I suddenly feel very poor ...

 

 

 

 

 

 

 

I admire anyone who tried to get their heads around the maths of this, I have trouble adding up how much I should be paying for my lobbies.

 

 

 

 

 

 

 

Only Jagex knows, and they say there is too much money swilling around.

 

 

 

 

 

 

 

I would guestimate its at least double what anyone has said so far tho.

 

 

 

 

 

 

 

I'm up for a guess at 50 trillion!

 

 

 

 

 

 

 

The rares market:

 

 

 

I cannot create a rare. Neither would I (in my right mind) destroy one. I must buy one from another player if I wish for one. (I own a mask set and a santa)

 

 

 

Therefore there is no way for me to implement these items in any sort of economy, they are equivalent to cash as backing store. They do trade, but they aren't part of the economy since they don't generate or destroy any cash value. There's nothing I can do with my red mask which would create cash. I could merchant it, but then I'm merely manipulating already existing cash.

 

 

 

 

 

 

 

I'm not entirely sure what you mean by "How does 300 yew longs a day relate to 1 steel plate?" though. Care to elaborate?

 

 

 

 

 

 

 

First of all, I will like to point out to you that this article is discussing on how many gold pieces are in teh RS economy, not how big the RS economy is. Thus, having prior knowledge to economics, or better yet, accounting would help enormously.

 

 

 

 

 

 

 

Now, what Duke written here by "Sink" and "Generator" considers actual gold lost or gained, not cash value. This is because if one player spent 1.2k gp for 5 iron and 10 coal, the gold pieces is not lost from teh economy. It's simply a transfer of gold from one player to another.

 

 

 

 

 

 

 

The only way you can actually LOST gold pieces if it no longer stays within access of any players: ie purchases from stores, repairs, quests, etc.

 

 

 

 

 

 

 

 

 

 

 

Comparing to real life, Duke's measurement would be the "currency" circulated by the Federal Reserve, which stands at$719.9 billion at 2004. While the figure you're looking for is the national GDP, which is $12 trillion at 2004 Q4. (US economy only)

 

 

 

 

 

 

 

Party Hat is not gold pieces, Halloween Masks are not gold pieces, Steel plates are not gold pieces, only gold pieces are gold pieces.

more then that in economy

Yep, primadog basically said it all already.. I'm not looking at the total size of the economy, but just at the total of cash ingame. Seeing inflation is or should be nearly linear with cash creation (I'm sure people know the stories of governments "creating" money when they needed it, which in turn let to huge inflation), these numbers are very important, as we can clearly see that the inflation percentage based on "cash creation" is very high.

 

 

 

 

 

 

 

The total value of the economy is something totally different. Rares are part of it though, because the total value of the rares market is way too large to say rares aren't a significant part of the economy. The total value of the economy definately is multiple times higher though.

 

 

 

 

 

 

 

I'm not entirely sure what you mean by "How does 300 yew longs a day relate to 1 steel plate?" though. Care to elaborate?

 

 

 

 

 

 

 

You can't honestly believe those two things take the same amount of time to make.

Hi Duke :)

 

 

 

 

 

 

 

Very interesting topic. I liked the way you came up with your estimates, very creative mathematical analysis. Even if the estimates are off, they do show a basic trend which I think is correct, that cash is entering the active merchanting economy much faster than it is exiting. This puts high inflationary pressure on those few items in the game whose numbers are not also increasing at similar rates, i.e. rares.

 

 

 

 

 

 

 

For those of you saying this is only a game ... very true. But it's also a virtual world, and serious studies in law, economics, sociology, psychology, ethics, and politics are beginning to look at virtual worlds as interesting places to do research. So there is merit in these discussions.

 

 

 

 

 

 

 

Here is my idea to drain the economy:

 

 

 

 

 

 

 

Jagex should implement a lottery that pays out every 24 hours. Tickets cost 100K each. Players can buy as many tickets as they desire, subject to their available cash, of course.

 

 

 

 

 

 

 

Each day, one ticket is selected as a winner. That ticket automatically turns into ONE of the old tradable rares, or one from a list of new ones. The other tickets vanish from player inventories, and the lottery is reset for the next day. I know that Jagex has the code for this sort of thing, as similar mass item transmutations were put in place for the past Easter event, with the rubber chicken and Easter chocolates. Here are some examples of potential lottery winnings:

 

 

 

 

 

 

 

cracker

 

 

 

party hat (any color)

 

 

 

halloween mask (any color)

 

 

 

santa hat

 

 

 

pumpkin

 

 

 

easter egg

 

 

 

disk of returning

 

 

 

 

 

 

 

.... and some new ones ....

 

 

 

 

 

 

 

dunce cap

 

 

 

party hat (orange, black)

 

 

 

zorro mask

 

 

 

heart-shaped box of chocolates

 

 

 

 

 

 

 

Note, there should be server-wide messages as the lottery runs, and winners should be announced in the MOTD. This will add hype to the whole lottery thing, and get lots of players involved and excited, in all likelihood.

I think it is pretty good, except (as stated above) the smithing is gonna be off, somewhat. I, as do many others make knives, darts, and arrows out of my bars. Id rather get more exp out of the bar (smithing exp, ranging exp) then just money.

 

 

 

 

 

 

 

Also, a lot of people use lower logs for fletching (even above 75), since theyre cheap, easy to get, and little loss. You can go to nearly any general shop in the game, and theres usually over 100k unstrung willow longs alone, and sometimes others.

 

 

 

 

 

 

 

I may be completely wrong, but thats just my opinion.

Nice article.

 

 

 

 

 

 

 

Now try calculating the total Net Worth of Runescape.

 

 

 

 

 

 

 

There would be two parts to this -- the "direct" net worth (if all players' items were sold to the general store, or high alched minus store price of nature runes) how much cash would there be added.

 

 

 

 

 

 

 

The "indirect" one is how much over the direct cost is the market price of items. That is, on the average player market price, how much is everything in RS would be worth?

 

 

 

 

 

 

 

The direct+indirect = total net worth of RuneScape items.

 

 

 

 

 

 

 

You then can proceed dividing the indirect net worth by the totalgp, in order to calculate the percentage of gold backing of the economy. (Very important figure in real life budgets). Why is the formula for that (indirect / gp) or ((total-direct) / gp)? Because the direct "alchable" worth is backed by itself, just as if that part of the items had an X amount of coins welded into themselves, and thus should be treated as cash. You however cannot use (indirect / (direct+gp)), because the indirect price excess only exists so long as the item does; if an item is alched or sold, the direct cash is released, but the surplus market value no longer exists.

Yes, calculating the total item networth and trying to figure out what the relation of GP on real (or what EugenyG calls indirect) item value would be, is the next logical step. Sadly, it will be much tougher (impossible?) to (gu)estimate. I can't think of a reasonable way to back it up with statistics.

 

 

 

 

 

 

 

Although I completely agree with your formula and the way networth estimates should be analysed, I do think intrinsic value (direct value) is a bit more complex then that.

 

 

 

 

 

 

 

Yes, you subtract the intrinsic value (which is the high alch value of the good for finished goods) of finished goods (for example: strung yew long) and put that in the group of direct value and the rest in the group of indirect.

 

 

 

 

 

 

 

But how about the yew log (and in a later stadium: unstrung yew long) and the bow string the strung yew long was made? Exactly, these items derive some of the intrinsic value of the finished good.

 

 

 

 

 

 

 

if an item is alched or sold, the direct cash is released, but the surplus market value no longer exists

 

 

 

 

 

 

 

Another interesting thing to think about is this (although it's not the case right now). There have been times when high alching finished goods was profitable (like in: you could buy a finished good+nature 100gp and alch it for 110gp). However, this also implies that the finished goods market value was negative! (100 - 110 = -10)

 

 

 

 

 

 

 

Now if I were to make a really weird statement like I tend to do sometimes, then I would try to look for a real life "good" with a negative market value. Ironically, the only type of "good" with negative market value I can think of is chemical compost and trash. :lol:

 

 

 

 

 

 

 

What we do can conclude is that rares are even more expensive as they may seem already. Because they have no intrinsic value, their full worth is made up by the real value, whereas the real value of other items may be anywhere from 10 - 90% of the value at which they are sold.

What we do can conclude is that rares are even more expensive as they may seem already. Because they have no intrinsic value, their full worth is made up by the real value, whereas the real value of other items may be anywhere from 10 - 90% of the value at which they are sold.

 

 

 

 

 

 

 

Then the real value of rares is like 0,000000001% of the value they are sold.

 

 

 

But why that means rares are even more expensive as they seem :?:

 

 

 

 

 

 

 

Then the real value of rares is like 0,000000001% of the value they are sold.

 

 

 

But why that means rares are even more expensive as they seem :?:

 

 

 

 

 

 

 

 

 

 

 

Intrinsic - alch value, the amount of gold pieces it represents if you convert it to cash

 

 

 

 

 

 

 

real - it's actual market value minus alch value

 

 

 

 

 

 

 

 

 

 

 

Might be a confusing use of word.

who better to write about it then duke freedom, hey man

 

 

 

 

 

 

 

 

Then the real value of rares is like 0,000000001% of the value they are sold.

 

 

 

But why that means rares are even more expensive as they seem :?:

 

 

 

 

 

 

 

 

 

 

 

Intrinsic - alch value, the amount of gold pieces it represents if you convert it to cash

 

 

 

 

 

 

 

real - it's actual market value minus alch value

 

 

 

 

 

 

 

 

 

 

 

Might be a confusing use of word.

 

 

 

 

 

 

 

I understood that, thanks :wink:

 

 

 

I just don't get why duke says it means rares are even more expensive than they seem.

Great guide, I enjoyed reading it. The way I look at it, there are 100 millin people on Runescape at any given time. Each of those probably have at least 100 gp. Many have at least 1000. Some have a million or more.

 

 

 

Haha... that's about as deep as I can get.

 

 

 

I only noticed one gap in your guide--surely dying should factor into your guide? Like, you know, getting killed in the Abyssal Dungeon and losing that full zammy you saved so hard for (no, this didn't happen to me).

Yes, calculating the total item networth and trying to figure out what the relation of GP on real (or what EugenyG calls indirect) item value would be, is the next logical step. Sadly, it will be much tougher (impossible?) to (gu)estimate. I can't think of a reasonable way to back it up with statistics.

 

 

 

 

 

 

 

Although I completely agree with your formula and the way networth estimates should be analysed, I do think intrinsic value (direct value) is a bit more complex then that.

 

 

 

 

 

 

 

Yes, you subtract the intrinsic value (which is the high alch value of the good for finished goods) of finished goods (for example: strung yew long) and put that in the group of direct value and the rest in the group of indirect.

 

 

 

 

 

 

 

But how about the yew log (and in a later stadium: unstrung yew long) and the bow string the strung yew long was made? Exactly, these items derive some of the intrinsic value of the finished good.

 

 

 

 

 

 

 

if an item is alched or sold, the direct cash is released, but the surplus market value no longer exists

 

 

 

 

 

 

 

Another interesting thing to think about is this (although it's not the case right now). There have been times when high alching finished goods was profitable (like in: you could buy a finished good+nature 100gp and alch it for 110gp). However, this also implies that the finished goods market value was negative! (100 - 110 = -10)

 

 

 

 

 

 

 

Now if I were to make a really weird statement like I tend to do sometimes, then I would try to look for a real life "good" with a negative market value. Ironically, the only type of "good" with negative market value I can think of is chemical compost and trash. :lol:

 

 

 

 

 

 

 

What we do can conclude is that rares are even more expensive as they may seem already. Because they have no intrinsic value, their full worth is made up by the real value, whereas the real value of other items may be anywhere from 10 - 90% of the value at which they are sold.

 

 

 

 

 

 

 

Please don't refer to indirect as "real", because real implies total, and my definition of indirect is total-direct. If anything, use real for total and surplus for indirect.

 

 

 

 

 

 

 

I think the way to approach it is to take a "snapshot" (or KINETIC) analysis when figuring out the indirect and total values. Yes, items can further be processed and their value thus changed, but the POTENTIAL value of the items is already expressed on the open market in the difference that equals the total-direct price. This surplus value for most items can be roughly estimated as "benefit to player / time*effort required to extract that benefit", where benefit can range anywhere from experience gained to prestige, and time is self explanatory. Items that have a low surplus benefit over the current state of the benefit in the unprocessed item have a lower difference in surplus price, and the longer the required time or effort required to extract that benefit, the lower the difference as well.

 

 

 

 

 

 

 

This formula also explains why rares have such a large surplus difference in price -- their market price is millions, yet their direct price is 0 gp really. Since benefit is very large (in terms of prestige, as well as further investment value). The time factor is instantaneous for prestige; while it is long-term for increase in market value, the effort required to gain that increase, once the item is bought, is 0 (just leave it at bank, you don't need to do anything).

 

 

 

 

 

 

 

On another note -- if you really want to count inflation, it is not enough to know the total amount of GP in game. You also need to know the relation of GP to items (what we just talked about), and also VERY IMPORTANTLY the relation of GP per PLAYER IN THE GAME. There are more GP out there, but there are more players as well, and because of the increase in players the surplus GP generated is significantly more dilute (new players are low level and don't generate nearly as much money as high level players) than if we had that huge surplus gp generation with a fixed amount of people.

I understood that, thanks :wink:

 

 

 

I just don't get why duke says it means rares are even more expensive than they seem.

 

 

 

 

 

 

 

Let me give an example that might clear it up for you. Let's say a blue phat costs ~70mil right now and that you can buy steel bars ~550gp ea. That means you could buy ~127K steel bars with your blue phat.

 

 

 

 

 

 

 

However, if you would make all those steel bars into steel plates you would get 900gp per plate, or in other words, 180gp per steel bar back. This (intrinsic) value should be subtracted from the total value of the steel bar, because it has nothing to do with what people would be willing to pay for a steel bar if it didn't have 'mysterious high alch values'. So a steel bar would cost ~370gp then. The blue party hat doesn't have any mysterious high alch value, thus its price is still 70mil.

 

 

 

 

 

 

 

Now dividing 70mil by 370gp ea, shows that you can buy ~189K steel bars with your blue phat. Your blue phat can buy nearly 50% more bars then it may seem in the first place, thus the worth / buying power of rares is actually a lot higher then it seems too.

 

 

 

 

 

 

 

Please don't refer to indirect as "real", because real implies total, and my definition of indirect is total-direct. If anything, use real for total and surplus for indirect.

 

 

 

 

 

 

 

I think the way to approach it is to take a "snapshot" (or KINETIC) analysis when figuring out the indirect and total values. Yes, items can further be processed and their value thus changed, but the POTENTIAL value of the items is already expressed on the open market in the difference that equals the total-direct price.

 

 

 

 

 

 

 

I disagree with this. If we take the example of strung yew longs (~550) + nat (~300) subtract their high alch value, we would get an "indirect" value of the strung yew long of ~80gp. If we take a bow string + yew log (~450 for both) and subtract high alch values of them (somewhere below ~100gp) that means you have to pay 350gp to buy a bow string and a yew log. Fletching them to a strung yew longbow would make you loose 270gp.

 

 

 

 

 

 

 

But that's not true. Strung yew longs total price was 550, and the material total price was 450; fletching a bow string + yew log to a strung yew long actually makes 100gp. The conclusion we have to make is that yew logs and bow strings derive a high percentage of their value from the high alch value of the strung yew long.

 

 

 

 

 

 

 

Regarding inflation, it is also interesting to know that in the time I estimated the total gp's ingame to three-double (from december 2004 to september this year), the total rares market four-doubled in value; this should somewhat back up the figures I gave too.

 

I understood that, thanks :wink:

 

 

 

I just don't get why duke says it means rares are even more expensive than they seem.

 

 

 

 

 

 

 

Let me give an example that might clear it up for you. Let's say a blue phat costs ~70mil right now and that you can buy steel bars ~550gp ea. That means you could buy ~127K steel bars with your blue phat.

 

 

 

 

 

 

 

However, if you would make all those steel bars into steel plates you would get 900gp per plate, or in other words, 180gp per steel bar back. This (intrinsic) value should be subtracted from the total value of the steel bar, because it has nothing to do with what people would be willing to pay for a steel bar if it didn't have 'mysterious high alch values'. So a steel bar would cost ~370gp then. The blue party hat doesn't have any mysterious high alch value, thus its price is still 70mil.

 

 

 

 

 

 

 

Now dividing 70mil by 370gp ea, shows that you can buy ~189K steel bars with your blue phat. Your blue phat can buy nearly 50% more bars then it may seem in the first place, thus the worth / buying power of rares is actually a lot higher then it seems too.

 

 

 

 

 

 

 

Oh i got it now thanks :D

 

 

 

As there's no money return on rares, their value is really what you pay for them, while with things like bars or bows there's a return by high alching, wich makes it cheaper :)

 

 

 

 

 

 

 

Thanks for the explanation, thinking stuff like that prooves that you really deserve all your wealth, and shwos what a real merchant is like :wink:

Last edited by Zezima on Tue Sep 11, 2001 9:03 am; edited 343 times in total

impressing duke.. 8)

 

 

 

 

 

 

 

next stop wallstrees?

hey, duke freedom do u remember a dude named Dragonfuri from Runescape Classic?

 

 

 

we used to be friends. it was like a year ago, u used to be a merchant and sold rune stuff i think. you bought and sold stuff, u had like 200 santa hats on runescape Classic right? i didn't know u still played, anyway i used to know you before rs2 came out

i was going good up to the part about indirect, direct, total, real etc values lol

 

 

 

 

 

 

 

Let me give an example that might clear it up for you. Let's say a blue phat costs ~70mil right now and that you can buy steel bars ~550gp ea. That means you could buy ~127K steel bars with your blue phat.

 

 

 

 

 

 

 

However, if you would make all those steel bars into steel plates you would get 900gp per plate, or in other words, 180gp per steel bar back. This (intrinsic) value should be subtracted from the total value of the steel bar, because it has nothing to do with what people would be willing to pay for a steel bar if it didn't have 'mysterious high alch values'. So a steel bar would cost ~370gp then. The blue party hat doesn't have any mysterious high alch value, thus its price is still 70mil.

 

 

 

 

 

 

 

Now dividing 70mil by 370gp ea, shows that you can buy ~189K steel bars with your blue phat. Your blue phat can buy nearly 50% more bars then it may seem in the first place, thus the worth / buying power of rares is actually a lot higher then it seems too.

 

 

 

lets retrack this. 70mil for a blue phat (market cost) = the cost of 127k steel bars. you can only make 25,400 plates with this, giving you a high alch income of 30.5 mil. youre not making more money than you spent, so comparing the value of the p hat for the income of what you traded it for doesnt work

 

 

 

 

 

 

 

of course, as you said, if steel bars were to drop to 370 each, then you would get more steel bars for the price of your p hat, but still not enough to make 70 mil when alched

 

 

 

 

 

 

 

the real value of rares is that its an extremely lucrative investment. because its value always appreciates over time means that owning one will make you richer than you were when you bought it. for this reason, everybody that wants to get rich for pretty much doing absolutely nothing for a few months will want to get their hands on a rare, and the demand goes up, making the phats an even better investment, and making the demand go up more

 

 

 

 

 

 

 

maybe some of the concepts you talked about (comparing spending 70 mil to high alching 70 mill worth of steel) flew over my head, but thats how i see it. rares are not worth their cost in real value, only percieved value

i was going good up to the part about indirect, direct, total, real etc values lol

 

 

 

 

 

 

 

Let me give an example that might clear it up for you. Let's say a blue phat costs ~70mil right now and that you can buy steel bars ~550gp ea. That means you could buy ~127K steel bars with your blue phat.

 

 

 

 

 

 

 

However, if you would make all those steel bars into steel plates you would get 900gp per plate, or in other words, 180gp per steel bar back. This (intrinsic) value should be subtracted from the total value of the steel bar, because it has nothing to do with what people would be willing to pay for a steel bar if it didn't have 'mysterious high alch values'. So a steel bar would cost ~370gp then. The blue party hat doesn't have any mysterious high alch value, thus its price is still 70mil.

 

 

 

 

 

 

 

Now dividing 70mil by 370gp ea, shows that you can buy ~189K steel bars with your blue phat. Your blue phat can buy nearly 50% more bars then it may seem in the first place, thus the worth / buying power of rares is actually a lot higher then it seems too.

 

 

 

lets retrack this. 70mil for a blue phat (market cost) = the cost of 127k steel bars. you can only make 25,400 plates with this, giving you a high alch income of 30.5 mil. youre not making more money than you spent, so comparing the value of the p hat for the income of what you traded it for doesnt work

 

 

 

 

 

 

 

of course, as you said, if steel bars were to drop to 370 each, then you would get more steel bars for the price of your p hat, but still not enough to make 70 mil when alched

 

 

 

 

 

 

 

the real value of rares is that its an extremely lucrative investment. because its value always appreciates over time means that owning one will make you richer than you were when you bought it. for this reason, everybody that wants to get rich for pretty much doing absolutely nothing for a few months will want to get their hands on a rare, and the demand goes up, making the phats an even better investment, and making the demand go up more

 

 

 

 

 

 

 

maybe some of the concepts you talked about (comparing spending 70 mil to high alching 70 mill worth of steel) flew over my head, but thats how i see it. rares are not worth their cost in real value, only percieved value

 

 

 

 

 

 

 

Well, I think an important comment was made in this post, and that's the fact that you can purchase Rares with items other than GP. Because other players acknowledge the values of many artifacts in the game, and accept them in trades at an exchange of equal or slightly under Market Value, it allows for a much more complicated economy. This is why we saw such a drastic increase in Rare prices upon the release of Slayer, due to the extreme wealth created by Abyssal Whips. Basically, the amount of GP is not the only Market Indicator as far as prices go; the ease of acquiring wealth in General is the real determinant of values.

pfff too much to think of

Well, I think an important comment was made in this post, and that's the fact that you can purchase Rares with items other than GP. Because other players acknowledge the values of many artifacts in the game, and accept them in trades at an exchange of equal or slightly under Market Value, it allows for a much more complicated economy. This is why we saw such a drastic increase in Rare prices upon the release of Slayer, due to the extreme wealth created by Abyssal Whips. Basically, the amount of GP is not the only Market Indicator as far as prices go; the ease of acquiring wealth in General is the real determinant of values.

 

 

 

yeah the ease of getting expensive items means that more weath is coming into the economy, but not necessairly MORE GP. when a player with full dragon, barrows and 50 masks, hats, santas gets banned, it technically doesnt affect the amount of gp in circulation, unless he also had liquid cash in his account as well. if i get a whip, dragon spear or dharok axe, and i use it myself or sell to a player, it doesnt affect the amount of gp in circulation. in fact, its fairly safe to say that rares and expensive items will NEVER be alched or sold to shops, and can not add gp to the economy

 

 

 

 

 

 

 

i think duke's evaluation isnt meant to give an idea of the total value of everything everybody owns in runescape, but to estimate how many gp is in game. i think he did a pretty good job

maybe some of the concepts you talked about (comparing spending 70 mil to high alching 70 mill worth of steel) flew over my head, but thats how i see it. rares are not worth their cost in real value, only percieved value

 

 

 

 

 

 

 

I think you misunderstood. I didn't say the intrinsic (aka the high alch value) worth of a blue party hat was 70mil, but I tried to explain that a party hat can buy more then 127K steel bars if you keep 'reinvesting' the money you get from high alching the steel plates you make and keep on doing thus till you have no money and no steel plates left. If you would do that you could effectively buy a total of 189K steel bars.

 

 

 

 

 

 

 

Also I didn't (ment to) say 'if steel bars dropped to 370 ea' - I ment that steel bars were only worth 370gp each if you subtracting 1/5th of the high alching cost minus nature cost. Thus that's the 'real' price you actually pay for steel bars.

 

 

 

 

 

 

 

Also: real value = perceived value = market value. The high alch values set by Jagex have no meaning other then minimum wholebuyer prices.

 

 

 

 

 

 

 

Because other players acknowledge the values of many artifacts in the game, and accept them in trades at an exchange of equal or slightly under Market Value, it allows for a much more complicated economy. This is why we saw such a drastic increase in Rare prices upon the release of Slayer, due to the extreme wealth created by Abyssal Whips. Basically, the amount of GP is not the only Market Indicator as far as prices go; the ease of acquiring wealth in General is the real determinant of values.

 

 

 

 

 

 

 

Yes, this was shown the most clearly with the introduction of slayer and the Slayer Richness caused by the whip. However, if the total item value grows too fast versus the total GP ingame the effect can be a 'shortage' of gp and that could eventually lead to price dropping of many (different types of) items. Looking back at the times of Slayer I believe that was the case for dragon meds and dragon squares for sure.

 

 

 

 

 

 

 

pfffft 300 bil...

 

 

 

 

 

 

 

lol i jk, it was orignally 1000k and i did some editing to it :mrgreen: .

 

 

 

 

 

 

 

those are some nice stitstics there nice job :wink: .