Game Theory on ingame economies

aVaLON_52

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I've actually played an MMO that died because the ingame currency eventually became unstable.

I suppose that would be possible in Entropia; but it would only be directly reflective of real world economies (which isn't all that great to begin with).
 

Kosh

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When I saw Game Theory in the title I was expecting something completely different (i.e. mathematical modeling of strategic behaviour ingame).

Not really interesting. Moving along now.
 

BenCoyote

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Economics in a cartoon, or how to make your ped the smart way and not the hard way.

Okay, so this is about a different type of ingame economy than the RCE type (wow), but still an interesting watch (except for the last two minutes, which are just a commercial pitch):

https://www.youtube.com/watch?v=fDfNoCjtXvQ&feature=em-subs_digest
IN fact I've seen and reseen the whole video six times over already and I'm going to state obvious fact about people and economics.. Most people don't know how economies are supposed to work, but the smart ones do..

Let's take our own current game (EU) and take what is known in this game. And i fact I'm going to state this forfact: Most of the players who are putting stuff up on all the auction houses in game, are really over inflating the prices of items that should be more affordable to most players. and this comes back to what Mr. Matthew Patterson (A.k.a. MattPat states in this video. if a game becomes over inflated and no one can afford anything to use, or to purchase, the market at this point stagnates, thus causing fewer and few sales..

I will add to this in that "Pure Profit" does not matter', but rather, sales do matter, and i will give you an example of this in the form of another video (Which is interestingly enough, a Warner Brotehrs Cartoon).

http://vimeo.com/27001423

If you watch this video the whole process of mass production and mass consuption is explained.. and that whiole many people try to keep the costs high in order to make profit, the reality is that in order to make more sales even at a lower price, the person has to produce more of the product for the people to buy..

This is really how economics should work, but in the business model that we have, the reverse is opposite, and hardly very few sales are made of a product except on what I would call frivolous purchases, but some of them are necessary to continue playing the game..

Take Guns for instance.. Many guns on all planets currently are way over priced (Take a look at the Markets and cross compare, and in fact this shows that while on some planets the prices are market up too high, on others where the product is not produced, the end result is that the price is suffering from a case of Hyper inflation which causes any and all markets to stagnate. No one buys, and thus people lose the auction fees for not being able to seel their product (and this is how Mind Ark gets their money for the non sale of items..

Now if we took that and lowered our prices even by one ped, the end result would be sales would be made.. and all in the name of driving an economy forward. But then this is where everyone who over inflates the rices has got it backwards.. They thiknk that "Pure profit means instant wealth, the actual truth is, it's sales of a product that moves the goods and not the actual price a player wants..

Let's take a good example here and I'm going to break it down iwth math..

Person A makes 5 guns and sells them at 47 ped wiht a 48 ped buyout..
Person B makes 5 guns and sells them at 46 ped with a buy out fo 47..
(and just for fun)
Person C makes 1 gun and sells it at 48 with a buy out of 49..

Now if you were the producer of said products and you were player b, then you would be the one making the most money as if all your guns sell, then it's 47 ped x 5 or 235 ped..

If you were Player A, you might sell 1 or maybe 2 guns and even that would neet you some money but not enough to make some more of the product and thus you would start losing money. as the guns you wouldn't sell would be returned to you and you lose the money..

and if you were player C, and you set the price too high, then you actually already have paid MA their money and get no sale. So at that point it's a lose lose situation..

In short, the sales in this game do matter, and i nfact I'll give you an in game example of this..

A player jsut yesterday wanted to buy one Mining finder, and after showing him a list of the proiducts that I had, the player actually bought 2 of them and at a slightly reduced price.. thus allowing him to use both finders both and get a good deal in the process. so that he could afford them both.. Many Players who set the price too high or ask too much will often get a no sale..

Also another good example is tha the old addage about one man's trash is another man's treasure, also rings true..
Let's say that you're an ore and or enmatter buyer and soeone wants to sell you growth molecules and you say no, well then you just shot yourself in the foot, cause what if an order comes in and you get paid a good price for filling that order? Then you just lst money for not doing that.. Two weeks ago, a socmate of mine showed me an oreder on calypso and I wend down and having the materials in hand I sold the fertilizer i had at 104.. then I turned around and bought growth Molecules at 102.00%. I got four sales, meanwhile the other ore buyers who were offering to buy, never made a sale in the whole 4 hours i was down there..

In the end, I filled those orders and came home with over 600 ped in sales..

The end result is this, anda again i will state this..

Sales do matter, Profit will come with multiple sales and in the end, you'll lcean up that way..


now if you dn't understnad then maybe you should enrollin a college course on the sudy of economics.. might help you realize that while this game is an RCE and it's a game, the end result is that I'm your competitor, if you want tosurvive, you're gonna have to beat me at my own game. by offering better prices to people like the sweaters, and offering guns for trade with sweat.. after all sweat does have an MU and I'm basing my prices off of what i use the sweat for.. not what the people are asking..

So if you say I'll buy this players sweeat for x.xx ped and I say well I'll over 30 cents more than that, then guess who loeses/ Not me, as I just got someoen to come to me and sell them the sweat.. (or if they are wanting a gun and are willing to pay in sweat, that's just as good (Remember this game is about being creative and my "Guns for Sweat Policy I started back in 2009 works and works so well that people are getting quality products at prices that they can afrford, (and agian I am basing this on what i use the sweat for..

And yes I'm a welding wire crafter, I craft welding wire on a daily basis, but then I sue that metal res I create to make items people can use, and could afford with the proper pricing..

Ergo, I buy at a fair price and sell at one, and even though I don't make as much on each product, If I mass produce more of the product than you do, and I sell them all and you don't who gets to continue and who doesn't? The answer is right ther ein that video Link I put up..

and for those who stil haven't gotten it, watch that video again and again, .. and get competitive, cause if you don't, expect to keep sitting on the sidelines and wonder why your stuff isn't selling..

So my advice to the playes, change the cdirection and make the sale, those who do succeed and get rewarded, those who don't won't last long..

It's as simple as that.. Now then anyone want some Bavarian Cheese? It's good, yes?

Benjamin Ben Coyote (Callsign "Coyote")
a.k.a. "The Blind Sniper"
 
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