NPC Prices (CPI?)

[Nohmaan]

I really hate selling things to NPCs and buying from NPCs- they buy my hard farmed items at 300 gil and then try and sell me a level 20 helmet for 200,000.

Is there some way to build in a Consumer Price Index for NPCs to regulate this? It would be relatively simple, take one or two of the best selling items from each market ward and build a price index relative to the sever which would have NPC vendors participating in the market. I think this would help regulate inflation of gil as the game progresses as well.

Example:

Say a vender sell steel gauntlets for 10,00 Gil and steel chain mail for 50,000. It could look at the average selling price and say the market has seen the price for the armorfitters row margin increase 15%, the vendor would sell them for 11,500 and 57,500. The CPI would also effect the selling price to vendors, meaning the sell value to NPCs would increase by a 15% margin as well.

The NPCs don't have to be competitive with prices (obviously it's better if most transactions take place on the player side) but it could add more flexibility to NPC goods and the option of selling to NPCs as well.

Seeing as to how it's a market specific measure, if mining goods are selling low and alchemy is high then the NPCs would have cheaper ores and etc while having more expensive prices for alchemic items. The prices could be updated every 24 hr earth time, and since it's a ratio + or - doesn't seem too complicated.

It's just something I've wondered why MMO's don't implement in order to help regulate the amount of gil going in and out of the game.

[Skies]

You don't want to sell your items to NPCs because they pay almost nothing.
You don't want to buy items from NPCs because they cost far too much for what they're worth.

That is working as intended. They're meant to be useable, endless, sources but you are still being encouraged to buy from and sell to other players.

[Asiaine]

The NPC prices are designed to be hard limits.


The price of an item in the economy will never drop below what the NPC will buy it form you.
The price of an item in the economy will never raise abvoe what the NPC will sell it to you for.

This is one of their ways for controlling inflation and prices.

[Nohmaan]

You don't want to sell your items to NPCs because they pay almost nothing.
You don't want to buy items from NPCs because they cost far too much for what they're worth.

That is working as intended. They're meant to be useable, endless, sources but you are still being encouraged to buy from and sell to other players.

It would still be the case, you're just looking at a player spending influenced change in the base values for which NPC items would be sold.

The NPC prices are designed to be hard limits.


The price of an item in the economy will never drop below what the NPC will buy it form you.
The price of an item in the economy will never raise abvoe what the NPC will sell it to you for.

That would only be true if NPCs sold every item, which I don't believe they do.

[Asiaine]

That would only be true if NPCs sold every item, which I don't believe they do.

They sell a LOT of basic crafting material and several high end equipment (although nothing crazy). Also the Company Stores sell a fair bit of high-end gear as well. These are some of the balances and checks put in to help put some controls on min/max prices of items.

So although they do not have a 100% hold on all aspects of the economy (which would really limit the freedom of a player economy) they do have enough controls to keep it from spinning out of wild control.

For example, you will never sew Dew Thread sell for insane prices (as you can buy it from the shops). Likewise you will not see Undyed Velveteen sell for a lot as it is also sold in the shops.

This in turns puts a soft cap on the cost of a lot of weaver made items in the level 30-40 range.

Likewise, you can buy Iron and Steel ingot in shops, so items made from those will have a controlled upper cost.

It's really only when you start getting to Level 50ish gear that there are less price controls in place, and more exposed market economy. This is good for new people (they have safe prices at low level) and high people (they can take advantage of the market for selling, or use some of their gil they earned when buying).

(And this too is balanced in a way with drops from dungeons/primals/etc. Why pay 10M for an Ivory Staff when you can get something from Ifrit/Moogle/Garuda or DH/AV/GC. Which is part of the reason why you can get an Ivory Staff cheap, even if it is the ONLY 2-h THM /BLM craftable weapon out there).

[Nohmaan]

Again, you're mentioning the few items they have added to NPC vendors at arbitrary prices. Those items will rarely sell for more in AH than at the NPC, but there isn't any regulation on the selling price. More things sell to NPCs for far less than what you make off 1 guild leve.

The point of the index would be to help monitor the factors of supply and demand in real time, and use those figures to help regulate currency flow.

And it seems that they want to have items available through a variety of means-- meaning while some good gear is obtained through primals and etc, other types may require purchasing the items from a skilled crafter.

I still don't see any good reason why the market would not benefit from NPC participation-- it would be beneficial to both new players and seasoned players. New players would be introduced into the value of the current market with NPC prices, and older players would have additional outlets for selling goods.

NPCs shouldn't be expected to be competitive with the player market, but can help regulate those values from hyper-inflating.

[Catapult]

This is a bad idea and to explain why, I need to go into some basic economic concepts (real world stuff).

What is a CPI?
A Consumer Price Index (CPI) is a backwards-looking measure of how much prices have increased in the past. Most statistical agencies produce this on a monthly basis by surveying major retailers and other institutions to find out how much things are being sold for. On its own, it is not a measure of inflation, as inflation can be impacted by a great many things.

What is it used for?
The CPI has two principle uses:
1. To assist Central Banks in setting monetary policy, which are the things such as international exchange rates and the interest rates on loans made to banking institutions. For example, the Australian Reserve Bank has a directive to try and keep inflation around the 3% mark, which it uses the CPI to help indicate.
2. To allow the indexation of debts that do not accrue interest (although statistical agencies generally discourage this practice).


What you are asking for is not a CPI (I don't want the devs to get a confused message from the community reps here). What you want is to turn FFXIV's market wards into what we call a completely free market-based economy.

Definition of a perfectly free market:
All participants operate in perfect competition with no interference or regulation from the general government. Products are sold at what the market decides is an economically significant and acceptable price. Those who cannot compete are driven out by the market place. The marketplace trends govern inflation.

The problem with a perfectly free market:
Social issues can arise when a market is left to run on its own. In reality, the perfect competition such a model requires cannot exist because of issues such as collusion and the formation of interest groups. Without regulation by the general government, the inflation spiral can get out of control and create barriers for new people to enter the market.


In this game, the FFXIV development team plays the role of the regulating general government in a market economy. While they do not interfere with market prices explicitly, they do implicitly through the use of taxes and subsidies. They use their *cough* government resources *cough* to ensure that there is a certain minimum standard in certain industries, specifically those that are fundamental to basic operations. For example, placing a price ceiling on Copper Ore or Undyed Velveteen. This means that people who wish to enter the market using these products will still be able to do so if the market gets out of control and simultaneously provides the market an incentive not to get out of control such that it causes crafters to rely on "government" resources - the market doesn't make a profit from this.


If you take away this regulation and allow the market to control prices and inflation on its own, affordability would stand to quickly get out of control, having potentially foreseen and unforeseen consequences. Once consequence I can envision is a player coming back after just a month out of the game to discover the 7 million gil in their wallet is suddenly only worth half of what it was when they last logged off. (We saw an example of this in Germany during the great depression when it became cheaper to cover your walls in cash than to buy wallpaper. Kind of want to avoid that.)

This gets back to why statistical agencies measure the CPI. If people didn't understand anything, I'm happy to clarify and answer questions.

[Nohmaan]

The CPI is a key indicator of inflation rates, you're scoring the inflation in price of goods in the past vs. in the future. What I'm asking for IS a price index, so that the rate of gil required to purchase each item in each field has a mark on the rate in which gil is being given and taken by NPCs.

I'm also not asking for a free market system, while I would like to see NPC values inflate and deflate as needed there doesn't need to be a removal of certain hard or soft caps at some point. But having NPCs with items that are at set values isn't going to help a whole lot when those vendor items become outdated and useless- meaning their price values have no consequence since it's a good people don't want anyways.

Central Banks use the information to decide when to print or remove money from the system. NPC vendors (in addition to taxes and airship fees, materia melding, etc.) are the money printers in the game. And since there are unlimited ways to introduce new gil into the system, it needs to be able to be removed from the system to curb that inflation, and this is just one measure that may help.

[Azurymber]

i think the idea here is more about using NPCs to regulate inflation and deflation than using a cpi index to match all npc prices to market prices.

And this is not an argument for a total free economy because if it was you would eliminate NPCs out of the picture

The only problem i see with this idea is that it would lead to constant inflation overtime. And at some point RMT would take advantage of the system to totally mess up the economy.

For example if I was an RMT i would pick one ward (prob food for fish) and make sure i have as many bots as possible in it. I would then spend a day selling stuff to myself at extremely inflated prices. This would drive up npc prices and payouts by a massive % compared to other pieces of gear. I would then unload thousands of items i have stored up on RMT characters to the npc, make hundreds of mil of gil and hold on to it. The wards would drop down to former prices (due to supply and demand without a major increase in overall currency) and I would have a lot of gil when other people don't. then sell, get rich, repeat.

so while its an interesting idea, i think it would take a lot of work to regulate it. Thats not saying it can't be done. But since I'm pretty certain the FFXIV team lacks anyone competent in economics, it would probably fail.

[Asiaine]

I would not say they lack anyone competent in economics. I spend a fair bit of time examining what the NPCs buy and sell, and at what rates. There is a definiate logic behind those settings. SE is doing a lot of work (and succeeding well) in controlling the prices of craftable items for gear below level 40.

This is making it very simple for people to level up crafts to 40.
This is making it very affordable for people to buy equipment up to level 40.
The relaxation on upper tier goods costs is allowing a more dominant free market for those items (also influenced by the presence of non-craftable items).

There is a lot of work and tweaking being done, and they are doing a good job at it.

(If you do not believe they are doing a good job, think of this: How many people have 10s or 100s of millions of Gil. Now think of how the price of most materials has hardly budged over the last 6 months. The biggest 'movement' is in Dungeon Drops and Materia (especially Int materia when Garuda was in 'easy' mode)).