Market Economy is a Mess - Possible fixes

[kukurumei]

Gil is still flowing between players. If you aren't selling what people are buying, that is not SE's fault. If you are buying high and selling low, that is also not SE's fault.

That's is one the indications used to track economies in the world. Basically Market forces are a force of nature, and thus can be destructive as well as beneficial. That's why the government(SE) should directed towards positive instead of destructive.

Gil flow always happens, but at what rate, how the rate fluctuates and in what direction, to which areas, etc. Devil is in the details as they say. And in real world economies, that's how the Fed controls a good amount of their policies, the money flow.

The answer here is: "why are people buying high selling low?"
Is this a good thing. Can we fix that. etc.

[Kaladin240]

Right now, the economy has not gone back to normal because of the rumors(?) that housing costs will be decreased soon. So those saving money for housing don't know how much it will cost. Therefore any money left over after they buy a house has not re-entered the market. It will all settle down once the FCs that want a house, have a house.

[frostmagemari]

A big problem in the economy also has to do with the fact that there's absolutely no competition in materials. There's no competition to get that Electrum ore or the crystals, so there's no limit on the Electrum ingots, so there's no limit to the amount of Electrum-based items on the market. (Just using Electrum as the example)

There is a -slight- limit on Darksteel and other things like that, but only in how often they can be gathered; You can still have fifty people mining the same node and collecting the maximum amount of darksteel from the node, and now with philosophy items being dime a dozen because of more ways to get the tomes, there's little to no limiting factor in regards to the Darksteel/Vanya/other sets either.

The problem with the economy existed well before the philosophy item situation, but the metaphorical dam broke once the only materials that were subject to a limiting factor were finally more accessible.

I doubt it can happen at this stage, but the only way i could see even trying to patch the economy is to do two things...

Change Botany/Mining/fishing
*Create dozens of more nodes in each zone and randomize which one becomes active; This stops the 2min circuit gathering that exists now
*Change the nodes so they're not personal. If i don't get to the node first, i should lose out on that node; This would create a limit on the marketplace and allow materials to be worth something.

[OldGeezer]

Since 2.1 Philo items have crashed to severely low prices. Players can't seem to stop undercutting causing items that once sold from 25-15k to 5-3.5k. This is a huge issue considering Philo items were a go to source of income for adventurers.

That's supply and demand. You add more tombs in the game, prices drops. It's only an issue to people who no longer need DL gear. It's a niche market, it won't break the system.

1. Introduce more crafting recipes that call for more Philosophy items.

2. Add a new token specifically for crafting items

3. Add new Philo items for new crafting recipes

4. Add new armor / items to spend Philo items (potions, food, etc)

My question to you is this. What is the purpose of this new gear/item? What function will it serve? Yoshi has said crafted gear will not compete with end-game raiding gear. You can gather with the gear currently available and crafters can already HQ all recipes if they play their cards right? There is no market for this new gear, it's only purpose is to make philo items scarce again so you can have the "good-old days" back. The good old days are gone. Time to move on.

[toonces_the_driving_cat]

Yoshi really said that? Might as well hang up my crafting tools then.

[kukurumei]

Yoshi really said that? Might as well hang up my crafting tools then.

Yes he said that. Yoshi/team believe that housing and vanity and pvp will save the crafting market. They screw up housing and somewhat pvp(i70 is token only)

And full circle back.

They don't know what they're doing in terms of economics that's for sure.

[whiskeybravo]

It's still bad because there's no futures. The deflation has slowed but has not stopped. Luckily we have no debt/lending market so it won't cause an apocalypse, but that doesn't mean it doesn't make life miserable for people.

The futures is still uncertain, and that generally doesn't cause good things for the economy. Deflation to stagnation is still a bad weather report.

Basically if people don't know how much gil cost a week from now, they won't spend, and if they won't spend, then eventually it'll just cause another bubble to pop, and another, and another.

Equalization is not achieved yet. There is no such thing as a buyer's vs seller's market. That's something you talk in industries, not economies. Economy is always bad in either event, and really bad if there's hyper-inflation/deflation(which was a month ago)

The future is always uncertain, change can happen at any moment. Future expectations are what drives spending and saving.

*Price Deflation* occurred for numerous reasons, I think we all agree the major reasons are an influx of items being sold and a general increase in supply of both tomes and high-end crafting mats (to generate income) coupled with a decrease in the demand of said items and need to increase savings. There are massive incentives for saving right now [the future expectation of buying a house, loot drops], and virtually no incentives to spend. *Price Deflation* on it's own is a natural phenomena, alone it is not an indication of "good" or "bad". Saying the prices before, or now, are good, or bad, is an opinion with no real base of comparison.

"The cost of Gil" is an individual assessment. Since we are not getting any sort of hourly wage or salary in this game (consistent income), it's up to the player to determine how much gil they can earn in a given time frame and even how much gil their time is worth. Philo mats prior to 2.1 were selling for around 18k on my server. That's at least 2 runs of one dungeon or another, say 30 mins each run. So those players time was worth 18,000 gil per hour by the buyers. Key phrase: by the buyers. Now philo tomes are more easily attainable, and philo mats and the buyers say, "Your time is no longer worth 18,000 gil per hour." And at some point the new magic number of 3,000 gil was established. The sellers still need to sell the items if they can't use them, but the buyers have more options for obtaining them.

I don't think it's possible for there to be hyper-inflation in this game, not economy-wide anyways. That would require a huge amount of gil being dumped in the hands of every player, and there's just no device that can accomplish that in-game. Prices were previously *highly-inflated* (bubbles) due to stockpiles of gil from long time players and the early crafters that pretty much set the prices. There was no *future expectation* for gil (housing was known, but not the prices) so purchasing decisions were not as wise as they are now.

Once gil is dumped from the economy via housing purchases, prices are still likely to remain low. They will return to higher levels over time if no other *future expectations* cause gil to get stockpiled up again.

[whiskeybravo]

Basically Market forces are a force of nature, and thus can be destructive as well as beneficial. That's why the government(SE) should directed towards positive instead of destructive.

I don't want to get too OT here, but this is a flawed perspective. Governments produce the most destructive forces in the entire world, the human race could be annihilated in a matter of hours. No private individual or company could come close to reproducing what the govt's of the world are truly capable of. Destruction is not profitable, and the private sector would never touch it. (think flood insurance lol)

[kukurumei]

The future is always uncertain, change can happen at any moment. Future expectations are what drives spending and saving.

*Price Deflation* occurred for numerous reasons, I think we all agree the major reasons are an influx of items being sold and a general increase in supply of both tomes and high-end crafting mats (to generate income) coupled with a decrease in the demand of said items and need to increase savings. There are massive incentives for saving right now [the future expectation of buying a house, loot drops], and virtually no incentives to spend. *Price Deflation* on it's own is a natural phenomena, alone it is not an indication of "good" or "bad". Saying the prices before, or now, are good, or bad, is an opinion with no real base of comparison.

"The cost of Gil" is an individual assessment. Since we are not getting any sort of hourly wage or salary in this game (consistent income), it's up to the player to determine how much gil they can earn in a given time frame and even how much gil their time is worth. Philo mats prior to 2.1 were selling for around 18k on my server. That's at least 2 runs of one dungeon or another, say 30 mins each run. So those players time was worth 18,000 gil per hour by the buyers. Key phrase: by the buyers. Now philo tomes are more easily attainable, and philo mats and the buyers say, "Your time is no longer worth 18,000 gil per hour." And at some point the new magic number of 3,000 gil was established. The sellers still need to sell the items if they can't use them, but the buyers have more options for obtaining them.

I don't think it's possible for there to be hyper-inflation in this game, not economy-wide anyways. That would require a huge amount of gil being dumped in the hands of every player, and there's just no device that can accomplish that in-game. Prices were previously *highly-inflated* (bubbles) due to stockpiles of gil from long time players and the early crafters that pretty much set the prices. There was no *future expectation* for gil (housing was known, but not the prices) so purchasing decisions were not as wise as they are now.

Once gil is dumped from the economy via housing purchases, prices are still likely to remain low. They will return to higher levels over time if no other *future expectations* cause gil to get stockpiled up again.

No...the sign of a good economy is predictability. Why do you think we're such a big stickers in CPI, GDP, inflation percentages. You know banks run on predicting the future. In fact the whole world works on predicting futures!

How much I decide to sell ore is based on how much I expect to get for it, and how much I make more, expecting their demand, and expecting the cost of things I buy with that gil after the ores will sell, etc.

On the cost of gil, or CPI for virutal world. No it's not an indivual. You need to pay your repair bil, you need to buy food(or not) you need to teleport(or not) you need etc, on top of wants (should I meld or wait), equipment (should I keep wearing my lvl 35 armor, or try for dungeon drops, etc)

Hyper inflation/deflation. It exist. in 2.0 to 2.1 within a week we had hyper-deflation. About 20% drop in across the board markets, a credit freeze, and a fire sale.

Ad it does matter because markets interconnect if not directly, then indirectly through gil flow(credit froze from housing prices), because one bubble will pop another bubble, and another etc (People lost the market in coccoon, so they moved to parsely because it was safer, which crashed that market, which moved to buttons, etc)

everything you said...has no purposes to how economist view the markets. You aren't even in micro economics league with your example. Macro Economist look at a completely different set of data. We don't care about philo prices beyond the drop, or the fixes beyond the gil flow.

They're a tiny market that have very little causality. You're mixing up your discplines. Economics is not about someone's daily life, it's about someone's daily life being ruinined with everyone else in the world.

I don't want to get too OT here, but this is a flawed perspective. Governments produce the most destructive forces in the entire world, the human race could be annihilated in a matter of hours. No private individual or company could come close to reproducing what the govt's of the world are truly capable of. Destruction is not profitable, and the private sector would never touch it. (think flood insurance lol)

You're mixing academics with drama. Government doing stupid things for stupid reason, and personal greed, pandering, election, and lobbying, have no relation to the economics themselves.

[chumsy]

beastmen dailies are a good source of gil, especially as you get to the higher ranks. But still doesnt solve the problem with crafting. Everyone is at ilvl 90 gear, theres no need for materia or crafting mats. Unless they add ilvl90 items with sockets we might see materia prices rise again.