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.

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 :P 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.

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

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.

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.

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.

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.

Thanks dogfever for clearing it up a bit ^^.

 

 

 

Aah well, sometimes your right sometimes your wrong! many apologies all.

 

 

 

It's ok - to be honest I infact did not know the other definition of the word utilitarian till your post and only found out about it till I looked it up (I'm not english - for as much that is an excuse), but Paulhartman clearly ment the more economical definition of it.

 

 

 

He's using it wrong however; economics does not make a difference between collectables and "useful" items regarding utility - and you surely cannot compare a painting of Rembrandt with some painting made by your kids in terms of value nor utility as it is defined by economics.

 

 

 

Nevertheless I suppose you are slightly right that I'm arguing too little on the subject itself, which I may have been doing as he posted a lot of extreme point of views on the other topic he created saying things that rares are totally unimportant, which just isn't based on anything and basically saying that anyone who didn't agree with him doesn't know what he's talking about.

 

 

 

As in his last reply he is at least taking my point of view a bit more seriously, I guess I'll do an attemp to create some more intelligent debate to go on here.

 

 

 

rares no not hold down inflation in Runescape, which was the main point I was debunking.

 

 

 

While in the current situation of nowadays, rares are less important regarding that issue then they used to be, say, 2-3 years ago, when there were practically no high-cost items (like dragon chains, whips and all the like) they still do function a bit for that as well.

 

 

 

By the way, I'm pretty sure Syko ment to say that rares "take (a big part) of the effects of the inflation" (where the inflation is, obviously, caused by money growth).

 

 

 

If your arguement is true and rares do not hold down the inflation, then where is all this gp going to?

 

 

 

Mind you that the material prices have bearly changed in price over the past 3 years, and if they did, it was only because of an update Jagex had. Pseudo-rares are always going downwards due to their simple nature of not being limited as rares are - so really I'm not going to believe they take care of the whole inflation issue either. Still, I'm sure you agree the gp has to go somewhere, and the only thing that is left, are rares.

 

 

 

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.

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.

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.

:oops: It was 3am, I was tired but not ready to go to sleep.

 

 

 

You totaly blew what I said out of context, Duke understood and corrected what I said.

 

 

 

You also replyed to my post with ignoring the first half of it. Then you go on to say to someone else "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. "

 

How can you say "I dont believe there is a rare problem" when just a day, maby 2, prior to this post you made a topic "time for rares to go".

 

You cant say "contrary to everything previously written" to try to dismiss somehting written just days ago by yourself and expect people to pretend that topic never existed. This topic, true, may not have bashed rares itself, but your last did.

 

 

 

As I said, Im not trying to make a huge discussion or arguement over it.

 

 

 

 

 

 

 

Also someone mentioned about people interested in RS economics with ages, studies, and backgrounds, etc...

 

 

 

Im 21, majoring in Architecture. Currently in my 3rd year of 6. I have taken a few economics classes, so i ahve some knowledge in it, but im not an economics major and im not all knowing in the subject, so im not trying to make a huge discussion involving myself, however, I am intested in RS economics.

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.

 

 

 

yo it was sort of a rhetorical question which i proceded to answer myself to shed furter light on the debate...

 

 

 

tke my system analogy

 

 

 

INPUTs

 

woodcutting

 

drops (barrows)

 

fishing

 

mining

 

spawns

 

 

 

Inputs of value. can be sold to generate coin

 

 

 

PROCESSES

 

smithing

 

cooking

 

fletching

 

 

 

In short. increasing the value of raw materials (think secondary industry)

 

 

 

OUTPUTS (cant remember my word...) DRAINS (duke freedom)

 

 

 

NOTE: not player to player transfer detailed by paulhartman in the original post but actual money being aken out of the game.

 

 

 

pre-construction

 

 

 

shops taking cash for drag weapons

 

boat trips...

 

 

 

as you can see far more coin was being created than drained from the runescape economy. phats had become a sort of store for these vast sums of cash.

 

 

 

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....

 

 

 

:!:

The total demand is the amount of money in circulation multiplied by the speed at which money is spent. People saving up on cash lowers the speed of spending. So people saving up money for a rare does slow down the speed in which money is spent a bit.

 

 

 

The second thing slowing down general money circulation is the speed in which products are made. It takes time to chop 1K magics or mine 1K coal. Buyers have to wait until the producers are ready. Since rares are not produced but held and easily transfered, rares have little effect on this.

 

 

 

The third thing that slows down money circulation is trading time. It takes time to buy and sell things. The time you spent on the forums and running around markets cannot be spent alching or producing.

 

 

 

Production of new cash by alching however takes time too. As the total amount of gp increases, prices go up, and there comes a point where people start alching less because barrows and other activities make faster money than alching. I myself havent alched magic longs for months, doing other things instead, although I used to alch a lot in the past.

 

 

 

There is another factor related to the economy: willingness to engage in the economy. Some activities, like questing or certain forms of training, do not require money. People doing those activities do not spend much money on those activities, and therefore have little interest in making it too.

 

 

 

Players buy 2 types of goods: 1) goods they want but cannot make themselves. 2) goods that they could make themselves, but when prices are low enough, it is more efficient to buy the goods. What is a high price and what is a low price depends on the speed at which the player can make money himself. High level runecrafters can make a lot of money per hour, and when the price of essence dropped to below 30 a few weeks ago, there was little point in mining essence yourself, when it was more efficient to simply buy the essence and use the time saved on extra rcing, which made the player more money than he lost on buying the essence.

 

When prices become too high, more and more players will simply do the work themselves, and the economy will slow down.

 

 

 

Runescape economy has a unique point in that producing gives xp which is a valuable commodity in itself. Many raw materials have a higher value than the finished product, which is where RS economy differs from the real world economy.

Ok that clears it up about the utility issue at least, although I'm not sure why we would want to consider the practical utility of items, as it's not really an important aspect in terms of economics? You can't derive the importance of an item for the economy by means of it's practical utility. Sure a bronze med has more practical use then a rare, but that's ignoring that it's a collectable, extremely wanted and thus highly priced.

 

 

 

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.

 

 

 

Yes, that's true. And in general yes, when people talk about RuneScape's economy they are usually only discussing rares. Although I agree it's a bit weird that there are very few topics created about the material market or the high-cost item markets in RuneScape, I must also say there is little to discuss about regarding those markets.

 

 

 

As I said, most materials have remained at the same price for years, and the only times they change in price is when Jagex adds an update that influences the supply or demand of the material.

 

 

 

Just to give an example, steel bars were 600gp 3 years ago when I started playing this game. They were 600gp 2 years ago, they were 550gp each after rs2 roughly a year ago and they are currently 650gp due to introduction of construction.. Chances are their prices are going to go back to 600gp each some time in the future again. All that said, what's left to discuss about them?

 

 

 

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.

 

 

 

Assuming that the supply grows at the same rate as the inflation is something totally different then proving it though.

 

 

 

Doing basic calculations there is no possible way I can conclude that the supply is growing at any rate near the inflation rate in this game. The rate at which the supply grows cannot take away all the effects of inflation. I'd really suggest you read the article I linked to in my previous post regarding that and check the population growth of the game on this site for that, as population growth is clearly the most important factor for supply increase.

 

 

 

For the person who asked, although personally I consider the information irrelevant, considering I've seen people claim to know all about economics on several occasions before, while they were promoting the most ridiculous idea's... Anyway, I'm 19 and studying both Applied Mathematics and Computer Science at university.

Yes, I meant to say "rares are not the economy"... great that I typed up a long post at midnight then forgot a word that changed its entire meaning!

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.

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....

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¦

Because for starters these threads are about rares. This in particular is banishing the theory that rares don't have much if any affect on the market. Which clearly is plain absurd.

 

 

 

Secondly you somplain about rares, give crazy solutions to get rid of them (seems like you dislike them?) based on the assumption that rich players should come back to reality.

 

 

 

If rares have little effect on you why are thinking up ways to get rid of them? That does not make sense. Your intrests in them would be about their fluctuating prices not about ways to push them out of here. Then if you did find rares intreasting as apose to dislike them you'd prefer them to stay in game because if they went out of game like you suggest they could no longer intrest you.

 

 

 

Lastly why do i keep replying? Because i wan't to find out what reasons you have for wanting rares gone. Aswell as your counter arguments to fact that if rares went all other items would go up in price. How can you contect that?

nice and interesting post, made me sit here for 15 mins reading :D .

 

 

 

runescape is one of the huge mmorpgs that have a very large economy and prices are unpredictable, so to be honest, runescape is like real life but in a moniter screen :D

The problem is, most of the rares and collectables, such as Rembrants in the real world, are relatively price-locked in their market worth. It isn't (barring some exceptions) very profitable to simply buy and sell collectables. Whereas, in Runescape, for those of the upper eschelon of the economy, it is relatively easy to make millions in profit within a day or two by buying and reselling rares, making rare merchanting the most time-efficiently profitable way of increasing upon wealth.

*Sigh* If person A pays Person B 250M cash then the money is simply transfered.

 

 

 

If Person A sell's their phat to this shop of your which you made up then they would i turn get 250M, as well as person B who has the 250M doubling the money the merchants have.

 

 

 

Think it through again please.

 

 

 

Shop? What shop? I've read the post through twice and found no mention of any shop. Then, just to be sure, did a CRTL_F search.

 

 

 

Tobeyfox is absolutely right in what he is saying. The number of rares in the game stays more or less the same. The prices may rise but leavers and bannings probably account for those, otherwise its just money moving around. But as I have said before, all this talk of 'Economies' and 'Inflation' is basicallly tosh because, unlike any 'Real World' situation (where these terms have a significant meaning), 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)

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.

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

 

 

 

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.

 

 

 

 

 

 

NO, real world economies are based on the resources of a given country i.e. oil or other mineral wealth. Central banks are run by these rich countries. They lend money to those countries which are deficient either in resources or the ability (wealth) to exploit them. Then they take that money back (with interest), putting already poor nations into further economic hardship.Thats why countries like the USA with vast oil & mineral deposits, as well as vast tracts of agricultural land, Great Britain, France etc. are extremely rich; whilst huge, mainly desert countries in Africa (who suffer from frequent droughts and poorly developed infrastructure) are extremely poor.

 

 

 

But that's a whole new (off) topic. The point is, banks dont just give money out for free expecting nothing in return, Runescape DOES.

 

 

 

If you don't believe me, either go to a bank and ask to borrow a million pounds or dollars; or go and cut down a tree and wait for it to respawn (I'm talking about REAL LIFE here)