NPC Prices (CPI?)

[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.