the seller will just laugh and reap huge profits 'cause there isn't anything the buyer can really do besides boycott, which they ultimately wont do enough of in unison to have any meaningful impact.

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You're so off base on this one sorry. OVER 99% of the price of gasoline involves the costs in bringing it to you. The actual profit margin of those oil companies is less than 1%. Yet, the actual ability for companies to draw oil from the ground and transport it to customers has gotten more cost effective. The reason gas prices go up is entirely government regulation, and inflation of currencies.