It's time to reevaluate the idea of adding a PLEX/Chronoscroll-like system to FFXIV

[Tiggy]

Explain how inflation happens then.

No new currency is minted with the introduction of a PLEX-type system.

So how does inflation occur?

Did you not read that article? I don't have to regurgitate what is already written in that link.

[Bishop81]

Did you not read that article? I don't have to regurgitate what is already written in that link.

This one? http://services.runescape.com/m=foru...46,68,65222901

Funny that link also has people disagreeing about whether bonds are to blame.

I don't think that can be considered "inflation", all that happened was that a new good was introduced. People switch from producing a certain good A, to the new good B (i.e. bonds). Prices of good A increases due to reduce supply.

Price fluctuations like this happens all the time, every time something new is introduced into the game. New armor that is very good and requires a motherlode of electrum ore? Electrum ore surge in price. Players try to cash-in, switching production from cobalt ore to electrum ore. Cobalt ore raises in price due to reduce supply.

[Tiggy]

Funny that link also has people disagreeing about whether bonds are to blame.

People disagreeing on the internet? You don't say.

I don't think that can be considered "inflation", all that happened was that a new good was introduced. People switch from producing a certain good A, to the new good B (i.e. bonds). Prices of good A increases due to reduce supply.

Except that doesn't appear to be case. People didn't stop using those cheaper items moving on to others instead leaving the supply lower. They just got more expensive and the demand on them stayed the same. Meaning the supply and demand relationship for these crafting items didn't change but per item price went up. Inflation.

[Bishop81]

Except that doesn't appear to be case. People didn't stop using those cheaper items moving on to others instead leaving the supply lower. They just got more expensive and the demand on them stayed the same. Meaning the supply and demand relationship for these crafting items didn't change but per item price went up. Inflation.

And I'm telling you, it happens.

Say they introduce a new ore, and the ore is need for new popular weapons. New ore will be in high demand. Some players stop mining old ore and mine new ore. Old ore price increases due to lower supply.

Low supply = higher price (assuming no change in demand)

Problem?

What you are calling "inflation" is just the market changing as the types of goods available for sale changes.

[axemtitanium]

People disagreeing on the internet? You don't say.



Except that doesn't appear to be case. People didn't stop using those cheaper items moving on to others instead leaving the supply lower. They just got more expensive and the demand on them stayed the same. Meaning the supply and demand relationship for these crafting items didn't change but per item price went up. Inflation.

I think you have a fundamental misunderstanding of what "inflation" means as an economics term. Inflation only refers to buying power: when inflation is high, buying power increases at a slower rate than the average price of goods. When inflation is low, your buying power (per unit currency) remains steady or slightly increases compared to the rate of increase of price of goods.

Imagine a hypothetical scenario where all RMT activity (bots, gil buying, account hacking, tellspam, etc.) were completely eliminated tomorrow by some magical force. What do you think would happen? RMT botting activity causes inflation because it injects massive amounts of gil into circulation, as well as trivializing the supply of certain basic goods like shards, fleece, etc. It also allows the buyers of RMT gil to compete to pay a premium for certain extremely high-end luxury items like rare minions, HQ crafted equipment, materia for melds, the prices of which are all driven up by pent-up demand and surplus of gil concentrated in the hands of the "rich". If all RMT were eliminated instantly, it would have a complex impact on the economy in which low level basic goods like shards and fleece would increase in price and extreme luxury items would decrease in price as a result of natural redistribution of wealth through "normal" commerce. It's easy to misconstrue that Runescape forum thread to suggest that the introduction of Bonds caused inflation, when in reality, it merely caused the economy to normalize itself along producer and consumer lines. Currently, it's impossible to make a profit in FFXIV by producing low level goods because you're instantly out-competed by RMT bots who can afford to undercut you forever. If all bots are eliminated, the price of shards would invariably go up (this is not "inflation") since it would now actually require effort on the part of real players to produce this basic good. However, this ultimately stimulates the economy because the players who go through this effort are rewarded with larger profits than before.

I still see people perpetuating the myth that PLEX could be easily defeated by RMT if the RMT merely lowered their prices. It doesn't work that way. Are you mad when you get undercut 5 minutes after putting something up on the Market Board? By putting players in competition with RMT, you have every single PLEX-buying player in direct competition with RMT who will undercut the living hell out of the RMT constantly. THAT's why PLEX beats RMT.

This is explained in more detail in this post (follow quoted post)

[Tiggy]

I think you have a fundamental misunderstanding of what "inflation" means as an economics term.

I'm afraid I don't have that problem. In the example I was referring to no new money was added to the system, but the buying power for the items in that example was no longer the same. Their prices inflated. There is more than one way to create inflation. It's not solely through minting new money. It's about how much buying power a dollar/gold has. In the above example the buying power clearly decreased for the items presented.

http://en.wikipedia.org/wiki/Inflation

An excerpt from the above article.

Economists generally believe that high rates of inflation and hyperinflation are caused by an excessive growth of the money supply.[6] However, money supply growth does not necessarily cause inflation. Some economists maintain that under the conditions of a liquidity trap, large monetary injections are like "pushing on a string".[7][8] Views on which factors determine low to moderate rates of inflation are more varied. Low or moderate inflation may be attributed to fluctuations in real demand for goods and services, or changes in available supplies such as during scarcities.[9] However, the consensus view is that a long sustained period of inflation is caused by money supply growing faster than the rate of economic growth

So while clearly adding money is the primary and definitely accepted general form of inflation it is however not the only form of inflation. If you're going to continue to try and "school" me on inflation then please try to understand it yourself first. The example above is absolutely an example of low/moderate inflation as referenced in that wiki article. Everything you just described is just explaining WHY the inflation happened. It was in no way an explanation of why it isn't inflation.

You guys need to accept that some inflation happens in these types of systems. By ignoring the obvious you aren't building a solid case for yourselves.

it would have a complex impact on the economy in which low level basic goods like shards and fleece would increase in price and extreme luxury items would decrease in price as a result of natural redistribution of wealth through "normal" commerce.

This is only partially true. Yes, the low level items they bot farm would jump in price due to a decreased demand.

However, in FFXI when they cracked down on RMT the price of luxury goods got higher because it turned out those RMT were gather those items as well so now the supply was considerably lower thus raising prices. The scorpion harness was a prime example of this problem in action.

It's not as simple as you think.