Market Inefficiencies

[Rinzler]

Let me preface this post by saying this isn't a 'bitch' post about the loot tables or anything of the sort. As someone who studied economics in college and works in a finance related field, this type of stuff interests me and I thought I'd share my thoughts with you all.

If you take a quick look through the auction forums you'll notice two types of goods:

1. Goods that can be bought with gold.
2. Good that cannot be bought with gold, and must be traded for with another good.

Option 1 is what's called a monetary system:

A monetary system is the set of institutions by which a government provides money in a country's economy. Modern monetary systems usually consist of mints, central banks and commercial banks.

The Government in our case is the BG code that determines the amount of gold that fluctuates within the server.

Option 2 is what's called a barter system:

Barter is a system of exchange where goods or services are directly exchanged for other goods or services without using a medium of exchange, such as money. It is distinguishable from gift economies in many ways; one of them is that the reciprocal exchange is immediate and not delayed in time.

You're taught very early in economics that Option 2 is the most primitive and basic form of a market, and over time, any intelligent and healthy market will transition entirely into Option 1.

The fact that we have both systems operating simultaneously, technically, is indicative of a market inefficiency. Quite simply, it shows that the market has not matured enough from Option 2 to Option 1. This could be from various sorts of reasons but for the sake of simplicity I've narrowed it down to two:

1. There is too much gold in circulation.
2. There are not enough "trade-only" items in circulation.

The fact that all the gold in the world can't buy certain items is indicative of severe inflation. It's clear that management here has no intention of solving the issue of inflation by fixing problem 2, so my proposed fix to reach a market equilibrium is directed towards problem 1.

When inflation becomes too high, a government will increase interest rates to reach an equilibrium. Which, quite simply, means it's harder to get (borrow) money. This increases the value of the currency and makes it more efficient as a bartering device.

In summary, all this talk about implementing a crafting system and loot tables completely ignores a fundamental flaw in BG:

That gold is ultimately worthless.

If you're able to correct this, you can give gold the bartering power it needs. That way, someone who wants to put in the work to loot grind (and never get drops to trade) can at least be assured that their collection of gold amounts to something.

[AC81]

Epic shops give gold meaning. Being able to grind for gold endlessly now means you can equip endless characters in epic gear that is equivalent or better than items that are currently out there. Crafting will hopefully add a level of customisation that epic shops lack.

[Steve]

Epic Shops are only a good, or of merit in giving gold meaning, up until the items it sells are bought up in such amount that they start circulating in abundance, drastically lowering the price on the 2nd hand market (take Nashkel NPC merchant items, for example, which used to be worth something when Nashkel was updated in what, 2012? Now, those items sell for 10% of what they are bought from the NPC mechants).

This to will happen with Epic Shops, because Coin is infinite on BGTSCC, which is the important point brought up by Rinzler.

You can never have a functioning economy with infinite currency. Because simply, resources are always finite. At least, in a realistic, Real Life, way.

Thus, BGTSCC is a parody of Real Life, in definite, economic terms.

[AC81]

Gold is never going to be finite in our GAME. So the system is currently as good as it can be. At least epic shops (and hopefully crafting) can give players something to strive for. For all other items, there is trade. If people are content to play on our server for long enough they eventually come into possession of excellent items (either through events or looting). There is no one on this server who can say they don't have access to epic equipment.

But really, items aren't the issue. You can solo most of the server with basic +3 gear (some can even solo high level content naked!) Aside from items, what can gold actually buy you? In my mind, that's the issue. Not items. Even that could be a non-issue, I just don't get in enough events to know.

[Wolfrayne]

Take away NPC shops.

No seriously it sounds silly but think about it. If you take away NPC shops you will force players to trade/buy/sell from one another. No hell shop no epic shop nothing like that. You want good items etc buy from ppl.

Adjust the drop rates increase gold/item drops to compensate.

[Rinzler]

So the system is currently as good as it can be.

I disagree. Judging by your forum post - you have the largest collection of epic items so I can understand why you don't want to lose bartering power. However, it's not whats best for 90% of the server when they can't buy any of what you have with gold.

At least epic shops (and hopefully crafting) can give players something to strive for.

You understand that eventually those items will be so common they will essentially lose all value?

I just don't get in enough events to know.

Another issue - who gets events is entirely subjective to the DMs.

[Steve]

Aside from items, what can gold actually buy you?

Gold is used to create Guild Hall areas. That ain't cheap. But yeah, if Coin could be more useful in Events and Storylines, it would put some alternate use value on the parody economy.

How about this gem:

The Fist normally hires out at a base rate of 10,000 g.p. Per Day...

Anyone want to start a War?!?

[Valefort]

There is an infinity of loot and even other ways to get gold, to make a parallel everyone can go in his garden and harvest as much gold as he wants.

To change this situation a possibility is to introduce costs that drain gold continuously. They can take various forms : taxes by the local IC authorithies, spell components, weapon and armor durability, thievery, food costs, drastically lessening the sources of income...

It's all possible but it means that everyone will need a constant income. Fine you say ? For you gold must be easy to get, good for you ! Unfortunately there are plenty of people who do not manage to get a decent amount of gold ever. These costs would annoy them constantly and the perspective of buying an epic item would dissapear forever.

On top of this, except thievery, these costs aren't very fun they're plain tedious. All of this to solve a non-problem ? Nope.

[Rinzler]

All of this to solve a non-problem ? Nope.

I'm not sure why you're speaking in absolutes. Your solutions are somewhat limited, the easiest solution is to increase the amount of "trade-only" drops so that they're purchasable by gold. However we know that won't happen.

[Valefort]

Why ?

[Rinzler]

Why ?

Not being able to purchase items with game currency is absolutely a problem in my view. It's a problem that you have to hope for a drop that you probably don't need. And then hope there's a person out there with an item you do need. And then hope that person with the item you do need is willing to trade you for the item you don't need.

The idea is to fix that problem with this solution:

There's an item for sale that I want - do I have the universal bartering chip to afford it?

vs.

There's an item for sale that I want - 9 items I can't trade because he has replicas of them, so I have to find the 1 specific item in the whole damn server that they want so I can get the item I need that's for sale. Otherwise, he won't part with it because gold is worthless.

Having a currency that holds enough value to buy an item off any person is a solution. It's shitty that 2 million gold pieces can't buy something off the "Trade-Only" list. That's a problem in my view.

[Valefort]

Personally I see this as a good thing since it slows down the rate at which one can acquire his desired gear. Otherwise gold can still buy you consumables and we have a bunch of those, it's never entirely worthless.

[chad878262]

I think the definition of "need" and "want" is a little skewed here...

There are people in the real world that have all kinds of money...They have stuff I will never have. They also in many cases will not sell items at any cost, but will trade for some item they really want. It is not the responsibility of the owner of am item you want to accept whatever you are offering, it is the responsibility of anyone wishing to acquire said item to obtain something the current owner wants more.

Gold isn't everything... in the real world any more than our fantasy one.

[Rinzler]

Ok,

If someone has a Jackson Pollack painting that's one thing. But someone will sell a ferrari if they're offered enough money. Nothing on this server should be as rare or priceless as a Jackson Pollack painting if you catch my drift.

[aaron22]

there are some real issues with comparing RL economics with a video game. First thing is the gold in the game comes from no where and goes to nowhere. There is no circulation. it is waterfall that comes from infinity and goes into infinity. This is the basis of why economics can not be measured here like you can in a real world.

There are also a few problems about this that i think a couple discussed. there is no trace of any basic needs circulation. there are no homes, food, drink, chairs, travel, taxes, repairs, livestock, pickles...etc. this circulation makes the local economies thrive. from here all wealth gets used and distributed about the community. this is the heart of circulation economics. there is ZERO of that here.

so looking at the economics of bgtscc and comparing it to real world economics is a fools errand. but we can look at the model we have and see "why" gold has no value to a player like AC81. well. money here does not make money. and there is nothing to buy that has any benefit that 100 million gold could buy. the most valuable thing on this server is ITEMS. he has those and collects more. he has gone beyond the needs of gold and now only works in the most valuable assets. and the great thing is, he has accumulated so much that he does not need to overpay for one of these ultra items so will willingly pass them up if he cannot gain in the longer run. its like playing poker with a person that has a million times more chips than you. you may think your doing well but in the end he will have your chips too if you keep playing. and this is not a disparaging remark to players that have gone above the realm of gold. this is a compliment to doing the right things and seeing the way and being lucky and good enough to make it happen.

so can we apply something that can temp the pockets of a 100 million gold player? i doubt it. land is about the only thing and that could get complicated.

gold here is like a river. everyone gets to dip there cup in some people have a thimble while others bring a dump truck. both are available, but only with work, skill and a little luck you too can have a dump truck.