sees_all1

Buffalo buffalo buffalo Buffalo buffalo Buffalo buffalo. How about (female dog)ing? I'm sure most of us would have 99 in it by now. :o

I feel as though most of you don't get it. Inflation is not a problem to the runescape economy... It never will be a problem even though it's rampant. Any economics professor or book will tell you that the supply of money is independent of the amount of goods and services produced. In fact... A simple way to end 76king is to make the number and the amount of pure gp dropped more than the number of items gained. This will make the gp worth less compared to items... Meaning that the real value gained through pvp is much less than the real value that skilling gets you. In this case, inflation is the solution and not a problem. If you don't understand what i've just said, don't flame me for something you can't understand. If you still think inflation is bad, you need to read my thread "relating economics to runescape"... It will explain lots of it. Edit: stupid iPod touch.

Well, true, but there are some key differences between the financial system during 1929, and today. First of all, in 1920s, the majority of stocks were purchased at margin. People would pay 5-10% of a large amount of stock, and take out a loan to finance the rest of the purchase. This worked great because people would make tremendous profits, so long as stock prices continued to rise. (people were able to take out loans) Second of all, banks would do similar practices, they would back deposits with the stock market. (banks were able to participate in trade) Lastly, when people couldn't pay back their loans when stock prices fell, banks started failing. (banks could not give back deposits) What you've said about merchanting clans is true enough, and I've illustrated that in section 2 of the first post in this thread.

Sorry for the delayed response - I've been a little busy. @hohto - The economics you use to justify your points are mostly correct, the only thing I'm a little uncertain is the entire time-line you're using. Summoning was released what, three months after the death of RWT? And at that point in time, no one would have the levels to summon those familiars. It would take a little bit longer than that for the effects you've described to kick in. Also, I've posted my third topic, "What is GP anyway?" Hope to have some good discussions on it.

I'm surprised that they took jrhairchest's question, tbh. Especially seeing what he's had to say on the topic of P-Mods, but I guess there's know way Jagex would know that. I think the response jr wanted was more along the lines of, "Our Old Pmods only wanted glory from themselves, and were being complete jerkbags, which is why we started taking applications off of wbm." Certainly not that same response. Anyhow, I think it means that Jagex is tired of searching for mods, and would rather have resumes.

yikes... so the leaked picture was real? I don't want to know how long I've been logged in, its like seeing how much of my life I've wasted :P

usually I'll randomly trade someone - say I'm trying to make bank space. I target lvls 3-30, and make sure its worth their while (i.e. more than 2k total). But I guess that's different, because I'm giving away free stuff, rather than showing it and declining. For me it's easier than dropping it :P Anyhow, that has happened to me a few times too, but only when I was under level 50. Since then, people don't bother me as much.

The question is, is it plausible that it took about a year before the prices got up to this level? The equilibrium price for fire runes (right now) is somewhere between 6 and 7 GP. I'm not sure if it'll be higher in the future, but Jagex had a price floor on these for a very long time. Granted the floor was only 9 gp, but it only took 5 days before they reached an equilibrium. If in 1 year, fire runes are around 20-30 each, then I'll say that it was probable that item prices then went so low and stayed low for so long because of all the gold farmers. If in 1 year, fire runes are still 6-7 gp each, then I'll say its improbable, because the markets should have adjusted much more quickly.

Is this in reference to Macroing / RWT? I understand the point about Fire Runes, its related to price floors. I'm not sure the time frames you're referencing when you're talking about lobsters, swordfish, and Anchovy Pizza. My point was that after RWT was basically stopped, lobsters went to an unheard of price of 150-170 each. Pure Ess was at a historical low at that point, and ever since has been creeping higher and higher. Is it plausible that the prices we're seeing now are the new equilibrium, or approaching the new equilibrium? A little more to add - Back when there was RWT, A significant portion of the RS population was a bot or a gold farmer. I remember there used to be around 160k people playing at once daily, and now its closer to 80-100k (I couldn't tell you exact numbers, the average or st dev, but others will remember this too). Could that be supply being cut by 20-30%?

I hope not... I'm trying to bring a new perspective. I posted my thoughts on supply and demand. Tell me what you guys think, I'm open to discuss, debate, and learn :P

I think this will be my next topic for discussion... I want to look a little past the PVP updates. I think supply and demand is a little more pertinent to current affairs than inflation is. It was just everyone else calling it inflation, blaming it on inflation, saying we need to fix inflation that was getting me a little irked. The other thing I'd consider writing about is similar to inflation - what is money? (I was actually just lectured over this in a macroeconomics class, so its fresh in my head). I'll probably get started on that tonight...

I'd prefer to call that the effects of supply and demand. Merchant clans are short term ventures that economically speaking can't work. I've done several graphs with explanations on this in a guide I was writing, here is the link. The pertinent part is section 2 - Economics of Merchanting clans explained. Yes, that does make sense. I think this is an example of substitution, magic logs are a substitute for yew logs. When it became impossible to buy rune scimitars (because BH was released), I bought adamant scimitars. They worked nearly as well, and didn't hurt so much to lose. I think you and I will agree that inflation cannot explain everything that is going on in the economy at once. There's too much other stuff. However, I believe that given enough time we can understand some basic things that are going on, enough to know how to least be affected by it.

Perhaps what we're witnessing isn't pure inflation? What I want to know is what is causing different items rising different amounts. But I'll get to what I think is causing it later, because I want to know and discuss what everyone else thinks. Your point about the SGS is a good one - you've identified an item that is isolated from several different variables, but I think it might be susceptible to other factors. I find this topic fascinating, and it helps me apply what I've learned. I don't know about you, but I like that. I would much rather talk to others and learn from them than to write everything and have people say, "I like what you've written". That's probably why I like forums much better than English papers or speeches.

In a nutshell, my oversimplified model does say this. In runescape, there are literally hundreds and thousands of items. I do not wish to go into discussion on how inflation would affect each and every single one of these items, doing so would be pointless. But you do have a valid point - inflation affects different items in different ways. That also goes into how you calculate inflation. There are many ways to do this, including putting together "baskets" of items that every runescaper needs, and then calculating the price change in these baskets. One thing that complicates things is uncertainty - we have absolutely no idea how many scimitars there are at any one point in time, how many nature runes, how many ... you get the picture. We also have no idea the rates these are created or destroyed, further complicating everything. But that is getting into different topics than the one I'd like to discuss at this point - pure inflation. I'll go ahead and read it... I love reading different points of views. Thanks for the heads up on the older materials.

A few years ago I took my first economics class- I have to say some of the things I learned were interesting, while much of the stuff was boring. The first thing my economics teacher told me is that to be an economist, all you need to do is say you're an economist. I don't know the accuracy of that, but he said there was no exam, no boards, no thesis required. All you need to be an economist is an interest in it. There is a lot of discussion recently over the Economy of Runescape, whether its micro, macro, in between. Believe it or not, discussion on prices of certain items, inflation, or even experience vs. cost all deal with Economics. If you've read this far, are still interested, and have no economic experience (classes, reading, whatever), I suggest you read (or skim) the wikipedia articles on economics, supply and demand, and inflation. There are many other topics in Economics, and certainly many we can apply to Runescape. Anyhow, the primary purpose of this thread is to discuss and debate different things relating to economics and runescape - I don't know how long or how far this thread will go, and if it seems to die I'll try and post a new, economics related thing that everyone can discuss. I'm also starting this thread, in part, because I had a disagreement with Ts_Stormrage and the article they posted in the October 18th Tip.it Times. I want this discussion to be both highly visible, and easy to participate in, but I also want it to eventually cover more areas than Ts originally talked about (but couldn't fit into a single article). So - the first Topic I would like to discuss is Inflation in Runescape. Please notice that in my examples I'll make gross simplifications. This is so I can deal with only one or two variables at a time, and I suggest that when discussing these things you do the same (otherwise our heads will hurt from all the things we need to keep track of.) [hide=Topic 1: Simplified view of Inflation - Not the cause of all runesape's problems?] Inflation: In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time. When the price level rises, each unit of currency buys fewer goods and services; consequently, inflation is also an erosion in the purchasing power of money – a loss of real value in the internal medium of exchange and unit of account in the economy.(Wikipedia) So, in Runescape terms. Inflation means that after some period of time (days, weeks, months, years) one GP will buy less goods in Runescape than before. How does inflation occur? Suppose there are 100 active players in runescape. Each player has 25 gp. There are 100 items total in the entirety of the runescape economy. Players are only able to trade items, or kill a type of monster, which drops gp only. Say each of the 100 players kill a monster, and the total amount of gp in the economy grows from 2500 to 5000. The number of items stay constant. This economy has experienced inflation of 100% - 1 GP now buys exactly 1/2 of what 1 GP would buy before. Inflation would also occur if items were lost - Instead of 100 items total, there were 50. Then one gp would buy less, because there is less to buy. Once again, this is a gross over simplification of what goes on in the Runescape Economy. It doesn't take into consideration that new items are created, there are many different types of items, new players enter and old players leave. It doesn't take into consideration that XP is valued, that shops sell items, etc. What happens with pure inflation? Suppose a player plays for a year, has 10m in their bank, and then quits. They obtain their money only from runecrafting. A year goes by, and inflation was at 100%. The player is only able to buy 5m worth of stuff. However, because this is pure inflation, they are able to earn GP at a rate 2x as fast as they were, or at the same rate when you account for inflation. What if the player also had 10m of items in their bank? Because GP is now worth less, the items are worth the same if inflation is accounted for, meaning they would be worth 20m (10m deflated GP). In pure inflation, the only thing that is worth less is the GP. Items are still worth (relatively) the same, making profits by creating items still gives the same amount of deflated GP. There are other was to get GP - PvM. Monsters usually drop GP. If that is the primary thing the monster drops, hunting them becomes less profitable over time, with inflation. Whew, that's quite a bit. I will update this space in the future, but I'd like to see what everyone has to say on the topic. Anything major I missed on the topic of inflation? Anything you respectfully disagree with? Anything I need to clarify? What do you have to say on the topic? What I don't understand is why people dislike inflation so much. I don't think everything we're seeing now is pure inflation, and inflation is just a symptom and not the cause of the problems. It seems to me that telling Jagex to fix inflation is like demanding a new product to be created... Chipotlaway. It fixes the fact that you have to buy tons of new underwear, but it doesn't fix the fact that you're bleeding from... well you know. Let the discussion begin.[/hide] [hide=Topic 2: Supply and Demand, with some historical context.] Alright. Last night I posted my views of inflation. I've spent some time clarifying, but not much time really *debating*. I would like to propose that inflation has very little to do with runescape's current economic problems (well, until we can get into a discussion about "what is money?"). So - What is the reason for crazy high, and rapidly increasing prices? I would like to propose that is supply and demand, and the invisible hand at work. Supply and demand is a topic that is best explained graphically, and can be fairly confusing, so I'll try and get graphs up ASAP. Remember back to January 2nd, 2008. That's right, almost two years ago. Unbalanced trade was removed from the game. 1/2/08 was the death of RWT, but more importantly, gold farmers selling 1m gp for $3 each. If you've ever visited a gold farming website, you'll have noticed that not only did they sell gold, but they also sold lobsters, swordfish, sharks, yew logs, pure essence, and a variety of other materials. Gold farmers typically DID NOT play the game as intended. What I mean is that Gold farmers would only "play" to gain materials in order to sell to other players. All gold farmers did was supply raw materials to the game. With the removal of RWT (or significantly limiting it), gold farmers could no longer make an easy profit. It became impossible to RWT raw materials, but not so impossible to RWT weapons or GP. I remember that after unbalanced trade was removed, for some reason this prices of cooked lobsters plummeted. I don't have any historical records to point to, and if anyone could provide it I'd appreciate it. I remember this so well because I lost so much money on it. I purchased several k's of lobsters on the GE at minimum instantly, and the price dropped down to 150 each. (EDIT:I've been searching some forums, and from Tip.it's price check of 2006 - http://forum.tip.it/topic/61735-price-list-overview/ (lobster is 220-250) From another forum post that was last editted Mar 12 2007 - http://forums.d2jsp.org/topic.php?t=6700253&f=225 Lobster is 180-210. I'm still looking, but its looking fairly consistent...) If this is what I think it means, it meant that the gold farmers were dumping all of their items. There was a massive store of items that weren't intended to be used by the owners. I think it might be plausible that over the course of a year or two, these items have been sold off. So, the facts. With the removal of RWT from the game, Jagex severely limited the supply of popular items that were gathered by gold farmers. When the total supply curve shifts left (less supply at every point on the curve), the equilibrium price goes up. The speculation - The amount of stored items have been dwindling, and is gone now. It has taken about a year to use up all of the stored items. Now that all the stored items are used, the prices are shifting to the new equilibrium values. This helps explains why pure ess is 220 each versus the 30 each two years ago, but why fire runes cost next to nothing. Pure inflation would mean everything rises in price. Supply and Demand means that only some items are affected - the ones that were gathered by gold farmers. This does not explain why some items, like some armours, have changed in price, but it does (in my opinion) a good job with raw materials. Topics I haven't covered that's related to supply and demand, which I might do later - Price floors and Ceilings Infinite Supply and money sinks What do you think? Is my explanation plausible? Unlikely? Have a better idea what went on? [/hide] [hide=Topic 3: What is GP, actually? (and wtf is with junk trading)] I touched on this with my discussion of inflation, that even though price levels rise, it doesn't affect players. How could this be, if GP - the primary medium of exchange - becomes devalued? So, I have two definitions for GP, similar to money, GP is the primary medium of exchange, and GP is a store of value. As in, GP is bankable, was never worth nothing, will probably never be worth nothing, and is near-universally exchangeable for items. And that sums it up really, all you need to know. Just kidding. You're probably wondering right now, if GP is the primary medium of exchange, how could there be junk trading? That is a good point, and it is almost exclusively a failure of the hand that drives the market - Jagex. When I say this, I mean that the system that Jagex has devised is quite ingenious, while not allowing for massive amounts of Real World Trading, it allows for limited free trade. But that's the problem - trade is limited. If trade was completely free, we had no updates, and we're at some long run point in time, there would be an equilibrium. Runescape Gold would have a monetary value, much like a euro has a value of the dollar. The prices of items would remain relatively stable, because GP would be stable. That isn't the case, and it never will be. Because Jagex cannot afford to allow RWT, they had to make the markets sticky. To better understand what one GP is, I'd like everyone to imagine a runescape without GP. How would you get items that you wanted? You would have to make them yourself, kill monsters until they dropped them, or accumulate another item which you could trade someone for to get a mutual benefit - They want what you have, and you want what they have. Merchanting in this system would be incredibly easy. All someone would need to do is accumulate an item, and be conservative in what they gave, but liberal in what they accepted. This actually happened - and still does happen to some extent. An example my economics professor gave was Nazi POW camps. Each POW would get a care kit every month. Inside would be items like cigarettes, tinned meat, toothpaste, and a candy bar. What happened? Cigarettes became the medium of exchange, and you would get people posting their prices - Will buy all toothpaste for 4 cigarettes each, will sell all toothpaste for 5 cigarettes each. In that example, there were only several items. Imagine Runescape not having a GP. If nothing became the universal medium of exchange, trade would rarely occur. You would have to pair your item, one of the many thousands, to someone else's, of many thousands. The GP makes everything more liquid, easier to buy and sell. So, back to junk trading. When multiple items are stuck, junk can be used to supplement the purchase to make it more fair. These items, whether it be junk, or under priced, have a VERY key role in the Runescape Economy - they help make trade possible in a restrictive world. When a new item is created, and demand is exceptionally high for it, Jagex will never be able to correctly guess the price. Junk allows these items to be traded outside the GE... but more importantly, they're traded. [/hide] Topic 4 - Price floors and Price ceilings: the cause of all things junk For my forth topic, I would like to discuss pricing limitations, specifically floors and ceilings. First, I want to make a distinction. There are natural and unnatural pricing limits. An unnatural pricing limit is one where the market dictates the price of an object to be higher or lower than a limit that Jagex has imposed in the game. A natural pricing limit is a price where the item can be converted directly to or from currency, via alching, shops, or into something else which is convertible via skills. Straight to the examples: Cooked Swordfish have a med and a max price of 500 each. If the market were allowed to dictate the price, you can be sure it would be much higher, probably around 750-1k each. Other items in recent memory to have an unnatural price cap include death runes, lobsters, and strength potions. An unnatural price ceiling set by Jagex does two things. The first is it keeps the item at a very specific price, which may or may not be affordable to all (which is usually the point, make the item affordable). The second is it stops the market from being fully efficient, it causes a shortage. More people would supply the item if it were a higher price. If you took an economics course, the teacher would probably show you some nice graph with an x, and a line underneath the x. Then they'd start talking about the dead-weight loss, etc. A natural price ceiling is one that occurs in the market. I've found that in runescape these seldom occur, and an example of this would be the disparity between uncooked and cooked food. Cooked food will never be worth less than uncooked, because people value experience. A better example would be death runes. When stores stocked items infinitely, the prices of those items could never get much above the price the store set. If death runes did not have a price ceiling placed by Jagex, people would sink millions of GP into stores to buy death runes to make a 1-2gp profit on each. Another example of a different kind would be the rares market. A natural barrier in place is the 2.1B GP limit. Although the most valuable items are not remotely close to that, there could conceivably come a point in time in which a Christmas Cracker is worth 2.1B GP, but cannot be worth more because it is impossible to obtain more GP than that in a single trade; it is impossible to change the price valued on the GE. An unnatural price floor is one set by Jagex that does two things. The first is it keeps the item at a very specific price, that makes it worth while to obtain this item to people that have time. The second is that it causes a surplus, there is too much of this item being created and the quantity demanded at the current price is very limited. An example in recent memory are willow logs: they had a price floor of 18gp, and after it was removed the price dropped to almost nothing. Similar to price ceilings, one could discuss and examine the dead weight loss, and the surplus. A natural price floor is one that occurs in the market. The biggest and best example of this is the high-alchemy spell. An item will never fall much more than its high alchemy price sans the price of a nature rune. People value magic experience, and high-alchemy is one of the neutral approaches to gaining experience in magic. Another natural price floor is zero - an item will never reach zero because then it would be free, demand for such an item would be virtually limitless. So, after defining natural and unnatural price ceilings and floors, this takes the discussion to junk and untradables. These are only created when the market is unable to adjust in a timely fashion to the natural equilibrium. One of the biggest fears that Jagex has is that all armour under steel will fall to the status of junk, because a nature rune costs more than high alching nets you. This arguably would ruin the experience for a lower level; there is no incentive to work hard to earn your keep. The last point I would like to make is that markets with unnatural price ceilings are negatively affected, because as the value of currency is lowered, the difference between the natural price and the ceiling becomes much greater. This is an argument I've rarely heard used against me when I say inflation doesn't hurt the players, but it is true none the less. The easiest way to fix it is to allow prices to be set by the players, and not some arbitrary limit on the GE. Alright - anything that I missed? Also, I'm welcoming discussion on any past things I've written.

Just tried that for two hours, could never get it to where it was (I've missed an attack turn about 20 times now... 1 pk total instead of the 4-5 I would normally have, and that's only because they didn't eat at 25hp, and with a B-Ax I hit 0,0,then 25. Go figure.) Anyhow, to add insult to this, I died because I didn't eat after spam clicking a swordfish - but I don't blame that on this particular update, just the game engine. On each one something needs to happen.

only for the essence.

I apologize if my post came off as attacking you - I did not mean it to. I understand that you put a lot of thought into your article, and a lot of effort. I would like you to consider that all of the effects that you have talked about are not just inflation. I don't know if there is a term that can describe everything that has happened, but its more complex than inflation. I do not believe that I am shortsighted, greedy or ignorant, and I would invite you to reread my first post after you have calmed down, and perhaps in the future debate me when I can put an appropriate amount of time in a hypothesis of what has gone on. Right now I do not have the time, nor the inclination to express all of my views right here, especially because it won't be seen after 45 minutes as the thread moves on to the next pages. You will hear my point of view in the future... And I look forward to reading what you have to say on the subject.

If the prices of everything in game rises by 30%, who does that hurt? If most of your wealth was tied up in items anyway, it doesn't hurt you. If all you had was 50m in cash, and nothing else, sure you might be out of 30% of your GP, but it doesn't seem like you use it anyway... Inflation only hurts low levels, but even they're not affected because they tend to make their own items, and if they sell those items, they'd get proportionately the same amount. All I see these days are people ranting about inflation, as if they knew what they were talking about. I think sometime in the near future I'm going to try and educate a few of you, and myself, into understanding what has gone on in a historical perspective.

The new engine screwed up all the positioning in GOP, making some spawns impossible to get orbs quickly.

Alright, a little background. I'm pure F2P, 92 strength and 80ish magic. I used to love to go on PvP worlds, and pk with magic. It was very simple, really. Pick someone in full rune, and start blasting them. Wear them down, and finally they'll realize that their full rune gives me a huge advantage, so they take it off. Lull them into a false sense of security, they'll lax on their eating (eating at, 18-20 hp rather than 24-26). Pot, prayer, and B-ax or 2h them with a high chance of success (I hit up to 30, so a 1/3 rate of pk with one shot). This worked. I could switch from staff to 2h with one click, a huge element of surprise for my opponent, they can't eat in that time frame. Now, with the new setup, I have a staff, but auto-cast is used through the magic interface. If I switch from a staff to a 2h, I get a message "Not enough runes to cast this spell" repeatedly, until finally after the 4th or 5th time it realizes I want to attack with my 2h and not magic. The only way to get around this is to turn auto-cast off, and then switch to a 2h, but even then it takes one time step to do that, and all the time they have a chance to eat up. Before I could PK with F2P magic. Now I can't, because they took away the finishing weapon option.

I like most of these, they're much different from my suggestion. I'm not sure where the Fate rune comes from, I'm assuming quest related. The special transfer is an interesting idea, but may be a tad overpowered in multi-areas (unlimited specials?) Also, attack speeds for different spells are a little weird, I thought different staffs had different speeds.

Rather than quote everything, and nitpick over parts, I'd like to make sure that I understand what you've said. You've told me that unstable prices of raw materials affect game play in a negative way. I agree with this, but I would not call that inflation. I would say that is the market adjusting, and perhaps at times over correcting because of external influences (merchanting clans, general panic amongst players), but I would certainly not call it inflation. You've also told me that increases in price levels of certain fighting materials (food, potions perhaps) is also bad for the game. I disagree with this, because I believe it allows room for new players to grow and enjoy the game ("wow, I can actually sell my lobsters now at a decent price," or "I can't wait until I can fish swordfish") But that's my opinion, don't flame me for it. Last thing was that you disagreed with my idea about deflation. I didn't put a lot of thought into this, and it was added (fairly) hastily at the end. But I would like you to consider the following scenario: Every player has 100% earned potential, grabs 76k and kills someone with 25k, then grabs 25k and dies to someone with 76k. The items that everyone loots would be worth so much more than the 25k per person lost. Some of it might be money or statues, some of it might be items, but I'd be willing to bet that most of the drops are rune items. 75% of my drops usually contain a battle axe, scimitar or 2h. If this was the case for everyone else, then these items would be worth less than they are now. However, this scenario does hold many things constant, and I understand in game its different. I'd like to say "who cares" if every item's price increased at a rate of 3% per year - its not like many people lose from that. I don't think Jagex cares either, and they wouldn't do anything to *correct* it.

I'm sorry, but none of you have convinced me yet that inflation *is* a problem. What does it matter that one gp one year is worth less than it was a year before? If you're actively playing the game or you invest in items, it shouldn't make a difference. Your *wealth* will remain the same every day. The only bad thing is if all your wealth is in cash, then it'll be worth incrementally less. Also, why do you say there is inflation? It's difficult to determine when no one has said "this is a basket of items every runescaper needs," and then tracked the value, and the number of them in game, along with the number of players. If what you're concerned about is PVP items in drop tables becoming less and less expensive, then that isn't positive inflation, its negative. Meaning one GP buys you more.

yeah, I tried to keep it pretty basic. I've also taken a couple econ classes, I'm looking to get a minor in it. Anyhow, I don't think merchanting clans will be a big problem in the future, because it seems that Jagex has / will take action against them.