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  1. #1
    Mar 2016
    tyires tyirepl tyirepl

    Determinants of supply and demand, economic activity in current state of market and how to improve them.

    Circa 243. years ago fine Scotsman Adam Smith created his magnum opus generally referred as “The Wealth of Nations” which later became a fundament of classical economics I am a great supporter of. All free market solution supporters and liberals (or libertarians) consider this book as a Bible and the creation of “invisible hand of the market” metaphor. This metaphor today is being understood in many ways but in general reflects the belief that by acting to maximize our own individual profit we also create unintended social benefits.

    I personally believe that invisible hand of the market works perfectly in economies which are not overwhelmed with unnecessary prohibitions and where market participants have opportunities and will to act. Market is created by creators of demand and creators of supply. Those two great powers collide resulting in live and vibrant economy. To have it more clear, supply and demand is determined by current needs and general state of the market. When there is no need – there is no market.

    But to be able to speak about market (especially when we talk about virtual one) at all we must first clarify the boundaries of it. To have market and economy where supply and demand can interact we must indicate the sources production, consumption and investment.

    So far our virtual world does not provide us with many possibilities to be economically active. We produce mostly Explosives, consume universal ammo (with no source of production!) and invest in shares issued only by MindArk.
    What we need to do to have our economy super vibrant and get rid of scenario “buy ammo, shoot, TT loot”?
    It’s simple - ALL economical activities in game should be the subject of free market powers. Let invisible hand of the market work! Let us work to maximize our own profits! Besides that we will unintentionally create the good that we all need – markup.

    But what do I mean by that? How all activities in game can be a subject of free market power? Well, to keep it simple – every single item in game required to acquire loot should be produced by players using raw natural materials and looted items supplied by game during player activities and should not be infinite.
    Sounds tough? It should! Making money is not easy! But let me remind you fifth of the Ten Principles of Economics by G. Mankiw - Trade can make everyone better off.

    Trading allows to create specialization in products that you feel most comfortable with and can be beneficial for both when you trade it with each other. To keep it simple – you can be profitable at ammo crafting when your counterparty will surely make some money hunting or loot needed item using your ammo – beneficial for both. You can be profitable at fruit growing in your land plot and by trading it your counterparty will get crit chance increased from his pet fed partially by your fruits. Possibilities are endless! All you have to do is to recognize the need and fill the empty space.

    Every single item in game required to acquire looted items should be produced by players using raw and looted materials and should not be infinite. That is how we would keep the economical circle always vibrant and alive.
    Imagine markup on Lysterium when it would become required to craft laser ammo. Imagine markup on Gazz when together with other materials it is needed to craft survey probes. Imagine markup on Wool when special warm clothes are needed to enter snowy and cold areas. Imagine markup on all those materials needed to craft all weapons, plates, clothes, furniture for your house in your land plot, pet food, human food (instead of pills could provide short term buffs), armors, decorations, rings, cosmetics (bring back Entropia Fashion!). Imagine all that markup on items needed to craft new parts needed to make new vehicles, spacecrafts etc, houses, buildings, shops, malls etc.

    Imagine planet specific loot and items and interplanetary trade. Imagine that all of us can invest in buying a land plot, setting up a shop and sell crafted or previously bought items.

    If the plan is so smart and perfect how would we deal with all those unlimited super-uber items owned by the most skilled players? Should we make them all limited, get rid of them, delete it and pay the owners some compensation? Absolutely not. Ask yourself how you currently repair your item – you basically re-fill its value by transferring PEDs from your card to TT value of item. A simple change is needed. Your UL items should become craftable and limited (most likely with some super rare items required) but as you already have your item UL the proposition should be given to uber-players to be able to repair their UL items with some specific kind of loot – not with PED. Of course some of the items that now have the status of unique should stay unique. It will make you pay some markup but I can guarantee that vast part of it will be compensated by the increase of markup in your own loot. Things will be kept balanced – every smart player will profit on that.

    MindArk – imagine you could have it all taxed. Like a government that taxes entrepreneurs. Introducing small sales-purchase tax when there would be millions of transactions from hundred thousands market participants would make you so rich you could balance the loot to be close to 99,99% TT return in the long run.
    I am not saying that this would be easy. It will require ton of work, planning and coding. To make that possible we would need good planning, skilled programmers, team of experienced macroeconomists, art designers, marketing specialists and process managers.

    We could have very alive and vibrant economy, planet full of entrepreneurs, shop owners, constructors, miners, traders, hunters, pilots, land owners, farmers, beauty specialists, advertisement creators, advertisement area owners - all working together in the environment created by free market powers – changing supply and demand, changing prices, changing fashion. We don’t even need political system – all we need is sustainable MindArk to introduce it and communicate with player base.

    MA – think of it this way: If you will not do it someone somewhere will try to make it before you and that will be your end. You have a very dedicated fanbase, you can figure out a way to find a way to finance that. You can perhaps sell some shares that would pay out a small share of the total future tax income. It all can be calculated and planned. You need that and we need that. Ask yourself how long this project will last basing only EP heavy addict crafters, strongbox gamblers and fanboys who depo to have couple of hours fun killing Sand King.
    Feel free to give me your critique here – this is just fast written sketch of what could be if MA treated us seriously. Give me your ideas, push them to deliver. I am not naďve and fully aware of how they work and how incompetent they are but if there is 1% chance they will change the economy – I can still give that that one last chance.

    Or if MA don't give a phuck let's just have some "what if" conversation on how EU econoy could be great.
    Last edited by Geralt; 11-14-2019 at 13:40.

  2. #2
    Elite Bones's Avatar
    Sep 2006
    Gender | Ingame
    Male | Male
    In the Refrigerator, Behind the Mayonnaise, Next to the Ketchup, and to the Left of the Cole Slaw
    Bare BareBones Bones
    Skillin Villains
    I do not think you will find many dedicated players that will disagree with your posting , of creating markets regulated only by supply and demand. One where materials are used within the professions to further create and disseminate products that in turn , themselves help to further markets.

    Sadly I have come to find that MindArk is not planning to further the original plan , or vision it once had. I am not sure if it is lack of resources or lack of will that has led the game to this point , but to me its quite obvious this is a stopping point for many. Myself , I will burn through the resources I have available in my 13 year account , along the way I will find the next company that will further MindArks original vision , it seems that there are some options.

    It would take a complete reversal of the current policy of creating items that are avatar bound , and markets saturated and diluted by unlimited flow of the same resources. Every mob in the game drops the same materials , and every avatar farms these same materials diluting the markup to nothing.

    The possibilities are endless and quite frankly there have been countless threads created here on PCF , not to demand changes or force MindArk to change direction. But , to share from the vast knowledge base their original vision has created. Instead , MindArk at every turn has ignored the existence of their own playerbase for years at a time. Those that create these ideas , do so for the love of the game , not to get an advantage over others or the game.

    Where this game is going is any ones guess , but it is doing so at the risk of its demise if it does not take a breath and recognize its base is looking for something that Mindark is not.
    Great minds discuss ideas. Average minds discuss events. Small minds discuss people.

    Eleanor Roosevelt
    11 October 1884 – 7 November 1962

  3. #3
    Mutated mastermesh's Avatar
    Apr 2007
    Gender | Ingame
    Male | Female
    Billy Bar
    Maria Mesh
    tAS->Entropia Asia Cadets->Entropia Asia->Zoku->NBK->NBK Entrepreneur->Kaos->the Ministry
    Blog Entries
    Imagine mindarks second bankruptcy

  4. #4
    Supply is there my friend but u forgot about the "Keynes demand " In Keynes demand its required government intervention or in this case MA intervention .Its just not enough of people playing right now so the demand can not end up in equilibrium. Take for example 10 years ago much more players played the game and the game and the market worked very well. They really need to advertise that is the real key to the problem(they have to invest huge amounts in advertising wich they will later on benefit several times , example goverment expenditure multiplier). An increased demand will automatically increase supply as producers (crafters etc) wich will lift the prices of all other goods like mining etc. and in the end the value of our gear. Supplyers will have even easier to profit if there is a higher demand and the prices of crafting products will not be low like they are now.
    Last edited by The MeanMachine; 11-26-2019 at 21:28.

  5. #5
    Elite billairboy's Avatar
    Mar 2007
    Gender | Ingame
    Male | Male
    Örnsköldsvik, Sweden
    Bill Airboy Ivanhoe
    I have said it before, the big problem is that to creat a bigger demand we need more decay on everything. Cloth, vehicles and simliar items should decay more. Items should also have "time decay", decaying not only based on how much you use an item but also on the age of the item. Now you can buy a vehicle and you can pretty much use it forever with no need to replace it.

    I think more decay and some kind of max life span of items is the only solution to get a better balance of the demand and supply and by that a better in game economy. But, more decay is not popular concept among most players so it will probably never happen.

    An other problem, that is even a bigger problem on smaller planets like Arkadia, is that I think we have too many different resources (ores, enmatters) and components. It believe the game should benefit from a "consolidation" of resources and blueprints, cutting down on the numbers of different resources and components. Take out some recources and replace them with other already ingame, or take away two and replace with one new in cases that is better. With so many different types of recources we have today it's hard to get the volume need to create a working market on the smaller planets.
    Enhancers, Cloth, Furniture
    The Kallin Shop on Arkadia , Celeste North 4, Celeste North Harbour

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