Gaian Economics Essay

[bluecherry]

So somebody HAS written something on the Gaian economy? surprised That's excelent. 4laugh I started writing something up on it for myself a while back but the mail I had it saved in got too old and it got deleted automaticly from my in box. I'll read this soon and edit my post. 3nodding

EDIT: Got around to reading it all now. An interesting read and well thought out. Some other possible aspects to consider in the Gaian economy are the difference between pricing of the market place and the exchange. the market place tends to be more expensive and exchange cheaper. This is of course because the market place is easier to find things more quickly then the exchange. However, the exchange still survives on it's cheaper rates due to the ability to sell items in mass quantities all in one place, three letter items are not searchable in the market place, and exchanges involving goods and/or services can take place to pay for items in the exchange where as the market place only allows for gold to be used to pay for items. Not to mention some people may like the ability to "bump" their sales in the exchange to increase visability to potential buyers while they are present to negotiate, which can't be done in the market place as well unless you keep canceling your items and going through the longer process of putting them up for sale again, in which time somebody may have been about to buy your item. There's also considering the difference between the exchange and the market place the changes that came with market place introduction. When all there was was the exchange, an item's "going rate" was harder to gauage. People counted on price guides which may or may not be up to date. Now the latest pricing of an item can be looked up on market-place item sale recording programs to see if something you're looking at is a good buy or if you may be losing money. These programs also keep more visable records to track possible artificial inflation attempts or natural price trends to gauge what are good and bad potential investments. Another part about the real life economy influence on gaia is by looking at the costs of donation items in pure gold and considering that a sealed envelope will always cost $2.50 in real money, you can try to estimate how much that $2.50 is worth in real life compared to how much a sealed envelope will sell for in gold to see approximately how much gold things would cost in real life if gold could buy real things, you can judge the worth of a single gold in this way essentially. (example: a gallon of gas in some places could cost $2.50, a sealed letter costs $2.50 real money, a sealed envelope sells for roughly 15k, so in gold, a gallon of gas is worth 15k gold and a single 1g is equal to approximately 0.167 cents at the current value of our money if that gas price was stable and accurate. So yeah, gaia gold is more more inflated then real US currency for sure. 1g is not worth as much as 1 penny.) There is also one last interesting aspect of the Gaia economy which wasn't mentioned-- the minishops. That people can do other kinds of services or make other kinds of goods to be sold for gold. You may in this way through calculating how much gold is worth compared to real life money if you sell art on gaia but have never in real life be able to estimate how much your work is worth in real money. xp As the only constant prices though, store items get to cost less essentialy the more gold the average Gaian makes. Which is why I laughed when so many people complained when the announcement was made about gaians making more gold through a new gold system. So many people complained about inflation of item prices not considering the inflation rate would be proportionate to the increased incomes, so the items would be no harder to get, however since store item prices were NOT increasing cost proportinately, they became easier to obtain. also, that you need to buy trading and vending passes before you can buy items from other people puts an interesting limit. It's a funny choice when you're new that has to be made sometimes. You may have enough gold to buy the things you want to dress your avatar but to do so now would require spending some of that gold for a trading or even vending pass too so you then could not afford the things you want to buy. When the Daily Chance feature was added since this thread was originally created it at first had that rare fish glitch which played tremendous havoc with the economy, one of the few examples existing of how fragile the economy can be on Gaia. The feature once fixed has done very little for economy influence. The closing of the casino temporarily and roll backs were good examples of messing with the economy. There was one other really good thing I had to add I think, but I just forgot it when somebody started talking to me while I was typing. gonk I can't remember now. When/if I do remember I'll add it in.

 

[bluecherry]

Finally edited my post. ninja But I'm a bit frustrated I was typing and forgot something good I was going to say. emo

 

[Azraelalpha]

i find it rather interesting, although i have not been on Gaia for long, i can undertand how some unique items can get such high prices over time. And as for the resellers, well, i shamefully admit i use that to get some quick gold, but of course the items i sell are not too expensive either, and i always look for the lowest priced item, and sell it for just a a few gold coins higher, so i can make some profit, while avoiding any rise in the already messed up inflation.

An example of this would be one of my latest transactions: I was able to purchase a water meat for 1200 gold, quite a bargain, if you ask me. After a few minutes i was selling it for 1300 gold, and it got sold in less than 30 seconds! i got 100 gold just by placing the item again in the marketplace, and of course i was not trying to overprice it.

Then again, i'm relatively new to Gaia and i would love any feedback you guys may have regarding this practice, whether raising prices a little bit is good for the economy, whilve overpricing too much is actually the opposite...


Edit: just to let you guys know, i always look for the current pricing on tektek.org so i can know for how much i can sell an item, and when i can buy for a low price, without actually affecting the Gaia economy.  

[Amy Leigh Laverick]

Very interesting and informative essay. As quite a new person to gaia i got to grips with the marketplace with relative ease.. not ease enough to make a lot of money from shop items but there is a little to be made but also the selling of game items too.  

[Pirate_Pope]

This "inflation" is only a direct response to the lack of gold being earned now that double gold week is over. Then with the pming being strangled of its gold power. I think we are going to see some very strange behavior in the market place, the new donation items come out in what one more day.
those are going to flood the marketplace with there cost of 20,000g. I don't think that people are going to be able to keep demand up so we will have a surplus.  

[Oshousama_Raistlin]

ShyGuy2

Your essay seems right on. Personally, I think the marketplace is the best thing that happened to gaia (now, if they were to add Texas Hold'em to the casino games, then there might be a little competition XD). For those who are smart enough to see it, the marketplace is a way to make some quick and easy gold that doesn't involve the mindless clicking and typing of "bumps" in the forums. The game of buying and selling actually causes you to think, and it can be quite challenging at times (especially if your browser takes more than a second to load a page).

As for the inflation problem, I can see no discernable end to it outside of moderator intervention. As long as there are little to none of a certain item on the marketplace, people will charge whatever they want for it. Provded that it is not sold in stores, nobody offers it for a lower price, and there are at least a few people on gaia that will pay ANYTHING to get that item, you can set the price as outrageously high as you like. In all of my time spent on gaia, I have not once seen the prices on the "impossible" items like halos, angelic sashes, devil tails, minis, etc. ever go down. I've only seen it go up. Therefore, I can only assume that it will continue to do the same until some outside force causes a change.

A good example of what I mean by "moderator intervention" is the G-pin. When it first came out, it was part of an event, the first gaia anniversary ball. Everyone could get one just for posting in the ballroom a certain amount of times. Since then and shortly after they were essentially available to all, they went for reasonable prices. As time went on however, people were less and less willing to part with them, and as a result, the supply went down and demand went up, and thus the prices began to increase, and they kept increasing up until a certain point. That point was the second gaia anniversary ball, another event put on by the moderators. During this event, the G-pin was given out essentially for free once again, and when they were available to anyone, why would anyone want to pay high prices for them? The result was a sharp decline in the cost of G-pins, that brought them close to their original price. Since then however, the same trend started all over again. After the event, as more people with G-pins decided to keep them, their price started showing a steady increase, and that increase has continued to this day.

So, it is my theory that unless the moderators decide to start throwing out original halos for free, the prices on items such as these will never go down.

Very true, but I find this possibility unlikely since those who had the original items/those who had already paid the higher price may riot/protest very loudly.  

[Oshousama_Raistlin]

V. Wolfe

I've been holding onto some Elegant Veils recently, and I noticed they took a steep price dive (about 2-3K or about 15%) when the new donation items came out.

Coincidence? Or possibly due to people dumping older donation items in an effort to buy up the new ones.

I've also noticed that new donation items start around 12-13K (popularity having some effect on price, obviously), then dive a bit after a few days. Is suspect there is some prestige to being the "new kid on the block" with the donation toy. I noticed this most dramatically with the Gwees (personally, I love my Gwee as she's so cute, and don't care if she costs 1K or 100K. heart )

This is true of quite a few rare items on the marketplace when the new monthly items are first released.

Other items, on the other hand, seem to go up in price when the new monthly items are first released: My theory for this phenomenon is the Gaian Supporter effect. Basically, I think that actual supporters of gaia sell their items on the marketplace. This shifts the available gold that is trading in the marketplace into the inventories of a different person.

Since it is a different person who now has the purchasing power, whatever items they desire become more in demand. Whatever puchasing power the new-item buyer had possessed is lost, thus making the items these people had made in demand suddenly have an oversupply.

This, I think, explains the reason why some items in the marketplace go up in price when the new items are released, while others go down.  

[Oshousama_Raistlin]

mehket

rarity can also create a monopoly
well sort of if some one went and bought all of the gwee the dragons that person could sell them at what ever price he wanted the customers couldn't get it some where else

That does happen already, I find. Except instead of it being one seller, there are many working together to raise the minimum price to an agreed limit. If a new seller comes in with a lower price, one of the "union" buys it and sells it at the agreed price.  

[Oshousama_Raistlin]

Darth Plagueis

item sold at store and baught at store to much reduction in price.

Why can you only sell four items at a time. I would like to sell 20

Another reason is to keep some people from being over-represented in the marketplace. 3nodding  

[Oshousama_Raistlin]

[Rei_Inflationist_00]

MistyQue_harper

i do both, but i love adding new stuff to my avie lol whee

The down side of my policies of course is that if you want a donation item I'm working on Misty the price will probably double while you asre saving upfor it.

that's where individuals have stepped in, starting up informal loaning threads.

Basically, you have to have a good credit rating (they know you've been on gaia for a long time, and post regularly, so that you're unlikely to run off with their money)

Post regularly on their "charity" thread, helping them to advertise.

In return, they will purchase the item you are questing for and hold it for you at a fixed price while you earn the gold. There is, of course, a fee associated with this deal.

It's a good way to dodge the effects of inflation, while also giving one a taste of real-life borrowing.  

[Oshousama_Raistlin]

liontaur

Nice thoughts there. And yea, it will be interesting to see how things go.

My experience in the market place is limited to tokens/tickets and the occasional foray into donation items collectables. But yea, when the casino shop is closed, tokens get more pricy. Although if you are patient, and quick with the mouse, you can still get 1 token for 1 gold.

Recently the prize and joy store was down for an extended amount of time too, and tickets became more valuable. Course I only got in on the tail end of that craze unfortunately.

As for my "income" I usually bring in about 10K in gold per day i'm on Gaia, that's made by buying tokens in the market place, occasionally for less then a gold per token. Then playinig blackjack for tickets, and selling the tickets on the marketplace for about 2.2 gold per ticket. So in about 2-3 hours I can win around 4500 tickets and sell them for around 10K

Now where are we on the rather taboo subject of buying gold from places like ebay and the like? How does that fit into your economic theories?

I heard that this happens on other RPG online games, but it isn't recommended on Gaia since the moderators may interpret the "1000000 gold for nothing" trades as an indication of a hacker and ban one or both of the accounts.  

[celeste_gabriev]

wow..that was a awesome essay  

[Asuma-Kun]

Hmm.... Good read. 3nodding I think there is no point in selling over the original price. It's less likly to be bought I think. I've made plenty of gold seeling just below the original price. People see that and buy it.  

[prettyslavegirl]

an excellent essay thorughly thought out and exceptionally interesting to read as are most of the replies posted. each shows a true and interesting face of gaia. Also thak you for my invitation to join.

generall where i see the whole area of greatest money gain for me (as its the most viable) is to dominate the marketplace in buying game items.
the case example im going to use is Striper. when i started Gaia as a foolish ||008, all was fresh innocent and interesting. catching my first stripper and selling it for 26 was a good deal (damnable fool that i was. though it shifted in two minutes.....) after selling it i examined the marketplace the mainstay of prices were 180+ madness i thought, the fishing hole only buys them for 13 when this place will pay 180? wish i'd put it up to 100... to this current day my marketplace wealth surrounds interacting with striper. buying and reselling. if its below the price i set for one striper or a multipe of such i will buy it with the intent of resell. strangely enough the market does seem to have set on a price for striper.... also strange is its the one i use. this may be as Oshousama_Raistlin wrote mainly due to my one man union strategy, where i buy all the striper from which i can fesibly derive a profit and resell them at a set price, my behaviour effectivley (at least this is my thesis) knocks out the need for other sellers as the buyer if they are a sensible person will not wish to pay more than they have to and thus settle for the lowest price. Mine. this gives the other sellers an ultimatum. pray for idiots to arrive en mass and buy your stock; Or match/ best my price.
beating my price, means there are more striper available for me to buy, lowering there price to come closer to mine makes mine seem far more attractive as they seem reasonable. as striper are effectivley rare due to the need for good rods to get them in large amounts, there is no danger of marketplace flooding, so i am safe to monopolise the striper.  

[prettyslavegirl]

As to the conundrum of why ebay isnt being used to turn profit; i trully wouldnt be surprised if as, Oshousama_Raistlin says, they are banning people who make rediculous trades like that in an attempt to stop ebay pirates. as to have such sums of money they would deffinitley not be stupid people(unless they bought donation items and sold them for vast sums, but this too would require at least a certain degree of intelligence.) meaning the trade could not be by a folish mistake, there would have to be purpose behind it. as Gaia's actions in deleting the accounts can be justified.

Ebay is a large threat to Gaias Racket, currently due to the exceptionally high market prices for donation items, they are largely unnafordable. and thus to an extent semi-undesireable, because of the amount of effort taken to get one, going to your wallet and retrieving a credit card to get the next donation item seems a much better option doesnt it?
well currently the only people who are making a profit are gaia (unless you count happiness as profit in which case the trade is almost equitable). thus gaia has a cornered market and an indefinite source of income(providing intrest in there product holds, and expenses can be controlled(server costs, design electricity), which is rather likely to happen as Gaia is great, and has age-wide apeal.), which is boosted by advertising(which is a constant source of revenue) and also by the products it markets through the popularity of its online counterparts, the more you lust for something eg. a coco the more you will strive to get one (spending more time on gaia, thus earning them revenue), or attempt replacement therappy with a plush toy of one(this also earns them money).

If, for example, someone does set up an ebay account marketing bebo items for real money to make a quick buck the idea would probably spread quickly if steps werent taken to stop it.for the main reason that ebay would kill the fun. if you've worked towards an item for months and then some noob buys one on ebay, thats not the sort of thing that creates contentment, this behaviour in fact creates resentment and players would probably desert as all their hardwork would have been in vain(that is of course a worst case scenario for gaia, but most likely how it was pitched to management when someone mentioned the idea... its the same reason they have banned botting). The gaia economy then becomes worthless and intrest in gaia would die, as outside influences would drive up the prices of items in an attempt to afford the remaining few old items.
and gold would be practically meaningless.

Its for this reason i as a casual bebo player am very greatful for ebay use of gaia item selling not being easy or widespread.

These are of course just my opinions i appreciate any feedback you care to give on them possitive or negative