What drives our Economy

[00hydro]

The RuneScape economy is composed of mainly two parts, combat and noncombat. These resources are both interconnectedly gathered by combat persons and noncombat persons, known to be "skillers." Now, as almost anyone who pays attention to the market can tell, the prices are inflating and deflating at many ranges. The Armadyl Godsword, (One of my main examples) has gone upwards about 7m gold pieces after plummeting to almost 50% of its original value. I feel the economy is being controlled by two mains factors shown below. This, if anything, or more of my two cents, rather than a convincing essay used to tell what to do and what not to do.

 

 

 

Go With The Flow

 

In case you haven't noticed, don't you tend to sell things when they're going down, and buy when they're going up? Sure, this seems like the basics of all merchanting, but it also causes extreme price inflation and deflation. Take the Saradomin Godsword. I was unlucky enough to have purchased mine before its drop and I was quite happy with it. It was staying within one or two million of the price I bought it for, and I was content with that. However as soon as I saw it drop under four million of it's "average" price, I noticed everybody starting to sell it. The problem when this happens is that because everyone's selling it, they need to sell it for lower. This means the minimum trading option gets spammed, and the price deflates to what can be 50% of it's original value.

 

 

 

Of course, as soon as this happens, people see that it was gone down as low as it will go, and people will buy it for as much as they can, hopeing it's going to go back up. This causes mass inflation, and the item sores backs up to 75-125% of its original value. Lately, however, it hasn't been so lucky with the inflations. As anyone who owns, or watches the Godsword market knows, Godswords are worth maybe a third of what they were awhile ago.

 

 

 

Now, you may start to have a defensive that because of all the people that go to Godwars, more hilts etc. are brought into the game and that lowers the price. Well while that might happen, at the same time more people are getting more money. This means that ones who may not be able to afford a Godsword now can. This would average itself at and cause little to no price in/deflation. Some argue that it's the rich that get richer, but I know that you don't have to be rich to get rich.

 

 

 

 

 

Skilling Downhill

 

Ahh skilling, one of my favorite activities. The problem with skillers, such as myself and many others, is that we don't always care that we get the best price. I know that if I needed the money - for whatever reason - I would gladly sell at average or even sometimes at minimum price just to get that money. This is the fatal habit that has caused uncut onyxes to cost more than a ring of stone, berserker necklace, and regeneration bracelet combined. Now, doesn't that sound a bit extreme?

 

 

 

Well the problem with this aspect of skilling is that it can, in some way, benefit some skills. Fishing and cooking have lost their relationship, as cooking is now only useful if you want 99 in it. I have 80 cooking, and haven't trained it since I had around 80 fishing (99 now.) What I did is I gladly sold my monkfish for anywhere between 312 gp and 389 gp. I was able to get most of my fletching done when making it was still very profitable (60,000 coins to the 1,000 yew longbows if I remember correctly.) And finished when I barely made 10,000 coins per 1,000 bows. Now, with yew logs at an outrageous 444coins each soon fletching will become obsolete, in that particular way. Other skills to have met the greater part of the guillotine are smithing, firemaking (duh), and herblore.

 

 

 

EDIT: Not trying to gather people to chance the market or anything, just giving my two cents about my opinion of the economy.

 

 

 

 

 

To sum up my brief article, I would like to pose these questions:

 

What do you think players should do to confront these issues?

 

Are these issues even confrontable?

 

Which does a player care more about, the item they want to go down or the item they have to go up?

[777thzapster]

In the end this economy is fearful of losing any money in an item, so instead of holding onto it everyone does sell on the downturn and buy on the upturn. I don't think you can change millions of peoples thoughts so they don't sell on the way down. I just kind of ride every wave, selling at the peak and buying at the bottom of the hill.

[la la la]

I fear the day that runecrafting is like cooking and fletching. Actually, it will never come, but think about if it did... Eek.

[00hydro]

Well it practically did, if you notice, every stride that it takes is just bigger and bigger. At one point essence was almost the same as a nature rune at 200 gp each. Yikes.

[Inuashakent]

Fletching already became obsolete a few months back, when it cost a few mil to get 99. Now Yew longs are back up.

 

 

 

The amount of money coming in for GWD does not even compare with the supply of GWD armour. Remember that there are many, many people doing Bandos. In fact, it's almost impossible to find an empty Lootshare world. The rich get richer (already have expensive equipment) and the poor get poorer. This... is... RUNESCAPE.

[hohto]

One basic idea of the price finding an equilibrium is the belief of the price change.

 

 

 

Lets take this Sara sword for example. If the item costs X gp today but the trend is dropping, most rational people wait for tomorrow and probably even longer before investing on it. This lowers the current demand. Same time people who are wanting to get rid of theirs are trying to minimize the losses and increase the supply by dumbing their items to the GE. We all know what kind of results are being followed from increased supply and decreased demand.

 

 

 

Same of course works backwards too. Eventually the price is low enough for people to increase the demand an decrease supply due the belief of a rise: we've seen this with dfs's for example in a larger scale. They dropped, stabilized and started the growth: people were interested in profit and started to buy them in order to get profit from the rising prices. This increased demand of course boosted the price as the demand increased and supply decreased.

 

 

 

Now, you may start to have a defensive that because of all the people that go to Godwars, more hilts etc. are brought into the game and that lowers the price. Well while that might happen, at the same time more people are getting more money. This means that ones who may not be able to afford a Godsword now can. This would average itself at and cause little to no price in/deflation. Some argue that it's the rich that get richer, but I know that you don't have to be rich to get rich.

 

 

 

I'd like to remind you that the amount of people who can enjoy that increased possibility of easier money is quite small. The people who are doing godwars in larger numbers are those who aren't first thinking of buying godswords, at least not many. This means that the gp gotten from hilts is usually centralized to a small minority while the ones who would want a godsword are struggling with other ways of gaining money.

 

 

 

A good example of this is to check the drop and level section of tip.it. Most of the drops are gotten by people who already are wealthy and most of the people who have gotten an example level (such as 99 herblore, craft, con, etc) are saying they got the money from god wars. Here's the catch: people are doing god wars in larger scale in order to get money, not because of godswords themselves.

[platinum1004]

what drives the economy? Skill capes...

 

 

 

there used to be a desire to raise a skill to make an item you needed for something else, now its to get a cape - im currently chopping teaks and firemaking........ WHY!!!! it achieves no positive end product and helps me financially not at all (currently 95 wc, 99 really isnt going to make me that much faster for the effort)

 

 

 

lootshare brings huge wealth into the economy as items are gained and in my understanding sold at mid price without an item being introduced necessarily into the economy, as has been stated the wealth is then ploughed into skilling items (gold ore currently 507gp!) or money sinks like construction and summoning

 

 

 

prices rise and crash on new item or skill introduction - thats runescape

 

 

 

often players asks me how to make money or what to train - my answer; forget the money, what do you enjoy doing and only earn cash if you need it for your favorite activity (my answer is invariably green dragons btw)

[hohto]

Skill capes...

 

 

 

On a larger scale I do not agree with this. It's true that certain things are done only for the capes, but with this logic people wouldn't even have a proper reason to have more than 2 99s or if they did, why would they get more xp in certain skills than is needed? Do people own every cape they could have? The sake of having a 99 was the thing that drove me to my pre-cape 99s and after the capes my motives have been other than just having the capes. I'm also sure I'm not the only one who thinks like this.

 

 

 

Lets take a closer look at this subject. Our #1 summoner has 54m xp and #2 has 38m. This means that two people have gotten so much xp in one skill that if it was divided equally, there would be enough for 7 99s. With your logic this wouldn't happen as the motive was the cape, not the case of reaching your goal. With the same logic people shouldn't have had overtrained skills before the capes.

 

 

 

lootshare brings huge wealth into the economy as items are gained and in my understanding sold at mid price without an item being introduced necessarily into the economy, as has been stated the wealth is then ploughed into skilling items (gold ore currently 507gp!) or money sinks like construction and summoning

 

 

 

The coinshare gives us the gp worth the minimum and sends the item to ge for mid. This means that for every GE'd hilt there's few mils drained off from the game: people get X amount of gp, someone buys it for X+Y and the Y just vanishes. In the other words the coinshare removes gp while it gives a nice liquidity to certain items.

 

 

 

prices rise and crash on new item or skill introduction - thats runescape

 

 

 

With this logic things such as price manipulation, new (+some times incorrect) information and expections do not affect to the items. I personally strongly disagree with this: We've seen many items going up and down even after the GE without any new updates or news on things that would affect to them. Santa hats few months ago are a perfect example of this.

 

 

 

It's true that the things you mentioned affect to the price, but you're exaggeratign the situation quite a lot.

[@Dan3HitU]

What drives our Economy

 

Mainly oil.

[hohto]

What drives our Economy

 

Mainly oil.

 

 

 

Don't get speculative trade substances :P

[Master_Smither]

Frankly I'd have to say merchants because there is skillers who spend their money mainly on skills, Pvp who well are doing BH, and finally Mvpers who kill monsters and supply thing to people who again spend their money no supplies or better armour. Merchants are the ones who spend a good chunk of their money on the GE inhope to make a profit. I am a merchant and I consider myself low leveled because I only merchant with 50M at a time and I'm sure real merchants spend over 100M at a time with ease. They are the ones who drive the prices up or down because well when you have 200M to spend and the SGS is rising you would buy as many as you can get making a 'false'* demand on the item. Then when you see fit you sell them all at once making the falsly* demanded items on the market again. Also since everyone trys to merchant these days it increases the peaks and valleys of a heavily merchanted item.

 

Take the DFS for example I just had bought 4 of them for 60M when they rose 2M and then I resold which I'm sure many people did but with just one maybe. Again the flase demand comes into play since I had no intentions of using them creating false demand. Now say 100 small timers bought 1 or 2 thats 100-200 DFS's that they weren't going to use that got bought up causing a rise. So well thats why the market crashs imo.

 

*I meen false but a not realy demand considering merchants don't use the SGS's they buy.

[platinum1004]

i appreciate your right to disagree and i wasnt implying skill capes are the "only" factor that drive the economy but they have had a large impact on it. maybe i should have been clearer

 

 

 

why wouldn't you want a 3rd or 4th cape, im not suggesting skill capes because people want a trimmed cape with its bonuses but because they want capes for the recognition of having that cape (in the same way you did getting 99 pre capes - capes are visible way of displaying your achievement - equally (sadly) there is an implication if you dont wear one). when you multiply the numbers of people striving for these capes then that does have a significant impact on the raw materials of creating the cape - why are yews so much? maybe because people are cutting willows, and whys that? mainly for fast exp for a WC cape.

 

 

 

please dont take an extreme and use it dismiss my suggestion it is clear you have a higher intellect than that

 

Lets take a closer look at this subject. Our #1 summoner has 54m xp and #2 has 38m. This means that two people have gotten so much xp in one skill that if it was divided equally, there would be enough for 7 99s. With your logic this wouldn't happen as the motive was the cape, not the case of reaching your goal. With the same logic people shouldn't have had overtrained skills before the capes.

 

there is clearly a race for no1 status in your example which is likely to continue - check the highscores for skills that stop around 13m - yes some will go past but the majority do not

 

 

 

thank you for correcting me on lootshare, it wasnt an area i have researched. But are you certain items are sold at mid, what if no one buys that day, do they automatically stay in GE at an adjusting mid price forever? I dont know so and havent seen enough data to make an informed assumption that the items are sold.

 

 

 

new items or skills do impact and drive the economy in a new direction? how can they not? oak logs after construction? seconds after summoning? even normal logs after balloons. im not saying they solely drive the economy but they will impact on it, rares have traditionally dropped at these times to release cash (either for skillers or merchanters).

 

 

 

I thought santa hats rose earlier this year because the santa suit won the christmas release vote, merchanters spotted the opportunity to make some cash and did so.

 

 

 

as you are well aware the economy if multi faceted and I was merely suggesting areas which have had a reasonably large impact upon it, collectively many events drive the economy and some major ones will impact the direction - a couple of which were what i was seeking to highlight

[hohto]

why--cape.

 

 

 

What you're saying here is that the capes themselves are the reason why people go to get 99 cooking or fletching after melees. I'd disagree with this really strongly.

 

 

 

why are yews so much? maybe because people are cutting willows, and whys that? mainly for fast exp for a WC cape.

 

 

 

Ask yourself do the people want a 99 or a cape. With this logic the number of people cutting yews should be creatly higher than the people cutting willows in f2p. With this logic I did willows on my 99 wc because I wanted to get a cape which I never even bought. I personally see people getting 99s in f2p, I saw them getting those before the capes and I even saw people rejecting to buy certain capes. Yes, capes do play a certain role but their role of the "decicion makers" is highly overrated.

 

 

 

Same way I'd like to ask you this thing. If you now were 98 in cooking, would you take 99 just for the sake of having a 99 or to get a cape that is worth next to nothing in the eyes of a large number of scapers? Would you walk from bank to bank wearing your precious cooking cape when you already had other capes which are both harder to get and actually are respected by a larger number of people?

 

 

 

there is clearly a race for no1 status in your example which is likely to continue - check the highscores for skills that stop around 13m - yes some will go past but the majority do not

 

 

 

With your exaggered example I stroke it down with another exaggered example. The point is that when you overestimate the causality between capes and 99s, you should also look at other factors.

 

 

 

thank--sold.

 

 

 

Coinshared items are said not to affect to the price according to the database. I'd personally believe that more than some research done by the players. I'd also say that most of the bought items are coinshared, not sold in the "real" way. Why? First of all due the nature of God wars, teams got a huge edge when compared to soloers when it comes to the number of good drops.

 

 

 

new -- merchanters).

 

 

 

I already said I agree with this part. However I disagreed with the level of it. It's part of the common sense that new updates tend to rise (usually temporary) the demand of certain goods, however those are definately not the only things that keep up the price changes. As long as there are manmade factors that could affect to the supply or demand greately (new or false information, speculation at high rates, manipulation, etc), the equilibrium will break.

 

 

 

I -santa-so.

 

 

 

This kind of jumps happened before the suit, during it and after it. The reason was price manipulation, the snowball affect and the will to profit from it.

[ManOv]

You're advice may be accurate, but to most people it common sense to not sell for lowest if you plan on making more of them.

 

But alot of people don't pay attention to the economy and also alot of people could care less if they drive the prices of yew longs up if it gives them an extra 10k proffit :s people dont stop to think anything through. >.<

 

 

 

~MoM

[Great_one]

the runescape economy is f'ed up all due to 2 things, skill capes and do-x's

[00hydro]

While I'm absolutely thrilled of the responses I've had to my topic, I would be even more so if I could have some opinions on the questions I stated at the end of my article. If you answered them in a non-direct way, I must have missed it.

[@Dan3HitU]

I'm still fairly confident that it's oil.