paulhartman

But, we will be able to make money off the construction skill. When Jagex adds some more features to it, that is. What I see on the horizon - is ships. We will be able to build our own ship: a merchant ship or a pirate ship. Of course, your ship will require lumber, tar, sails (whatever they will be made of) steel for cannons, rope and nails - so many items and skills will be needed. After completed, under your command as Captain, a crew will be hired, each person getting a percentage of the haul, and you sail on one of several types of missions. 1) A trading mission, where you sail to some far away land and trade your cotton, lumber and commercial metals for their spices, silk and rare perfumes. The haul will be the net profit between your goods and the goods you bring back. 2) A treasure hunt, where you and your crew sail to some island where, after fighting many monsters and crawling through may caves, you may, or may not, find a treasure. You and the crew will split the value of your treasure. (Being the captain and ship-owner, you will take the lionâââ‰â¢s share of the loot. ) But, you must get your treasure or trade goods back to your home port. And in the way, are pirates. 3) A pirate escapade, where you hunt the seas for ships to plunder. You may be disappointed and find nothing. The oceans are a very big place. And even when you do run down a treasure ship or trading ship, you still must capture their loot. Much fighting, and possible damage to the ships will follow. Maybe the pirates are successful and share the haul instead of the previous owners, and maybe they are fought off. Who know? Being a pirate is not risk free. If the ship is damaged, the owner must make repairs before attempting another trip. Jagex will allow greater damage to pirate ships than others since the pirates do not have to put out the effort to get the trade goods or treasure. And, maybe pirate ships will not be allowed as many cannons as the other ships. We will have to wait to find out. But this is certain: only the highest level construction players will able to build ships at all, for this will be the construction skill payoff. Those distant ports will be trading very rare goods indeed, goods not previously seen in the Jagex world. And who knows what new weapons, gems and amour will be hidden in treasure chests. Jagex will not have you sailing off just to find a few bars of gold. And while the crew must be paid, it will still be the owners of the ships who will really benefit. If you are a skilled Captain, famous for your successful voyages, maybe each of your 25 crewmembers agrees to work for only a 1% share each. You get rich; that is, if the pirates donâââ‰â¢t get you or the crew doesnâââ‰â¢t mutiny and take it all for themselves. Arggggggg.

Cardovilian says: Runescape creates cash out of thin air. This happens because of mining, woodcutting, monster killing etc. If Runescape had a real economy, the price of, for instance coal, would fluctuate on a day-by-day basis. But I have been playing for over a year and it has always been 180-200gp (unless you get lucky - which DOESN'T happen in the REAL WORLD) My reply: Actually, in the real world, cash is also created out of thin air by Central Banks. So, Runescape is no different in that respect. If we had an efficient market instead of the âââ¬Ãâstanding on the corner yellingâââ¬Ã

Satenza, I donâââ‰â¢t want rares gone. I think rich players are in reality, so they donâââ‰â¢t need to come back to anything at all. I have stopped thinking up ways of getting rid of them (rares, not rich players); it was but a youthful indiscretion, but I am much younger now. You are right that if I am interested in them I should want to stay in the game. And, it is true. I do want them to stay in the game so they can continue to entertain and motivate me. Since I donâââ‰â¢t want rares gone I have no good reasons for wanting them gone, so I need not concern you anymore. I promise, until my next thread on rares, this will be my last one. However, I may post on the Runescape economy as a whole, I just wonâââ‰â¢t mention rares. I am sorry I have been a burden to you.

Satenza asks: Paul answer what effect do rares have on you? If they have no effect what so ever i don't know why you keep making these threads.... My answers: 1) This thread is not about rares, but about rares and the economy. So, I donâââ‰â¢t keep making treads about rares. 2) Rares in and of themselves have very little, to no effect on me. But, that does not mean that I still canâââ‰â¢t have opinions on them or an interest in them. New Zealand, a wonderful, beautiful country also has very little effect on me, but I still find it interesting. I would read about it, or watch a documentary about it, or maybe even travel there someday. 3) What effect do I have on you? None. Yet you keep replying to me. So, could you not ignore me and my threads just as easily as I could ignore rares? Yet you donâââ‰â¢t. So, you tell me. Satenza answer what effect my posts have on you? If they have no effect what so ever I donâââ‰â¢t know why you keep replying to themâââ¬Ã¦

Monkeymike says: to try to deflate the price of phats jagex releases construction, this adds a huge drain to the coin in rs which can only be good for the RE and have the effect of pleasing a great many people. however it sees to me that the new skill has not had the desired effect as of yet.... My reply: Unless we get confirmation from Jagex, I donâââ‰â¢t believe we should assume they had any intentions towards rare prices by making construction expensive. One of the points I have trying to make is to not think that everything revolves around rares. I believe that Jagex wants to make the game as enjoyable for as many people for as long as possible. Whether rares sell for 250 gp or 250 million gp is not important. What is important is if people keep renewing their membership. From a business standpoint, it would be a huge, maybe fatal mistake for Jagex to let something like the prices of rares influence how they price a new skill.

Duke Freedom says: Now before you jump on it and turn my words around, saying that I state that all the effects of inflation are absorbed by the rares - no I'm not saying that. However, I'm 100% convinced that rares do play a role in, at least, absorbing part of the inflation effect. In fact, all the evidence is pointing in that direction - you'll have a hard time to prove where it's going otherwise. My reply: Again, rares canâââ‰â¢t absorb inflation. Inflation is caused by increases in the money supply. I think that you have identified that. But, if supply of the products that people want to spend that money on increases at the same or higher rares, then there is no inflation. If not rares, then what? Increased production of other goods. Pure supply and demand. Players are looking for ways to make money. I believe they want money to buy the items that make the game fun. Plus, the higher level you are, the more you can do, so they also buy items to help themselves level up. And have more fun. I think that people play this game for fun, not seeing how much wealth they can accumulate, though some may equate fun and wealth. So, any increase in prices will be noted by people who want to raise cash, and they will increase their production of those items to benefit from the new higher prices. And thus, increase supply, and inadvertently push the prices back down again. Since I have been playing, Jagex has made it easier to bring new supplies of goods into the game. We have new mines, new areas, more banks, better fishing spots etc. The Royal Trouble quest makes it very easy to convert cash into certain types of materials. So, the reason that we have not seen inflation in overall items in the game is that the supply of those items coming into the game is sufficient to fill whatever new demand is created by an increase in new flows of cash. Has nothing to do with rares. Again, and I know I am repeating myself here, rares canâââ‰â¢t control inflation in any detectable way since they only move cash purchasing power from one person to another. They do not reduce overall cash purchasing power a bit âââ‰â¬Å unless you high alc one.

On the word utility. If I confused anyone on my use of the word, utility, I am sorry. I guess I thought I made it understood that I was talking about practical utility: meeting the basic needs of people and institutions in their day to day lives when I discussed the difference between corn and collectables. Evidentially, either I did not, or did so inadequately. In one sense, almost everything has utility, in that it provides some satisfaction. Rares provide plenty of utility in that respect. However, since rares do not provide any means of protecting oneself, killing a monster, healing damage, increasing prayer, making weapons more efficient, increasing agility etc., they provide no practical utility to the owner.

Bloodveld says: STOP TRIPLE POSTING AND LEARN TO USE BOTH THE QUOTE AND EDIT BUTTONS!!! That had to be said. My reply: I have yet to triple post. I seem to get accused of so many things that I have not done. As to the quote button: I will do it my way, and you can do it your way. And for the edit button: whn I doo sumpin thatss in need of a good edittting I will juse it And that had to be said also.

12pure34 says: I have been reading through most of the posts and I am stunned. I finally found people who are truely interested in Runescape Economy (RE, like i mentioned in my 4x post sorry) If I may ask, you are not obligated to answer: What are your ages and studys or backgrounds. And I am especially curious about Duke Freedom's background, because he is one of the RE masters. My reply: I am 56, have a BA in accounting, was a CPA but now retired. By the way, I retired when I was 48 because of the money I made in the stock market. So, I do have a little practical knowledge of markets, prices etc. I do not say this in any way to float my own boat, but just to fill in that I may actually know a little about markets. And, all markets, be they for stocks, houses, commodities or items in a computer game, basically run under the same laws.

Dogfever: I can see some logic in PH's post but it does rather simplify macroeconomic theory. He is right that rares, in isolation, are not the RE and that the simple trading of rares does not impact upon inflation. However, utility derived from non-classical economic propositions such as happiness and satisfaction skews the market price of rares with the knock-on effect of altering spending patterns amongst the top players reducing spending and thus proliferation of wealth downwards hence limiting price inflation. My reply: I agree that rares provide utility in happiness and satisfaction to their owners. Clearly this is so or they would not buy them. But, I donâââ‰â¢t see how altering spending patterns among top players holds down inflation except for certain items. For instance, if all rares disappeared, semi-rare items would take their places for staking or whatever. So, the price of something like dragon chains, which contains both practical utility as amour, and collectable aspects because it complete dragon sets and is rather rare, would rise. But, this is true of any item. Remove sharks, which are not even semi-rare, and the prices of lobsters, or now, monkfish would go up. So, everything in the economy is related to everything else in some way. The price of Guthans and the price of whips are to some extent related. But, rares holding down overall inflation for most items in Runescape? I donâââ‰â¢t see how that can be.

Monkeymike says: Construction: where does this fit in? My reply: This is a fascinating question, and deserves a thread of its own. Construction is much more expensive than I imagined Jagex would make it. It is almost designed to take cash out. Some skills take huge amounts of time, and virtually no money: woodcutting for example. Construction is the opposite. So, is Jagex intentionally taking cash from the system? If so, why? Or, is Jagex just reflecting that homes in real life are expensive, so should homes in the game be expensive. I donâââ‰â¢t know, but I would love to know their intentions.

Jimbob says: I'm not going to bother arguing any more points, because you probally know far more about economics than me, but by the looks of it your really just trying to get rares taken out of the game, i can see no good reason for this. The economy is fine as it is (not perfect, but fine) why take out rares and risk throwing the balance? My reply: No, I am not trying to get rares taken out of the game. Even if there was a really good reason to do so, there is not really a good way of doing it. If there is a rare problem, and contrary to everything written previously, I donâââ‰â¢t believe that there is, it will eventually take care of itself. And you are right, the economy is fine âââ‰â¬Å except in one very important detail, completely unrelated to rares. It needs a much better system for trading between members. Standing around and yelling âââ¬ÃâSelling Sara page 2âââ¬Ã

Lawrencekill says: Well to your first post about person A and B. If I have a planium bar out of a thousand or so (hypothetically), does that mean my planium bar does not play a big role if I can sell it to someone for a million bucks? My reply: Well, your transaction may have some interesting effects. If planium bars are selling for a thousand each, and you sell one for a million, then others will perk up very fast. Since market prices are rich with information, they will want to know what someone else knows that they donâââ‰â¢t. So, you are adding some very important information to the economy. However, you now have the million dollars that someone else previously held, so it has no effect on the economy, unless your transaction raises the price of planium to other uses, and their products now must sell for more. But, let us say that a Central Bank bought your bar. Now a million new dollars have been added to the system. Without any increases in supply of goods and services, that new million dollars will tend to cause inflation, raising the prices of various other items. I hope this helped.

Duke Freedom says: Lastly - I am not claiming that the rares market IS the economy or anything ridiculous like that. It is undeniable, however, that rares play a big part in RuneScape's economy as well and are one of the most interesting items in RuneScape to observe from an economical point of view, as they have fluctuating prices, in opposite to the material markets who have practically constant prices and the pseudo-rares market that have continous-dropping prices. My reply: Maybe you are not. However, I have seen posts of yours in the past discussing the Runescape economy and you were only talking about rares, ignoring the thousands of other items in this game. And, maybe you are not, but others are. This line of discussion is not just about you. I agree that rares play a part in the economy, although the same as bronze mediums, which have more practical utility than rares. And, I do not deny that they are interesting. All these straw men you put up just to ignore the most important point I made: that rares do not hold down the prices of other items in the game. I see you do that address that at all, but take me to task for things that I actually agree with you on. Duke Freedom says: Unless you're going to take my arguments more seriously and be open for other people's opinions, I probably won't post on this thread again. My reply: When these opinions of others, such that it is rares and not the money supply that determines inflation in Runescape, are ideas that are completely at odds with all economic thought, am I supposed to be open to that? What if someone said that gravity did not work where they lived, and everyone floated on the ceiling? Am I supposed to be open to that? I am just applying economic theory to this game. And, if you donâââ‰â¢t post on this thread again, I have lost nothing. Be my guest. If this game is not going the way you want it to, take your ball and go home.

Sykonight says: As far as your points on rares and the economy...In my opinion as already said, they take most of the inflation. My reply: If you are right, and it is not an increase in the money supply that causes inflation, but just the buying and selling of collectables, then all the economic textbooks need to be rewritten. I shall immediately begin calling economic professors and warn them of their error. Would you be available to consult with them during their rewrites?

SaidinWot says: In closing, you're right; rares are the entire economy, though they are an alternative outlet for players with lots of money, no matter how you look at it. GP will always change hands, in every transaction not done with a store. You're just worried about when it gets up into the hundreds of millions and it's just not logical (to you). My reply: I am assuming you just misspoke and meant to say âââ¬Ãâyouâââ‰â¢re right; rares are NOT the entire economy.âââ¬Ã

Genju says: by the way, you've once again avoided the original question put to you. Why should rares go? My reply: Man, read my post a little more carefully. I specifically said that it was not for or against rares. Geeeeeeeeeeeee

Captainant says: Some people in reality do make their living off of selling collectables.... One of my immediate family members being one of them.... My reply: OK, you are going to need to help me out here. Can you show me just where it is that I actually claim otherwise? I donâââ‰â¢t remember making that claim. Captainant says: Also, like duke said, rares act as a buffer for economic crisises. When POH came out, what took the biggest hit in prices? RARES! Yes, some items that were pretty pricey (EX- Verac Armor, 6 mil to 5 mil!) dropped in prices, but all the other things stayed pretty level. My reply: Rares, and other high dollar items, took a hit in price at the release of construction because if you are going to raise big money, you sell the high dollar items. To call this a crisis however is grossly overstating it. All that happened when people wanted to raise money for construction is that the market received more people wanting to sell than buy. This is just simple supply and demand economics. This is just the way markets work. Captainant says: It's always just changing percentages around from what gets the most money; the percentages are always there, rares really are helping the economy if you think about it instead of bashing them saying that they're sucking up all the money in the RS world! My reply: Captainant, you need to help me once more. Just where was it that I based rares. You guys keep saying I said this or that; I keep going back, and canâââ‰â¢t find it. But, yes, I did as you suggested. I thought about it. And I came to this conclusion. You are wrong.

Nick says: Without rares there will be huge inflation, causing everything going up in price. Rares "hold" a lot of money. There is say x gp worth of rares. Without rares, it will be the current gp+ x gp= BIG NUMBER. Inflation=higher prices=Bad My reply: Nick, you did not read my post did you? Admit it. My original post demonstrates why rares do NOT hold down inflation at all, in fact have nothing to do with it. Go back, try again.

N64jive says: if there was no rares in the economy, 2 things might happen. 1. Everyone would spend more money on everything else. 2. there would be a lot more 99's My reply: I would like to apologize for my inability to make myself better understood. My original post failed. Everyone could not spend more money on everything else because rares do not take any money out of the economy. That, in summary, is what I said. The market in rares just moves money from one person to another. In fact, the opposite of what you said may be true. Since people engage in activity to earn and save money to buy rares, there may very well be LESS, not MORE money being spent on everything else if rares were absent from the game. As to there being a lot more 99s, I donâââ‰â¢t really see a connection. In fact, again, the existence of rares may encourage people to level up their skills to earn enough to buy a rare.

Skyoknight says: You claim that rares mean nothing and are useless and you dont care to ever own one and blah blah blah...Then WHY put so much time and effort into these posts and trying to make people believe the same? The fact is you are jealous. Get over the fact that you cant afford a rare because they rise faster then you can attempt to make money. Drop the subject, they are hear to stay. shocker isnt it! My reply: I looked through my entire post. Maybe there was something to this effect that was in it yet forgotten by me. No. Not there. If you would actually just read it, instead of going off after some imagined slight, I did not badmouth rares in any way. I just explained their lack of a role in the Runescape economy. I am interested in countering the misinformation that I have seen on these forums about the rares being equated with the runescape economy. I overlooked it for as long as I could stand. My intent in this post was simply to put the sword to that lie. I am sorry that you let your own preconceived ideas about what I was saying keep you from actually reading what I said.

Genjui says: This is starting to sound like a personal crusade against rares, rather than the kind of thing you claimed it to be at first. My reply: Did you not read the part where I said, âââ¬ÃâI am not making any argument for or against rares here.âââ¬Ã

Duke Freedom says: IF you had really known what you are talking about, then you would have known that quality, style and rarity are aspects of utility as well. How on earth can you argue that rares don't have utility? The utility value of a product decides what people are willing to pay for the product - rares have huge utility values, hence their price. My reply: Clearly you did not understand what I was saying about how some assets have utility by their ability to help in the production of goods and services, or in providing necessities for life, and how some assets do not have a day to day practical role but are valued for their collectability. The fact that people are willing to pay huge amounts of money for something does not make it what I call utilitarian. Let me give you an example: Rembrandts. The utilitarian value of a Rembrandt is its value as a wall hanging. So to determine its value as that you would look at what it is worth compared to a commercial wall hanging. Go to a picture gallery and you can find plenty of fine prints for about $50. So, the utilitarian value of a Rembrandt is $50, while the collectable value may be $5 million. So, for phats, their utilitarian value is what similar noncollectable items sell for in the game. You can buy a hat for from zero to a couple hundred gp or so. So, the utilitarian value of a phat is 200 gp. The difference between what it sells for is the collectable value. In the case of phats that is virtually its entire price. Do you understand now? That is just about as clear as I can say it. I apologize for my inability to make myself clearer. Duke Freedom says: As someone else already said, rares keep prices of other products down because it makes people stash gp away to spare for a rare. My reply: This is just timing. As one person is saving, another is spending. This is the way it works in the real world also. So the money being saved is out of circulation for a period of time. So what? And, since the person has money to stash, and is still trying to earn more money to buy his phat, that means he is still engaged in activity. If he needs cash to do something, like buying coal, he still does it. It would not make sense to intentionally ignore a real pressing need that would allow you to earn a considerable amount of money just because you want to keep that money in the bank? Take it out, spend it, earn your profit and then bank it. The really convenient aspect to this reply of mine is that it actually conforms TO WHAT PEOPLE DO. Duke Freedom says: As I also replied on that in the other thread you made about rares, it is generally true that the people who say that others don't know what they are talking about, don't know what they are talking about themselves. My reply: And in this case it is true that I do know what I am talking about because my statements are actually based on economics, and not the wishful thinking of a rares merchanter. You actually did not refute a single thing I said - let me add you would have to refute a considerable amount of economic theory to do so, so I am not the least be surprised

"Also I'd like to add, rares do stimulate the economy. This is because many people are trying to obtain a rare item. In their quest for this beautifull item, they mine coal, chop yews or any way they like. They have set themselves a goal which increases the amount of resources, thus increasing the amount of money put in the game." That is true. Anything that encourages economic activity stimulates the economy. The new construction skill for instance has to be causing a significant increase in activity. It was not a coincidence that they added a lot of new serves just after construction was released. However, I would also like to look at this from Jagexâââ‰â¢s point of view. Do they really care very much about the Runesape economy? If I was them, as long as people were having a good gaming experience, would I care if whips were 3 million or 8 million? If I was them, I would mostly use the market prices as an indication of what changes may be needed. If coal ore prices rose by a considerable amount, it may be I need to add more coal mining locations, maybe closer to a bank. After all, a considerable amount of information is contained in market prices, as long as the market is fair and unmanipulated anyway.

There is a popular theory among Runescape players: mainly that the presence of rares somehow either, IS the economy, or helps the economy by giving rich players something to spend their money on besides utilitarian items, thereby helping to keep prices lower for all non-rare assets. Regarding the claim that the Runescape IS rares. There are two different types of assets, both in the real world and in Runescape. There are assets that are valued based on their underlying economic utility; corn, cars and houses would be examples of these. Their dollar value is based on their worth to individuals in working, playing or just living. Then there are assets whose value is determined by their collectablity; Rembrandts in the real world and rares in Runescape would be examples of these. Their value is based on their attractiveness to collectors due to their quality, style or rarity. Since in the real world and in Runescape, people spend well over 99% of their time dealing with utilitarian issues, such as mining, fishing, working, eating etc., those activities are what forms the economy. Time is allocated by individuals based on what kind of underlying utilitarian benefits they can get from their activities. If they amass sufficient wealth, and have an interest in collectables, they may buy some. But, otherwise, they are concerned with paying the mortgage which is due next Friday, or buying some sharks to go pking. Collectables are not the economy in the real world. That would make no sense at all. They are not what people spend any more than a tiny fraction of their time thinking about. And, unless you are selling part of your collection for cash, they do not put bread on the table. In the same way, rares are not the economy in Runescape. That would be equally as silly. To say that the economy in Runescape is rares, is the same as saying that the economy in the real world is Rembrandts, Qing dynasty armorial plates and early US colonial copper coins. Economics are based on the items people use day in and day out to function, not the value of the items in their collections, regardless of how valuable those items may be. Regarding the claim the rares provide rich people an outlet besides things like sharks, whips and coal ore to buy, thereby keeping down the prices of utilitarian items. This would make some sense if the market in rares functioned like a Central Bank. A Central Bank can increase or decrease the money supply in an economy. It can sell its own paper, thereby taking money out of supply, or it can buy its own paper and put more money into the system. But rares can do neither of those things. If Person A sells a phat for $250 million to Person B, the $250 million does leave the economy; it just goes from one bank account to another. Person A has $250 million more, and Person B has the same amount less. So, how does this keep any rich person from spending money on coal ore, thereby driving up the price of coal? Person A now has the same problem as Person B had before the transaction; he has $250 million he needs to spend on something. He could do like Person B, and buy a phat from Person C, but this just shifts the same money to one more account. Nothing really gets accomplished. Let us throw a cash poor person into this. Cash Poor Person A sells his phat to Cash Rich Person B for $250 million. Now formerly Cash Poor Person A has the same problem as B. Maybe A will spend his new found cash in ways in which B would not, fulfilling some long delayed desire to level up magic for instance. But then again, B may have been thinking the same thing. How are we to know who is willing to keep their wealth in cash, phats, coal ore, sharks or any other asset in the game? Simply, rares do not bring new money into the game, nor do they remove money from the game. Since trading in them only moves money from one person to another, and it is impossible to determine what the seller is going to do with his cash, rares have very little impact on the REAL economy. They simply move the possible use of cash from one decision maker to another. The only way rares would have any real impact is if they pull new cash into the game. So, high alc a phat if you want to see it have some effect on the Runescape economy. But, I believe that additional 1gp can be easily absorbed in the normal course of activities. The only real question is who is going to own the rares, and who is going to own cash. For the economy as a whole, after a transaction in rares occurs, neither the number of rares nor the amount of cash changes. For the economy, transactions in rares are a wash. I am not making any argument for or against rares here. All I am saying is that the claims about the effects of rares on the Runescape economy are based purely on a lack of understanding of how economic systems, and money and banking, really work. So, when you see posts that claim to be about the Runescape economy, and they are only talking about rares, please understand that they are talking bogus economics.