Jump to content

Tip.It Times Presents: Inflation and the Runescape Economy


Kiara_Kat

Recommended Posts

The stronghold of security also brings money into runescape, 10k at a time.

 

 

 

Great article though, keep them comin'

Strangely with WotLK so near, I wished I could delay it a bit to push through that last TBC content in MH/BT :'(.

Link to comment
Share on other sites

  • Replies 59
  • Created
  • Last Reply

Top Posters In This Topic

personally i am not keen on another economic article although i do A-Level economics i still find these boring <.< . I much prefered the interviews with famous runescapers or possibly get some interviews with actual jagex staff. I mean no offense to the editor as it is a matter of personal preference i'm not quite sure but is this the 3rd economics article? still a big fan of tip it times O:)

Link to comment
Share on other sites

horrible article. so many words which basically said nothing. what was the conclusion of the article? more money coming in? items costing less, rares costing more?

 

 

 

no duh!!

 

 

 

its better to write nothing at all then the same dumb thing over and over.

 

 

 

If you dont understand what is written, please do not flame the author about it. That is fact of economy, it uses a few words..

 

 

 

if you have nothing nice to say, say nothing at all

 

 

 

Anyway, i like the articles, as per usual

tim_chenw2.png
6,924th to 30 hunting, 13,394th to 30 summoning, 52,993rd to 30 Divination

Kiln Record (Post-EoC): W 25 - L 0, 14 Uncut Onyx, 8 Jad hits received (Best record: Two in the same kiln)
Obby set renewed post update #2: 0

QBD drops: 21 crossbow parts, 3 Visages, 1 Kites, 2 Kits

Max Port Score [2205] Achieved: 27th April 2013 (World 2nd)

 

Farmyard Rampage ranking: 12th, 50,000 Kills.

 

Dragon Pickaxe Drops: 1 (Times after I first entered Battlefield: 2h)

Link to comment
Share on other sites

It appears the Runescape doesn't have "price inflation" so much as a shift in the relative value of goods. From what I have seen the shifts appear to be thus:

 

 

 

1) Rapid price inceases in un-generated rare items. This happens in any growing economy. You have more money entering the system and the rares not being generated.

 

 

 

2) Price inceases in cheap mass-demanded items. For example cow hides costing 100 gp. This is a result of higher skill levels allowing people to gather more valuable reasources (i.e. what level 50 miner is going to mine copper), and wealthy players who are willing to up there skills at a monetary loss.

 

 

 

3) Prices slightly decreasing in hard to obtain items. For example, rune prices going down. This is the result of more and more players being able to mine rune, kill dragons, et cetera.

 

 

 

Each item is going to fluctuate as the economy changes; unless you change the game into "command economy"; i.e. have npc's buy and sell in unlimited quanities a fixed prices.

 

 

 

 

 

Finally, Runescape's chief economic weakness is fiat(-ish) currency. Fiat currency is money that can not be exchanged for goods on demand. I said fiat-ish because you can still buy items from shopkeepers at semi-fixed prices, but most of the major trading goes on player-2-player. Other than the fact that it can be traded for goods to shop keepers (and other fixed expenses, like al-karid gate), noone has any use for gps.

 

 

 

This runs the risk of people "abandoning' gps as currency as they start to use other items as mediums of exchange, resulting in "hyper-inflation", as gps become less and less valued. Hyper-inflation could occur at any large shock to the economy, and would probably be followed by massive shifts in the relative costs of goods. Hyperinflation won't "ruin" the economy in the sence that everyone will stop buying and selling goods, but WILL ruin some characters economically at random, create a "panic" on all trading forums and people more into more stable goods, and will probably be followed by less trading (and some people quiting the game in annoyance.)

Link to comment
Share on other sites

Great Article. I was just mulling this same concept over in my head a few days ago, and I came to the same conclusion about the inflation in the economy: high alcing! There is only one thing I disagree with, and that is how discontinued items dissapear from the game. Some say from dieing in the wild, some say from getting banned, but I say that most Party Hats and other discontinued items leave the game becasue of people quitting. I just had a friend quit a while ago who had a full party hat set, and a mask. Now these rare items are out of circulation. Anyways, great article.

Spam DEF: Any post, paragraph, or sentence that does not add to the value of the thread.

 

Big_Stingman is the bomb!

Link to comment
Share on other sites

Blaek's idea is interesting about people abondoning gp and moving to other means of currency. Instead of selling yew logs to get the money for a set of zammy why not just trade the yews for the zammy? You need to get mith ore why not trade your freshly made daggers for the ore?

 

 

 

The only reason that will not work is because there is no item that would be comprable to the gp and newbies will not switch over to the player made currency due to the fact the Jagex hands them gp and tells them that this is our equivalent to money. But could you imagine? A world where full rune costs 250 mill feathers? :ohnoes:

Rs name: bionicl00 (00 is 2 zeros)

F2P forever! All my F2P stats are currently at or above 30.

 

Wow... I just scanned it with my new high tech program called "common sense" and it detected a scam.

87.964% of all statistics are made up.

Link to comment
Share on other sites

Blaek's idea is interesting about people abondoning gp and moving to other means of currency

 

 

 

The whole idea of people abandoning the game money because it has no real use is not as unreasonable as it may seem really. It actually happened in Diablo 2 for example...

 

 

 

I think it's unlikely that it'll ever happen for RuneScape though. Runes, arrows, several dragon items can be bought in shops for 'static' gp prices. Furthermore, the addition of construction greatly enhanced the usefulness of gp as well.

Link to comment
Share on other sites

Blaek's idea is interesting about people abondoning gp and moving to other means of currency

 

 

 

The whole idea of people abandoning the game money because it has no real use is not as unreasonable as it may seem really. It actually happened in Diablo 2 for example...

 

 

 

 

In Ultima Online to.

 

 

 

 

 

about the masses of products without demand, that are then high alched: That's a concept i really hate. It could be countered, by mor or more difficult to obtain ressource necessary to make an item. If for exaple slaying a dragon would be a herculesk task, so that obtaining a single dragonhide would take ten times as long, dragonhide armor, would be far to precious to be high alched. The xp gain could be ten times as high, to balance things out.

 

 

 

 

 

 

 

about the article.. enjoyed reading and learned a thing or two. just can't see what the point of The Editor was.

Link to comment
Share on other sites

Abandoning currencies actually happens in real-life situations; the main thing keeping fiat currency alive is the government "forcing" people to use it. (I.e. the goverment demands taxes in its own currency, et cetera.) Actual currency abandonment occurs when it becomes more effective (i.e. easier) for people to use foriegn currency (or gold/silver) than hyper-inflating currency. The more power the government has to force the usage of its own currency, the more inflation can happen before "hyper-inflation" sets in, and the hyper-inflation phase will also last longer and be more severe before the currency becomes worthless.

 

 

 

 

 

Currency abandonment in Runescape will start with people "storing wealth" in sources other than gps. Or in laymans terms, buying items to sell later (likes in weeks or months), instead of having gps in one's bank account. This is different from 'merchanting", which is buying from those selling cheaply and selling to those buying at higher costs.

 

 

 

The first stage of this would be long term low-risk (or even profitable storage); such as buying rares. Then it will evolve into shorter term storage of more liquidable assets (runes, ores ect), followed by trading in terms of ores/runes (or whatever). While all this is happening, the value of gps will continue to drop at an accellerating rate. Eventually, everyone will try to "dump" all there gps right away and there will be a run on all npc shops with people buying anything of value.

 

 

 

Hyper-inflation can also occur if Jagex made a major change in the economy, resulting in a "panic" (i.e. a bank run or stock market crash like event), massive changes in the relative value of prices, and a drop int the value of gps while some other items remain relatively stable. This is why Jagex "tweaks" the system instead of giving it a massive overhaul. Its better to deal with moderate (and expected) inflation risk economic chaos.

 

 

 

Basically, the economy of Runescape is "dependant" on certain "features" that; ideally shouldn't be in the game, but are necessary to maintain any sort of price stablity. Getting rid of any one of these would be far worse than the harm it does; getting rid of several and you would no longer have Runescape as it is. But even more importantly, characters will get richer as time passes (if not, then why play the game if your running arround to 'hold the line' on your characters attributes/wealth). The major ones are:

 

 

 

1) Rare items. These things will continue to increase in value until the popularity of runescape starts to fall off, and money starts to leave the economy. This allows rich players to grow richer just by sitting on investments. (Speculation is not an evil in itself, but the certainty and rate of price inceases in these items is probably higher than is desirable) However, removing these will anger the best players, probably resulting in them leaving. Also the "wearable" rares provide the important function of showing off vast amounts or wealth.

 

 

 

It is feasible (though probably not wise) that this problem could be fixed by either:

 

a) making these items buyable at their current market value (or slightly higher to keep their owners happy)

 

B) remove them, replacing them with more "realistic" items sold at a similar price; and compensating the owners at market values (or slightly more)

 

However, the cure may be worse than the disease on this issue. There are other items that have increased in value over time, and nothing is stopping anyone (except a lack of funds) from investing in these items.

 

 

 

 

 

2) Mass production of mid-level goods. There amount of non-consumed goods produced (swords, armour) is probably dozens or hundreds of times greater than the number of people in runescape. If these goods could not be alched or sold at npc shops, then there would be an absurd glut on the market. (It won't be so bad that full rune would be traded for a cabbage, because it would still need transportation to the buyer) The cost of ores (and other ingredients for nonconsumed goods) would likewise fall, while the cost of consumed goods would rise (runes, food). Also, you might see some sort of food replacing gold as currency (probably lobsters). People will still mine, craft and smith (for sake of upping these skills), you'd see a massive shift to food and rune production. Unfortunately, there is no way arround this problem without creating an entirely new game (in fact even if not in name).

 

 

 

3) Alching and npc buying of mass produced goods. This is the result of the previous problem and is covered there.

 

 

 

 

 

Finally, on currency replacement, I don't forsee it happening unless Jagex does something drastic to the runescape economy instead of tweaking it slowly. Most (if not all) players seem to be willing to live with the current levels of inflation and are not moving to more price stable goods (atleast that is what it appears to be, I don't know if anyone is stock-piling iron ore or santa hats) and definately aren't using other goods as currency. Even if it does happen, gps won't become worthless as long as npcs accept them; but another item might arrise as currency in player-2-players transactions.

 

 

 

If another currency does arise, it will probably be a good that is

 

 

 

1) in wide demand,

 

2) has a relatively low cost (like under 1k per unit),

 

3) has had a stable or increasing price

 

4) be one item specific type, or at most a couple

 

 

 

Barter really isn't another currency per say, "money" is stuff you trade goods you produce for in order to trade the "money" for goods you yourself want.

 

 

 

If I had to guess, I would assume iron ore, coal, or some type of rune would replace gps if the currency was ever abandoned.

Link to comment
Share on other sites

i currently have a whip and bought it at 4 mil now i could get one for the half that price. which is good for players who don't have one but not for players that already have one. if jagex were to raise the requirements on skills it would most likely get rid of some of these inflation/deflation issues. but thats just my opinion.

Link to comment
Share on other sites

Wow, i like this article (too much), its interresting as hell!!

 

 

 

 

 

but there is always a question stuck in my head:

 

 

 

Will JAgex will close the door to new player of rs2 one day.

 

And If yes, what the discontinued items prices will do?

 

rise or fall ?

 

 

 

Congratulation and ty for the article

Link to comment
Share on other sites

That is definately a great article. I give it a thumbs up and a high-five.

-Runescape Addict --- Seven-time Writer for the Tip.It Times-

"Yes I have tricks in my pocket, I have things up my sleeve. But I am the opposite of a stage magician. He gives you the illusion that has the appearance of truth. I give you truth in the pleasant disguise of illusion." - The Glass Menagerie

DragonkinFF13Sig2copy.jpg

"This game isn't about graphics, it's about fun." - The Great Ortiz 9471

<> Dragon drops: Plateskirt(1), Half Shield(1) <>

Link to comment
Share on other sites

There are other items that have increased in value over time, and nothing is stopping anyone (except a lack of funds) from investing in these items.

 

 

 

Like? All materials have had stable prices for over 3 years, unless there was some game update that influenced their prices. All pseudo-rare items like whips have only and will only go down.

 

 

 

Most (if not all) players seem to be willing to live with the current levels of inflation and are not moving to more price stable goods (atleast that is what it appears to be, I don't know if anyone is stock-piling iron ore or santa hats) and definately aren't using other goods as currency.

 

 

 

Don't really agree with this. Plenty of people have been putting their money in rares for years already, in order to fight the inflation and they continue to do so. Furthermore - ask any of the richer merchants and they'll tell you that they prefer to express their richness in 'rares' rather than in gp's. Ofcourse rares can't possibly be a replacement of the currency as it's not liquid at all and has a high cost though.

 

 

 

But still, people don't really have anything to do with the inflation as long as they don't want to participate in the rares market. As I said above, materials and pseudo-rares have been left untouched by inflation the past 3 years. However, the real question is whether this can go on forever though. If panic hits, materials really do have the potential to skyrocket at some point.

 

 

 

The most likely time that such a panic would hit (if it will ever hit at all) would be when RuneScape's player population doesn't grow as fast as it did the past 3 years anymore. This will be a large cut on the supply of materials, which will eventually lead to higher prices, which in turn might lead to hyperinflation.

 

 

 

If I had to guess, I would assume iron ore, coal, or some type of rune would replace gps if the currency was ever abandoned.

 

 

 

Yeah, personally always had my bets on coal. It just seems to be the most stable and widely accepted commodity around.

Link to comment
Share on other sites

 

1. There will always be more new players

 

2. There will always be the desire of players to obtain stuff

 

 

 

- Sligo

 

 

 

Correction. There will always be more new players. But I've noticed the popularity of Runescape has dropped severely. It used to be on every server, 1/3rd of the players would be scurrying around in lumbridge showing off their bronze chainmail. Nowadays it takes some searching to find anyone under level 6.

 

 

 

And "The desire to obtain stuff?". Thats like saying there will always be the need for food (in the real world). The desire to obtain things is changing. When Runescape 2 was in its early stages, Adamant was 'the thing to have'. Then came Dragonhide, Rune, and other items. It's not simple. But that's what makes Runescape a fun game to play.

Im a borderline alchoholic raised by my mother in an inn in Port Sarim. I quite frequently break out in dance. How are you today?

newbankofrsyq0.gif

rtsig.thumbnail.JPG

Link to comment
Share on other sites

Like? All materials have had stable prices for over 3 years, unless there was some game update that influenced their prices. All pseudo-rare items like whips have only and will only go down.

 

 

 

That is the definition of price stablitity, so by stating that you deny inflation :lol:

 

 

 

Anway, I played Runescape (before Runescape 2) for brief periods at earlier times, and I remeber prices being lower for alot of materials (I might be wrongh though). For example, getting 100 gp for coal ores was a good deal on a free world, and it sometimes sold as low as 50. Also, how long has have cow hides been at 100 gps each and copper/tin sometimes selling for 50 gp each in bulk?

 

 

 

 

 

But still, people don't really have anything to do with the inflation as long as they don't want to participate in the rares market. As I said above, materials and pseudo-rares have been left untouched by inflation the past 3 years.

 

 

 

This raises the question: IS THERE REALLY INFLATION IN RUNESCAPE? The price of rares WILL keep going up so long as the total wealth in Runescape increases (either players getting richer on average or more players coming into the game). This would happen even in times of rapid price deflation in all other goods.

 

 

 

For example, the 1804 silver dollar is listed as costing $800 in 1902; assuming a dollar is in 1902 is worth $20 in today currency, its inflation adjusted value is $16,000. In 2002, it cost $4,140,000 (in a 1999 trade). This means its 258.75 times as expensive in 1000 years, a price incease of 5.71% per year (which seems reasonable but adds up over time).

 

 

 

Trying to hold back the price of these items while they remain rare is like trying to hold back the tides. I don't even think these items should figure into cacluations of "inflation", as they are separate from goods that are "produced" in any sence of the word today.

 

 

 

Trying to stop rares from becoming more expensive might result in severe deflation, where everyone tries to sell there goods immediately, and there is a shift toward gp producing activies and away from sold goods. Basically, its (mild) hyper-inflation but in reverse; resulting in the cooks, fishermen, and runecrafters being hurt.

 

 

 

The most likely time that such a panic would hit (if it will ever hit at all) would be when RuneScape's player population doesn't grow as fast as it did the past 3 years anymore. This will be a large cut on the supply of materials, which will eventually lead to higher prices, which in turn might lead to hyperinflation.

 

 

 

 

What about this possible senerio for hyperinflation; A person can only hold 2.1 bil gps in his/her bank account (I've been told this on the forum, its because the number is held as 32-bit number). What if the prices of blue hats rises above 2.1 bil gps? Then something other than gps must be traded for the blue hats, resulting in another good being "money" for these transactions.

 

 

 

Yeah, personally always had my bets on coal. It just seems to be the most stable and widely accepted commodity around.

 

 

 

Thinking about it more, some sort of food (in addition to an ore or rune) might become the next currency. Mining, smithing, and crafting mostly (but not totally) end with massive high-alching INTO gps. Although; there is some selling of high end goods, and alot of iron is made into iron knives. But food is mostly produced to be sold player to player.

 

 

 

Side Note: I was forgetting about the disposable smithed goods in my previous post; that might save some (but not much) of the mining/smithing economy if alching was removed.

Link to comment
Share on other sites

That is the definition of price stablitity, so by stating that you deny inflation :lol:

 

 

 

Well it's just not that easy. That's why I said that I tend to refer to inflation as an increase in money supply in my previous post. *All items except for rares are (or perhaps it's better to say seems to be) unaffected by the inflation though.

 

 

 

*Actually this is not totally true either. Without the huge inflation in this game, pseudo-rare items would not enter the game with prices like 70mil, but much lower instead.

 

 

 

and I remeber prices being lower for alot of materials (I might be wrongh though)

 

 

 

Sorry, really nothing has changed in material prices for years.

 

 

 

This raises the question: IS THERE REALLY INFLATION IN RUNESCAPE? The price of rares WILL keep going up so long as the total wealth in Runescape increases (either players getting richer on average or more players coming into the game). This would happen even in times of rapid price deflation in all other goods.

 

 

 

Yes, rares are collector / limited edition items and thus would go up (on the long-term at least) in any economic situation. The rate at which they currently rise cannot be explained otherwise then as a result of inflation though. In fact, according to this article I wrote they seem to be following the (estimated) total gp ingame almost exactly, which sounds a lot like basic inflation correction.

 

 

 

This means its 258.75 times as expensive in 100 years, a price incease of 5.71% per year (which seems reasonable but adds up over time).

 

 

 

To put that a bit more in perspection, the Dow Jones stock market index has risen 5.3% per year the past 100 year as well...

 

 

 

Trying to hold back the price of these items while they remain rare is like trying to hold back the tides. I don't even think these items should figure into cacluations of "inflation", as they are separate from goods that are "produced" in any sence of the word today.

 

 

 

I've had this arguement before, but you just can't deny the importancy and size of the rares market in RuneScape. All rare-like items like famous art and old coins in real life have nowhere near such a large total value in the real economy as they do in RuneScape.

 

 

 

Trying to stop rares from becoming more expensive might result in severe deflation

 

 

 

Also, I'm not trying to stop them from becomming more expensive as that will eventually lead to deflation. However that doesn't mean that their typical 500% price increase per year the past 3 years is normal. Surely most of that is driven by the large inflation that goes on in RuneScape.

 

 

 

What about this possible senerio for hyperinflation; A person can only hold 2.1 bil gps in his/her bank account. What if the prices of blue hats rises above 2.1 bil gps? Then something other than gps must be traded for the blue hats, resulting in another good being "money" for these transactions.

 

 

 

Not likely - both merchants and normal players have always prefered gp offers above any item offers. If rares go above the 2.1bil gp limit people will probably start trading cheaper rares + gp for the more expensive rares, something that people are already doing a lot by the way.

 

 

 

Perhaps if they start reaching prices far above the 2.1bil limit that people start offering masses of materials for rares, as trading rares + gp for other rares is not even a feasible solution anymore. :?

 

 

 

Thinking about it more, some sort of food (in addition to an ore or rune) might become the next currency. Mining, smithing, and crafting mostly (but not totally) end with massive high-alching INTO gps. Although; there is some selling of high end goods, and alot of iron is made into iron knives. But food is mostly produced to be sold player to player.

 

 

 

People don't smith or craft for the gp they get from high-alching the finished products though. Smithing makes a loss with the current prices of ores already anyway. The same goes for food really, with the difference that there is a small demand for the finished product at a price higher then the high-alch value. But I suppose raw lobs are a possibility as well, just like law runes.

Link to comment
Share on other sites

Well it's just not that easy. That's why I said that I tend to refer to inflation as an increase in money supply in my previous post. *All items except for rares are (or perhaps it's better to say seems to be) unaffected by the inflation though.

 

 

 

 

On this point, I'd have to say your correct; inflation means an increase in the money supply. However, it is completely "reasonable" to assume the money supply SHOULD increase in Runescape. More items are being produced and more people are entering the game. I assume the goal is to maintain price stability; a fixed money supply would result in massive price decreases in everything. The rate of "economic growth" in Runescape is far faster than the the real world, and unlike the real-world, most the higest rates or growth occur early and slow with time.

 

 

 

I think a fixed money supply could work; but it switching over to such a system will create a "panic" and annoy alot of people. Other than proving an economics experiment, I don't really see the point. :D

 

 

 

Yes, rares are collector / limited edition items and thus would go up (on the long-term at least) in any economic situation. The rate at which they currently rise cannot be explained otherwise then as a result of inflation though. In fact, according to this article I wrote they seem to be following the (estimated) total gp ingame almost exactly, which sounds a lot like basic inflation correction.

 

 

 

The M0 of the USA in 1898 was $2.637 billon, in 2004, in was $688 billion. That works out to an increase factor of 260.9, or 5.50% per year. (Granted, this data should be taken with a truckload of salt). This is about the same rate of incease of the 1804 silver dollar, 258.57, or 5.71% per year. If anything, the "rare" is increasing slighty faster than the money supply; its basically within the margin of error.

 

 

 

I've had this arguement before, but you just can't deny the importancy and size of the rares market in RuneScape. All rare-like items like famous art and old coins in real life have nowhere near such a large total value in the real economy as they do in RuneScape.

 

 

 

 

 

(The follows data should be taken with truckloads of salt and is a first order estimation only).

 

 

 

In 1962, the Mona Lisa was valued at $100 million. M1 of the USA was $147.8 billion. In 2004 (the only year I have data, the M1/M0 ratio was 1.994. Therefore, the M0 of the USA was (ok, might have been) $74.12 billion. The World GDP/US GDP in 2005 was 3.559. Therefore, the world M0 was (might have been) $263.79 billion. The Mona Lisa was worth 379.1 ppm (parts per million) of the worlds currency supply.

 

 

 

Using your assumption of 1.78 trillion gp, an item "worth" the Mona Lisa should (ok maybe) cost 674.8 million in the Runescape economy. This is actually near the middle range of the most valuable rare in Runescape, the Christmas cracker. (Estimated at 500-800 mil gp, 650 gp is the middle of the range.)

 

 

 

Granted everything else is all out of proportion with the real world. For example, take tools, the equivlent of machinery. The only expensive items used to gather resources (excluding combat) are pickaxes. (Correct me if I'm wrong about that). Assuming 9 mil active players and all owned a rune pick axe (which they don't, I'm overestimating to prove a point), that is 288 bil gps in tools. That works out to a mere 16.18% of the Runecape M0 (i.e. currency). "Estimating" the world M0 at $2.449T, that would mean only $396.1 billion worth of machinery in the world., and remember, this based on an overestimation of probably a factor of 3 or 4.

 

 

 

As a side note, the M0 is the total supply of currency allone; the M2 or MZM is normally taken to be the total money supply. These numbers will be several times larger than the M0. I used the M0 to compare apples to apples; the Runescape economy does not have any equivalent to demand deposits, but the real world does not have an equivalent to noted coal or other such currency replacements. I think this is the best "apples to apples" comparison possible.

 

 

 

Also, one could object that the real world had 3 billion people as of 1962, while Runescape has only about 9 million active players. However, we both accept that rares tend to keep pace with money supply, regardless of population. This information doesn't "prove" anything, its just weird how it works out so closely.

 

 

 

People don't smith or craft for the gp they get from high-alching the finished products though. Smithing makes a loss with the current prices of ores already anyway. The same goes for food really, with the difference that there is a small demand for the finished product at a price higher then the high-alch value. But I suppose raw lobs are a possibility as well, just like law runes.

 

 

 

Yes, do players smith and craft at a loss, but they can only handle so much loss before they smith and craft less. (Basically, they can't sink infinite money into these skills). If the high-ach value dropped, there would be a drop in the price of ores and hides.

 

 

 

Finally, what is your suggestion about dealing with rares? You seem to have put a lot of work into this area, but I haven't seen your suggestion for dealing with it? Personally, I think rares should either become buyable at prices slighty higher than their current market value; or the current situation should be allowed to continue and Jagex should only focus on price stability of other items.

Link to comment
Share on other sites

However, it is completely "reasonable" to assume the money supply SHOULD increase in Runescape. More items are being produced and more people are entering the game.

 

 

 

Sure, the money supply should increase in RuneScape, but 500% per year seems a bit over the top? It's also far larger then the population growth of RuneScape.

 

 

 

In 1962, the Mona Lisa was valued at $100 million. M1 of the USA was $147.8 billion. In 2004 (the only year I have data, the M1/M0 ratio was 1.994. Therefore, the M0 of the USA was (ok, might have been) $74.12 billion. The World GDP/US GDP in 2005 was 3.559. Therefore, the world M0 was (might have been) $263.79 billion. The Mona Lisa was worth 379.1 ppm (parts per million) of the worlds currency supply.

 

 

 

I find it questionable if we should use M0 or M2 data. With M2 data it would roughly be 76 ppm and the comparable rs price 135mil.

 

 

 

Using your assumption of 1.78 trillion gp, an item "worth" the Mona Lisa should (ok maybe) cost 674.8 million in the Runescape economy.

 

 

 

But even 675mil, which is roughly the price of crackers currently, is too low. The cracker is not an unique item like the Mona Lisa is and an unique item would surely run into the billions in RuneScape.

 

 

 

Also, in RuneScape there is quite a lot trade in the rares, while rare-like items in real life are rarely (:P) traded as far as I know.

 

 

 

As a side note, the M0 is the total supply of currency allone; the M2 or MZM is normally taken to be the total money supply.

 

 

 

I really think M2 is a lot better for comparison though - all money in RuneScape is 'virtual' really, RuneScape's M0 is zero in my opinion.

 

 

 

Finally, what is your suggestion about dealing with rares? You seem to have put a lot of work into this area, but I haven't seen your suggestion for dealing with it? Personally, I think rares should either become buyable at prices slighty higher than their current market value; or the current situation should be allowed to continue and Jagex should only focus on price stability of other items.

 

 

 

If your goal is to stop rares from rising then making them buyable at prices slightly higher then the current market value is probably the best and most healthy solution. This will drain quite some money from the game as well.

 

 

 

I personally don't really see a problem with rares though - I see a problem with the inflation in this game and the possible risks for the rest of the game. That material prices haven't changed the past years does not necessarily mean the current money supply growth rate is healthy - hyperinflation can hit unexpected.

Link to comment
Share on other sites

personally don't really see a problem with rares though - I see a problem with the inflation in this game and the possible risks for the rest of the game. That material prices haven't changed the past years does not necessarily mean the current money supply growth rate is healthy - hyperinflation can hit unexpected.

 

 

 

 

As I understand it, it appears your concern is that the Runescape economy is dependant on new players selling goods in mass to hold the price materials down. Eventually, the rate of expansion has to stop sometime; not everyone in the world is going to play Runescape, it is up to 9 million active users already. After Runescape reaches its peak in popularity (or the rate of growth slows enough), the amout gps in circulation will continue to increase, while the amount of materials produced stays the same or falls, thus resulting in inflation.

 

 

 

However, is daily production keeping pace with the money supply now? (I have no idea on this one, I'd assume its not)

 

 

 

The solution to this problem in not holding the money supply, but creating ways for the money supply to adjust itself downward when needed. This sounds like the same thing, but there is a difference; don't focus so much about the total money supply, but make sure if a surplus of money does occur, it will leave the economy to npcs (i.e. construction, npc shops, et cetera) instead of chasing after materials.

 

 

 

Has Runescape classic experienced any inflation or signs of upcoming inflation yet? NO new players are entering into it, it has a slowly declining population of increasingly high level characters; and fewer sinkholes than Runescape(2) It is in a stage that Runscape2 (or its successor) probably will never enter. (I don't know the answer ot this, but since I haven't heard anything, I assume its going fine)

 

 

 

What I really think Jagex should do is create a few really expensive clothing items for the sake of proving that one can afford such a thing. These would be purchased at a store a fixed prices. However, for this to work, rares would also have to made buyable, for the simple reason that these items will have a constant cost while rares increase in cost forever (supposedly).

 

 

 

This idea just came to me recently, I thought of another senerio for "hyper-inflation", or more likely, severe price inceases in materials. Suppose the money supply in Runescape begins to decrease, the price of rares therefore will fall. Because alot of rares are owned mainly because they are an apprieciating asset, this may crash the rare market. Most likely, non-wearable rares will affected most severely; wearable rares preform the function of showing off your wealth, while non-wearable ones don't. This fall in prices will mean a shift toward the materials, as all the money being saved up for rares is shifted toward stat increasing. The effect will probably be most severe in the non-wearable rares area (I would not be suprised if they fell by a factor of hundreds or thousands).

 

 

 

As material prices increase, some people may start stockpling materials, assuming that material prices will continue to increase. If alot of people start doing this, it might (but probably won't) provoke "currency abandonment" described earlier. Basically, its a panic-induced hyper-inflation senerio. Or, more likely, order might be restored in the materials market after a "one-shot" across the board price increase. Still, a non-wearable rare market crash will harm several and nearly wipe out a few players.

 

 

 

Since there are gp sinkholes in Runescape(2), the money supply might start to decrease in the number of players fell in the game, OR if Jagex overreacted against inflation.

 

 

 

This raises the question, is a panic fore-ordained for Runescape? Either the money supply increases forever, and we have spiraling inflation entering the materials market, or the money supply levels out and falls, resulting in the crash of non-wearable rares market, and a run on the materials market. Both these senerios might occur as the rate of population growth slows (meaning at any time), and one or the other WILL occur once the population peaks.

 

 

 

One possible solution to this problem is for Jagex to close gp sinkholes or even add money into the Runcescape (preventing my doomsday senerio) AND "force" in materials to hold down costs (preventing your doomsday senerio). Forcing in materials would include better monster drops, increasing respawn rates, moving resources closer to banks, randomly spawning materials, et cetera. Unfotunately, this would make the players even richer, and therefore less likely to gather resources, requiring more 'forceful" entry of materials as time goes on. Basically, its the equivalent of keeping an economic bubble going on forever, or staying eternally drunk to prevent a hang-over.

 

 

 

Another possible (and the only feasible one I can come up with) solution is to hold the price of rares up by making them buyable (and sellable). This should be done before the panic hits for obvious reasons.

 

 

 

(Also, I'd like to say this entry was NOT to support the idea of buyable rares per say, but to address the more serious issue that the Day of Reckoning, as it were, might be at hand. It may be the non-wearable rares hold up fine with a decreasing money supply, or material prices stay down despite inflation. I myself have no problem with rares inceasing in price until the end of time, and the 2.1 bill cap on gp can be raised by Jagex (in theory) without any major problems.)

Link to comment
Share on other sites

As I understand it, it appears your concern is that the Runescape economy is dependant on new players selling goods in mass to hold the price materials down. Eventually, the rate of expansion has to stop sometime; not everyone in the world is going to play Runescape, it is up to 9 million active users already. After Runescape reaches its peak in popularity (or the rate of growth slows enough), the amout gps in circulation will continue to increase, while the amount of materials produced stays the same or falls, thus resulting in inflation.

 

 

 

Yes, that's a good way to put it. :) I believe it has actually happened to various mmorpg's that reached that state.

 

 

 

However, is daily production keeping pace with the money supply now? (I have no idea on this one, I'd assume its not)

 

 

 

I'd say no. If we assume that material supply is roughly proportional to the amount of new players entering the game, then we can easily see they are diverging. Looking at my own data and the P2P subscription numbers of RuneScape found on here then we can roughly say that the money supply has been increasing with 18% per month while the player population has only been growing with 6.5% per month over the past 15 months.

 

 

 

The solution to this problem in not holding the money supply, but creating ways for the money supply to adjust itself downward when needed.

 

 

 

O yes, that's the only real solution for RuneScape as we just can't go adjust high-alch values (as that would mean a total overhaul in the game). However, I do think new mmorpg's would be better off if they focussed more on having a healthy and controlled way in which money enters the economy rather then having to tweak it later with all kinds of money sinks.

 

 

 

Has Runescape classic experienced any inflation or signs of upcoming inflation yet?

 

 

 

Don't know it too well either. I did see a post on the offical forums saying a person was buying dragon bones 7K each, but it's hard to say how reliable it all is - 80% of the posts made on the rsc market forums is made by rs2 players who are in the wrong market forum anyway :lol:. Furthermore, rsc had massive autoing problems as well, I checked it once before the massive bans (of autoers) on there and lobsters were about 50gp each, so what exactly happens there probably does not give us a very clear view on what might happen to rs2. :?

 

 

 

Suppose the money supply in Runescape begins to decrease, the price of rares therefore will fall.

 

 

 

Money supply decrease can eventually lead to a run on the bank (note: the money supply decrease won't be noticed quickly), which in RuneScape means a massive sale of rares and fast dropping prices of them.

 

 

 

We have had that situation in RuneScape once before (edit: I mean long-term dropping rare prices, not money supply decrease). I'm still not totally convinced about the true reasons for it back then, but it was probably the result of a mixture of various factors, including the phat dupe that happened 4 months before this price drop started and the introduction of RS2. The prices of all phats and crackers halved in a downgoing market of 3 months back then though - no other rares were affected.

 

 

 

Most likely, non-wearable rares will affected most severely

 

 

 

Hm, I wouldn't be so sure about this. Non-wearable rares are based a lot more on their actual rarity then wearable rares. Also, non-wearable rares have been growing much slower then wearable rares, so it's not too unreasonable to expect that wearables would be dropping faster then non-wearable rares if we have a downgoing market instead.

 

 

 

This fall in prices will mean a shift toward the materials, as all the money being saved up for rares is shifted toward stat increasing.

 

 

 

In the past this would not have been true, as people would just stash their gp away. However with the 2.1bil gp limit, the people who have a networth of higher then that (which are quite a lot people these days) would have to choose for other options, possibly causing the hyper-inflation in material prices, which might cause even more people to buy materials - etc.

 

 

 

This raises the question, is a panic fore-ordained for Runescape?

 

 

 

Without careful interference from Jagex I suppose it would be fore-ordained.

 

 

 

One possible solution to this problem is for Jagex to close gp sinkholes or even add money into the Runcescape (preventing my doomsday senerio) AND "force" in materials to hold down costs (preventing your doomsday senerio).

 

 

 

It's funny when you think about it, as both of those actions work against each other as well. :P I suppose Jagex would be best off to await what happens and then act on that accordingly.

 

 

 

(I myself have no problem with rares inceasing in price until the end of time, and the 2.1 bill cap on gp can be raised by Jagex (in theory) without any major problems.)

 

 

 

Whatever your view is, I believe raising the 2.1bil cap is a lot smarter then leaving it the way it is now in any case. Aside from the fact that the cap won't stop the prices from going higher, it may even help them with going up or cause the hyper-inflation doom-scenario's we're talking about here. If I were still playing I'd have a bank value of above 25bil - that means I wouldn't even be able to sell 10% of my rares in cash. This means that I couldn't even sell my rares and thus my rares would basically be out of roulation, causing extra scarcity and thus driving up the prices of rares, or I would have had to use materials as currency instead.

Link to comment
Share on other sites

Hm, I wouldn't be so sure about this. Non-wearable rares are based a lot more on their actual rarity then wearable rares. Also, non-wearable rares have been growing much slower then wearable rares, so it's not too unreasonable to expect that wearables would be dropping faster then non-wearable rares if we have a downgoing market instead.

 

 

 

How many people are holding rares on the "greater-fool theory", if not on the assumption they they will raise in price forever and ever? Also, the half jug of wine is now up to 45-60 million (acording to the zybez price guide.) Also, rarity does not generate value in itself. It seems reasonable that players may pay alot for a "status symbol" if the price will decrease over time; for example, "pseudo-rares" generally sell for alot when first introduced then fall later. Basically, why own a half-jug of wine or a pumpkin?

 

 

 

Without careful interference from Jagex I suppose it would be fore-ordained.

 

 

 

Any ideas on how to stop it from happening? In my opinoin, the best course of action for players (both to help themselves and the Runescape economy in general) is to STOCKPILE MATERIALS.

 

 

 

Obviously, when the panic hits, those holding materials will be best position, and may even come out ahead when the dust settles. Also, by buying up materials now, the existant stockpiles will be larger when the panic hits; making the price increases less severe when the run on materials does occur.

 

 

 

Granted, if everyone attempts to buy materials at the same time, that might very well generate a panic in itself, or more properly, cause a fore-ordained panic to happen sooner. (Theoretically, merely by writting this entry, I (and Duke_Freedom) could burst the rare market bubble.) So its probably not a good idea to run arround Runescape saying "O.M.G!!!! THE ECONOMIC APOCALYPSE IS AT HAND!!!! GPS AND RARES WILL BE WORTHLESS!!!! BUY ALL THE MATERIALS YOU CAN NOW BEFORE ITS TOO LATE!!!!!!!"

 

 

 

Is is possible to to engineer a "soft-landing", either by player co-operation (which is really unlikely by its nature) or Jagex?

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.