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 Posted: Mon Jun 28, 2010 11:42 am
NOTE: All information in here was created by the user ROMVLVS who has given us explicit permission to post the guide in this Guild to benefit the users. Some of this is fact, some opinion, and some is speculation, but this is posted in the Investing Elite because the crew agrees with most of what is said in this guide. Part 1 There seems to me that there is a rather large trend on Gaia of saying every single price change is "inflation". This isn't true. This isn't even remotely true. Here is a handy guide to why you people are idiots. (This week, next week's topic on why you guys are idiots will be completely different from this one.) What Inflation IsInflation is the rise in cost of things over a period of time. In real life, standard inflation rate is around 3-5% (It's much higher right now I believe do to well, the recession). I have no idea what the inflation rate on Gaia is, but it's probably somewhere between a 5-10% raise a month. We could figure out the inflation rate of Gaia by taking every non-new item that can not in any way, shape, or form be created (IE: A set amount), the items must also be final in the case of EIs (Done evolving), and the items can't be 'crafted' or gained from some sort of quest like the Gambino pen. Items that inflate: Ancient Katana Gogh Reed RiGs after they've left the CS. Items that don't: This month's RiG This month's MC The items from this month's RiG Shop items Items from zOMG. Artificial Inflation is a MisnomerThere is no such thing as artificial inflation. There is a term that really really works with what this is, but I can't remember it off the top of my head. (D'oh.) Artificial Inflation exists in the real world, and it's not at all inflation. It's more like a monopoly mixed with price gouging. What an "AIer" attempts to do is to attempt to raise the average buy price of an item by buying all of the item that they can buy, and then setting the price. Basically, if one user owns all of the unwanted Red Rose Corsages, and someone who doesn't have one wants one, they're going to have to pay what ever the user who owns all of the corsages wants for it. If we're going to say that a RRC is a "good" then this user is setting up a "Barrier to entry" (Kind of) and is then taking the competition out of the market. Why do they always seem to fail?Well, we don't know if they actually do fail, honestly. It's quite possible that someone has successfully raise the price of an item by buying the excess stock, it's possible. But, more often than not the prices stabilize in less than an hour. Here's why: User X buys up all of Item Y under a certain price. User X then sells item Y for a certain price. Eventually, other users will see that Item Y has gone up in price and go, "Man, I hate item Y. I'm going to sell it." and the price under-cutting begins. Of course, they put their prices low so that other people will buy them. Eventually the price stabilizes. The reason why User X failed is because you have to have a monopoly on the item, you have to have almost all of the items that people don't want or cherish, or plan to sell at a certain price. In order to actually get a monopoly, a user would have to spend quite a lot of time buying that item, and making sure they purchase all of the items that are being put up under their price. It would take a lot of time, and a lot of price-watching. According to a particular user who claims to have successfully "AI'd" an item, it really helps if the item is popular. This makes sense, because if the item is popular, lots of other people will be helping you purchase the items, and will take to the higher price change quicker, given the volume of sales in a day of those items. Also, there are supposedly groups who engage in "AIing" which would make sense, there are groups who engage in insider trading, and the market is not unlike the stock market. What Inflation isn'tThe word inflation is literally used every time an item goes up in price. A certain user is questing a North Kitten Star. They supposedly almost had the money and lo and behold, the NKS rose up by a million over night. What ridiculous inflation! But wait, it wasn't inflation, it was supply and demand. What happened was that a freaking NKS pin came out, and that created a rise in demand for the item, and with the set supply, created a rise in prices. (If the NKS spawns from most rigs these days I don't know, all I know is that if it does, it's an extremely limited amount from each, and a very rare drop.) This is a supply and demand graph showing price stabilization:  The higher the price and the lower the quantity, the less demand for an item there is. Note: Demand doesn't mean "How many want it" it's more like, "Who is going to actually buy it" The lower the cost the less supply there is. Note: Supply doesn't mean the actual amount in existence, it means the amount that is willing to be sold. Supply and demand reach an equilibrium when the most people are willing to sell an item and buy an item at a particular particular price. Supply and demand generally will go up and down all the time, but will always fall back to some sort of equilibrium (With prices being adjusted for inflation.) This is a supply shift: A shift in supply on Gaia can occur only for a couple of reasons that I can think of. The supply can go up because Gaia re-releases an item. The demand for the item will remain the same, but the quantity will be more, causing the item to lose value. The Supply can really only go down for a couple of reasons that I can think of. 1. Someone is trying to gouge the prices of an item, and they are doing fairly well at purchasing all of the items on the market. Then they get banned. 2. Some huge max exodus. 3. Someone actually successfully "AIs" an item. Now, for point 2 I make it seem that there would have to be a large amount of people leaving at quick pace, but this isn't true. The majority of the people who own Golden Halos probably don't use Gaia any more, and those halos sit on their dead or banned accounts, never again to see the light of day, and will never grace the marketplace again. When the supply goes down, the demand for the item remains the same, which causes the price to rise due to the limited quantity. Demand.It's really the same thing as supply, honestly. A good reason why Demand can decrease is this: Look at my head. What do you see? No, not my hair. Thank you, it IS lovely, but no, the Wed to Darkness. Wed to Darkness caused a decrease in the demand for both Horns of the Demon and the Nitemare Tail. Why? Well, I don't want them, I've got a rip-off item of them. Actually, I've got a BETTER item than them, in my opinion. I never actually wanted HoD, but I love my rip-off horns. Something like 95% of Louis Vuitton hand-bags are fake. These fakes feel like the real thing, look like the real thing, and still cost an arm and a leg because they're still superior than a regular purse. A woman with a fake Louis Vuitton doesn't want a real Louis Vuitton, they already have one. A good reason why Demand can increase: Plot: Gambino got shot. Guess what went up in price? G Pins, those pens from him, and those belts. Anything Gambino related went through the roof. Everyone wanted some Gambino s**t. When the sparkle comic came out, Fallen Wish went up in price. It's still around 1.5 mil. It might not go back down, because it's a well-liked item already. The supply of those items remained the same, but the demand increased because of the plot. Complimentary items: The Kitten Star pin item just came out. The NKS just went up in price because the supply remained the same, and the demand for the NKS rose because it compliments the new pin. Events/Holidays: In the winter, Christmas items go up. In October Halloween/Nitemare items go up. If we have a towns centered summer event, the Water Festival shirts go up. NOTE ABOUT SHIFTS:Now, I didn't exactly cover whether or not these were shifts or moving along the curve, but it doesn't really matter for this basic list. If you're an economics major and are going to say, "Point 2 in Supply isn't a shift, it's moving along the curve because of blah blah blah." I'm going to tell you this: Every economics class I've ever taken I've gotten an A in. I also considered them to be the most boring classes I've ever had to take in my entire life. I'm not going to explain the difference between moving along the curve and shifting, because it doesn't really matter. Why do new items lose value quickly?When an item enters the CS, or the RiG is new, people want them NOW, and so they buy them. The large amount of people buying these items allows for people to sell them at really high prices. As the month goes on, less people buy them and the price begins to settle lower and lower, and at around the end of the month a RiG item reaches it's zenith, about a week after the RiG leaves the CS, it starts to rise and rise. This is true of CS items as well, though not so ridiculous. Stocks, Bonds, and Items.The Marketplace of Gaia is not unlike the stock market, there are people who buy items low to sell a little higher not five minutes later--the day traders of Gaia. There are people who buy things because they know they'll go up later. This is pretty much explaining what you want to do with certain items if you're investing. EIs are Stocks.People don't know what a stock is going to do, will it go up? Will it go down? There's a lot of speculation about them, which actually in turn effects prices directly (If you know how the price of gas works, you know what I'm talking about, if not, you'll be pissed when you do.) This is why certain EIs go up on Thursday, because TekTek says they're going to evolve, so people speculate in a price rise later, and buy them, IE the demand goes up for that short period of time. Of course, the evolution could suck, which will lower the price. Maybe the entire EI turns out to be crap, and you end up losing money (I'm looking at you, Catastrophe and Experiment). No one knows, and that's why EIs are like stocks, they're unpredictable. BondsBonds are guaranteed money, usually along the lines of inflation, that pay out at certain intervals and expire at a certain time. Items on Gaia obviously don't expire, but there are quite a few items that could be called 'Gaia Bonds'. Basically, popular MCs, older discontinued items, EIs that stopped evolving, (Don't get them when they JUST stopped evolving, because they're going to drop in price shortly), and many, many other items that are prone to inflation. Remember, the more popular an item, the higher it will go faster, because supply is set, and demand is always increasing due to Gaia's growing population. FAQ:Why do new RiGs/sealeds increase in price month after month?Inflation. Although, there was a boost that wasn't inflation when RiGs went from 99 GC to 149 GC, but the increased cost of a RiG/Sealed Envelope every month is directly because of inflation. The value of a RiG and a Sealed remains the same, but the amount of gold in the system is greater. Why do Casino Items remain around the same rough value?If anything, the Casino items should actually lower in value. You get tickets by wagering tokens, and the exchange seems to be roughly 3 tickets to a token. A token is worth 1 gold if you buy it. No one buys tokens, we get them for free from the DC. I have thousands in my inventory. Tokens are worthless, and tickets are worth three tokens. Three times nothing is still nothing. (Or infinity, depending on how you do your math.) Why do the prices stay the same? Because no one plays the casino games, and because the tokens are still considered as being worth 1 gold, it kind of gives them a set value, even though it's a stupid, baseless value.
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Posted: Mon Jun 28, 2010 11:43 am
Part 2 After I made the first thread, some questions that were asked; What IS inflation then? Does booty grab cause inflation? Why is there no more rum? A couple of threads in the GCD in the days that followed also talked about inflation, a lot of ideas about gold sinks came up, a lot of threads saying that we NEED gold sinks. Some of the ideas about gold sinks were a bit, ludicrous. Some weren't bad, but mostly they weren't very good, either. InflationRight, so the point of Gaia is basically to make gold, buy the items you want, and dress up your avatar. Also, make friends and talk about things you have an interest in. For many GCDers, their interest discussed happens to be Gaia itself, and the community. Given that pretty much everyone who reads this will be a GCDer, I don't really think I need to cater to a different audience. Inflation is the devaluation of currency caused by there being more created. Inflation in real life also comes about when minimum wage is increased, and a couple of other things that don't actually pertain to Gaia. So, what causes inflation? Everything. Every post you make, every poll you vote on, ever game you play, every time you click the daily chance, there is gold or items granted to you that were just added to the market. Booty Grab adds a whole hell of a lot of money to the system, and it's right to think that it helps cause inflation, and given that quite a number of people do play booty grab to make loads of money off of. But, everything you do on this site causes inflation. Every single thing. Inflation: The Bad ThingsHow often do you see posts by users saying, "I was question X item, and I got the gold, and I was going to buy it, and it went up in price! crying " Often. Very often. Inflation seems to be the spurn of people who are questing items, no doubt about it. Inflation also seems to help grow the gap between rich and poor. The rich get richer and the poor get a tuppence, but not a copper twopence because they can't afford it with this inflation. Especially not a first gen, which is at almost 500K now, up from two something. These users are always complaining that inflation is out of control, not realizing that they are contributing to it constantly. Stopping InflationNow, people want to stop inflation. So, here's a handy list of the things that YOU personally can do to help stop inflation. The power is yours. Stop: Posting Contributing to polls Clicking on pages Playing Games such as: Booty Grab, zOMG, Word Bump, Pinball, Jigsaw, Fishing, ETC. Hitting bushes in towns Commenting profiles Doing the Daily Chance Clicking on Jaws Selling back RiG fails Pretty much enjoying this site So, basically, inflation is (Queue unreal tournament voice smile Unstoppable. And now you know, and knowing is half the battle. Possible Gold SinksSo, some of the ideas that people had come up with to combat inflation are as such; Increase the price of Shop ItemsThis, I actually agree with. Shop items should have their prices increased, because the items are sooo cheap. How ever, for newbs, shop items are ALL that they can afford. We shouldn't take that away from them. They should have the chance to make decent avatars with cheap clothing. A Housing UpdateOther than the post Sabin made about this not being feasible, I would think that this is a great idea. New ShopsDernier*Cri didn't exactly help, did it? A Gold Only RiGLOL, yeah, That'll happen. Time is money, and it would cost Gaia too much. Log-in or Monthly FeeSomeone had the idea to set up a fee of 10K. Not everyone has 10K just sitting around, and for those that do, well, I don't want to spend 10K to log in. I probably won't even MAKE 10K while on here, and I'm going to have to TRY to make that 10K or else I'm going to run out of money eventually, and ******** that. Remember how I wrote something about the real world's inflation rising with the rise of minimum wage? Well, because you have to pay workers more, you've got to raise prices in order to keep the same profit margin. This effect trickles down throughout every market and economy until all of the prices have gone up, and you still can't live on minimum wage. Now, if there were a "cost of living" or in this case, "Cost of sign-in" on Gaia, it would actually cause inflation, because people need more money from the items that they're selling in order to pay for the expense of using the site. Gold Sinks Aren't Going to Help.The only Gold Sinks Gaia is going to implement are optional ones, like the Christmas event and the IRS event. Because they are optional, not everyone is going to do them. That IRS event? I only did the minimum and got what-ever it was you got. (I don't even remember anymore.) The Christmas one? I threw some crap in there, and then realized that it would probably be cheaper and less time consuming to buy the items on the MP. And so I did. Because Gaia won't make anything mandatory, Gold Sinks aren't going to work. Dernier*Cri actually makes people money, not lose it, due to the fact that the items leave the store. Sure, a couple mil goes out of the market, but 3 mil is 2,500 games of Booty Grab, which is probably played during a couple of hours, max. Those massive items aren't really so massive.So, let's look at the KiKi kitty. The LMP as of this posting is 1.9 mil. Damn, 1.9 mil for a KiKi kitty? That's ridiculous. But, that kiki kitty is actually easy as s**t to get. A post is about 35 gold-ish, more or less, depending on the number of posts you've made that day. Back when the KiKi Kitty came out, I'm pretty sure it was like 3. Maybe as high as 4 or 5, but I don't think so. The average Booty Grab, if you're not doing it wrong, is roughly 1200 gold. So, let's take 1200 gold and use it to divide the cost of the kiki kitty. About 1,584 games of Booty Grab, at about 60 seconds each. That's 1584 minutes of Booty Grab, or 26.4 hours. In 26.4 hours you can have enough pure to buy a kiki kitty. But by then, the price will have gone up. Sucks. Now, back in the day, a KiKi used to cost around, 70K. I think it actually started at less, but I don't know. You'd get about 3 gold per post, and could post twice a minute. (Maybe once a minute, but for this argument we'll say twice.) At 6 gold a minute it would take 11,667 minutes of posting to get a kiki kitty. Or eight days of posting. Eight straight days of posting. "But Romvlvs/Rom/Rommie(?), people used to Poll Whore. You could get 15 gold poll whoring!" which would still take 3 days of poll whoring straight. A single day versus eight.... In four days of Booty Grab I could get Golden Laurels, assuming in that time it takes me to do that they increase only to 7.5 mil. "But Romvlvs, not everyone can play Booty Grab!" Well, it takes a little longer, but there's a way. You can make money OFF of inflation itself! Inflation, it's good business.The Ancient Katana, one year ago, was worth about 500K. Now, there's some demand involved in that, because of a couple of EI releases that complimented the Katana well, as well as the widely held opinion that the Katana is THE best sword on Gaia. (It's definitely one of the best, by any means.) But the Katana right now is at about 1.5 mil. If you had bought 5 Katanas last year at 500K and sold them today you'd make 5 million galder. (Gold needs a slang term, like quid, sterling, buck, etc.) That's not a lot of gold, but it takes absolutely NO effort. Most items on Gaia are subject to inflation. Just buy items and sell them later. When you're questing, don't keep your gold as pure, buy items and sell them when you have enough. You should sell them when you have more than enough, because there's that 2% sales tax, and also because well, the item went up in price, too. You have to make your money work for you, because if it doesn't, you work for it.If you don't get it yet;Inflation IS NOT going away. There is no amount of 'gold sinks' or ways of removing currency that will stagnate the prices on items. In all honesty, stagnate prices is the death of an economy, not a balancing act. You have to live with inflation, but in all honesty, just stop bitching about it. Discuss; Am I wrong? Why? Other ideas for Gold Sinks. Is Inflation good, bad, or ugly?(EDIT: Removed mentions of PMs granting gold, added discussion points) (EDIT: Since when does it take a minute to play BG? Is the average grab more now?)
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Posted: Mon Jun 28, 2010 11:45 am
Part 3 Substitute Goods: Why Horns of the Demon PlummetedNow, I briefly covered Substitute goods in the first topic, but not to my liking, really. (I also called them Complementary Goods, which is similar, but entirely different. My bad, guys. redface I'm going to fix it in the other thread, also.) There were some questions about it, and I was asked to expand upon the idea. A Substitute good when it comes to Gaia is an item that is so much like another item, but newer/cheaper. More people will buy this item instead of the older, more expensive item, which basically translates into the demand of the original item to go down. A great example of this is Horns of the Demon.  Horns of the Demon's history according to Tektek.Do you see that spike in June of '08? See how it falls there? Well, something made it fall, and that something was this:  Faunzy's FluteRemember Faunzy's Flute? Remember what it was? Everyday you picked a choice, and every day you could possibly go higher through the ranks and get a better item. What were all of the items? Well, all of the items were HORNS. Those horns that entered the market from Faunzy's Flute made the price of Horns of the Demon go down, as people had a cheaper, substitute good. The price began to rise again not too long (after people realized that the horns sucked) due to inflation, mostly. And then, what's this? (Bulbasaur is evolving!) It drops again around May of '09. Why would it do that? Oh yeah, because of Wed to Darkness. Wed to Darkness came out of the cash shop in May, 2009. The pose in W2D was so comparable, and some argue better, than the original HotD that many people bought it. There's a similar dip with the Devil Tail at the same time, though there are also a number of dips in that item's graph. Substitute Goods on Gaia:Angelic Sash/Heavenly Drapes Horns of the Demon/Faunzy's Flute winnings Horns of the Demon/Wed to Darkness Devil Tail/Wed to Darkness Angelic Halo/Spectacular Golden Halo Chuchips Blessing/Compass of Seidh Lunar Scythe/Bone Scythe Golden Halo/Noel's Gift Winged Anklets/Compass of Seidh Demonic Anklets/Compass of Seidh Noble Plumage /Compass of Seidh Gaia-Tan/Diapered Egg Chyaku Norrisu Scarf/Shadowlegend Ninja Headband/Dragon and Kai in heaven Portable Stereo DJ Studio headphones/The other headphones Angelic Scarf/Classilk Nitemare Scarf/Gimpy (Thanks for your contributions!)Does Booty Grab Cause Inflation?Obviously this is a yes, Booty Grab causes massive amounts of inflation. Booty Grab came out, (According to Gaiapedia) on January 7th, 2009. Let's look back at that HotD graph, shall we? Notice how in January of 2009 it starts to go up like a mountain? (Of course, you have to take into account the drop from Wed to Darkness.) Just about every item starts to balloon in price starting January, 2009.That is the rate of inflation that Booty Grab has caused on the economy. Yeah. Several hundred percent. Can you really compare Gaian Economy to the Real World?I really think it can, and here's a couple of reasons why: 1. Real currency is only alloted the value that people put into it. It's not backed by anything other than your opinions of it. 2. Gaia actually employs an economist, or at least, did at one time. 3. There is an exchange rate of gold to real cash, because you can use real cash to buy Gaia Cash, which buys Gaia cash items, which sell on the marketplace for gold. 4. Economics is about money, and it's a study. There are economics to everything. Buying your lunch, selling drugs, stolen TVs, trading car parts, trading card games like Magic or Pokemon. RPGs like Warcraft have economies. Everything has economies. 5. Economics is kind of like a social science. It's like Sociology about money. The people are the driving force behind the money, so how the money fluctuates is really caused by a fluctuation of people and their opinions. ArtNow, I'm probably not the best person to ask about art, but in all honesty it really seems to me that the cost of art is mostly inflation. The prices have gone up, so the price of art has gone up. That's why you get the really good artists selling their art for millions of gold. You really can't get decent art done for less than 100K anymore. You also can't get a whole lot of good items for under 100K anymore, either. Speculation about MCs and EIsSince there are a lot of older users in the GCD, I'm sure a lot of you drive. That means you buy Gasoline/Petrol (If you're British). What are the prices of Gas based on? Ahh yes, Speculation. While demand has something to do with it (prices rise in the summer for a reason), there is ALWAYS a demand for gas. The demand for gas is always high, so what do they base the price of gas on? The future. They guess how much oil is going to be worth X number of years in the future (s**t tons), and then they sell barrels of it based on how long their supply is going to last. As of posting this, it's Friday night/Saturday morning. Yesterday was EI day. Tektek.org guesses based on the patterns that they usually go by when an EI is going to evolve. If you'll notice, on late Wednesday and Thursday the prices of the EIs that are supposed to evolve start to rise in the Marketplace. This is because people think they are going to evolve, and start to buy them early, to sell later at a higher price, assuming the price will go up when it finally evolves. Sometimes this pays off, sometimes it doesn't. If the evolution is a bust, they lost their money. If it was amazing, then they just made BANK. (Or at least 60-70K) Sealed Letters do this to, around the 13th the prices start to rise on sealeds because they're about to open up into MCs, and people assume that they'll rise in price. Why Giftbox Items are Worthless; Your rare event isn't so rare.Back in the day when there wasn't a cash shop, (It's true, there wasn't) some of the best and rarest items (IE: Most expensive) came from so called "Rare Events" which is basically a trunk or a giftbox floating on your screen like you're on acid. "Oh s**t!" you'd scream as you clicked it while it jumped around the page. Some of these items were worth more than the Golden Halo at one point in time. They were worth more than a lot of items on Gaia, and if you were anyone you had one. Items like Nightmare Headband, Angelic Camisole, and Fresh Grass Skirt were our Compass of Seidh and Gogh Reeds. They used to be really expensive, and like I said, they only came from rare events. More users joined, and the great boost of users meant that more and more people got rare events. Because we had new and better items, they didn't want them and sold them in the market for gold. What this basically meant was that at the same time as the demand decreased the supply increased drastically, which is what explains for the large drop in price for the giftbox items.Now;Is there something I'm missing? Do you think I'm wrong? More substitute goods I missed? Questions? Buehler? Buehler? EDITS: Added more substitute goods. Someone said something was wrong with the links. I have no idea? Clarified the aspect of art.
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Posted: Mon Jun 28, 2010 11:46 am
Part 4 100 Mil disappears a day.Now, I'd like to start out by addressing this graph: I took this today. It's the amount of gold spent on the market-place over the past year. Now, if you'll look at where I labeled " A" I have no idea what caused this. For all consents and purposes it's an anomaly. This drop happens sometime around the end of July or mid August. Due to overwhelming opinion 'A' must have been caused by the day without the market. That's what happens when they take away the market for a day. Or, less than a day, as it were. B is Christmas. Literally, that's the spending for Christmas, when people are buying knew outfits for the event and buying items for friends and to anonymously gift. C: The Giftocalypse? Maybe? Seems to be around the right time. But, those points weren't why I brought up this graph. If you look closely, this graph is showing how much gold is cycled through the market-place on a daily basis. Notice how it's gone from about 4 billion a day to about 6 billion a day? No, this isn't saying "OH my god INFLATION!" No, this is saying that on average over the past year, 5 billion gold is cycled through the marketplace daily. 5 billion gold with a 2% tax deduction. 100,000,000 gold is removed on average per day from the market. 100,000,000 gold, or 100 million gold. 100 thousand K has been removed daily from the market on average over the last year. Think about that. How few people can afford to shop at Dernier*Cri? Quite a few. How many people use the marketplace? Everyone, from newbs to exchangers, to Halo owners. I just thought that should be known. Right, so, to begin; Bundles: Creating the Unwanted ItemsSo, Princline is a nice item. It's got some quality work done to it, but HOLY s**t LOOK AT THE RURU KITTY! OMG, THE LIMIT BREAKER IS TO DIE FOR! What's the princeling again? Let's face it. The RuRu kitty is essentially an edit of the KiKi kitty. You know, the '05 MC that's become a freaking mascot? Yeah, and it's only accessible by buying the bundle. Not to mention that the Limit Breaker has become some people's favorite item in the less-than-a-week that it's been around. Then, you have the Princeling. And that other item. What's it called? Oh yeah, the gun-tar. So, people are buying these items to sell, and they sell them from the package. What happens is, because of the popularity of the two items in the bundle, people are more willing to sell the other items for cheaper because they've already made their money back. Don't believe me? Well, if you buy the cosplay bundle and sell only the Limit Breaker and RuRu Kitty Plushie, you'll have already made more money than you spent. Everything else, as is said, is just profit. This essentially happens with every bundle, there's at least one 'crap' item that's price plummets because of people having to get it with the RIG. This Shouldn't Need Explaining.The Cash Shop does NOT cause inflation. The Cash Shop doesn't cause inflation. Period. No Ifs, Ands, or Buts. Cash Shop items do not add gold to the market. The only thing that they do is redistribution of wealth, and that doesn't add gold to the market. A user buys a cash shop item, and puts it in the MP. A new RIG or something. That item is going to be sold to another user. That user will use their gold to purchase that item. The gold that is given to the seller upon the purchase of the item is then removed from the buyer's account. The gold that the seller gets is not magically created in their account. RIGs are the exception. When you fail at a RIG sometimes you get items that sell back for gold. They usually don't sell for much gold, but the fact is that the RIGs and the other items from the RIGs remove more gold from the marketplace than the fail items add because of the fact that they're traded constantly. Still, MCs, EIs, and cash shop items DO NOT ADD GOLD. Complimentary GoodsRight, so last time I talked about Substitute Goods and thought that I had faultily called them Complimentary Goods in a before topic. I was actually wrong about this. I had complimentary goods right in the before topic. I just didn't go very in depth with it. sweatdrop I feel like I erased an answer on a test that I had gotten right because I second guessed myself. (Happens a lot.) Right, so Complimentary Goods might be spelled wrong, but that's okay. I don't care. What a complimentary good is, is a good that is really nice and compliments other things. "Gee, I like your shoes!" it says to your avatar.There used to be, or quite possibly still is, a thread called "It's like they're made for each other" or something floating around in the GCD. Not everything posted in that thread was a good example of a complimentary good, but I'm certain there are quite a few items in there. Basically, IRL complimentary goods come in pairs like Hunters. When the price of one item goes up, then the price of the other does as well, not entirely unlike Hunter's shooting their Fuel Rod Cannons in tandem. Now, what does this mean for Gaia? Well, basically what happens is sometimes items are made that are like rip-offs of other items, or continuations of other items. The example I used in the first thread was the Kitten Star Pin and the NKS. The North Kitten Star went up when the Kitten Star Pin came out. If a Dark Kitten Star comes out, that same pin will probably rise. New Angelic items pretty much make old Angelic items rise. Or at least for a short period of time. I don't have any evidence to suggest that a rise in price will effect a rise in the price of similar items right now. I would think that a rise in the price of say, Fresh Grass Skirts would also probably mean a rise in Buck Teeth, but on Gaia the only thing that would really cause such a rise is one of three things: Price Gouging/ "AI"ing, Inflation, or an increase in demand, which would probably be caused by a new item (Which may or may not be a match for the complimentary item. It could be a replacement or it could also compliment the items in a sort of trifecta). Something you should already know about investments.So, lately I've seen people make mention that they've lost their money on RIG items, or that their MCs dropped on the 15th, and of course there is what happened to the Pendant. RIG items are always really expensive when they first come out. Then they drop not entirely unlike a body with weights falls into a river.. Then they slowly rise again after the RIG leaves shop. There is less than a week of balance in the marketplace where the RIG floats through the air in exactly the same way that a bowling ball doesn't. There are a couple of reasons why people buy things like EIs and MCs. Investment, and use. Users buy them because they want them. Investors buy them because they want money. Guess who buys more of them? Probably the investors. The reason why the MCs dropped miserably on the 15th was because they were disappointing. I'm not trying to argue whether or not they were good, but the majority of users it seemed did not want them. This caused some panic. People rushed out to sell them and get rid of them ASAP, lest they be stuck with them forever. This is kind of how stock markets crash. One bad thing happens, and people panic. They sell their shares, others see the price of the shares drop, and sell theirs, then the prices plummet. Most MCs don't meet with universal applause. Generally most MCs are accepted by users, but they're not universally appealing. We have very few months like August and December of '09, where almost everyone loves the collectibles and you see one thread going, "You guys really like them that much?" (Or me going, 'THAT'S NOT A TOGA!') Most MCs drop in price when we find out what they are. This isn't because they suck, this is because they aren't loved by everyone, and the investors who bought their letters on the second of the month want to sell them, and it's a rush to the MP. This is why MCs are a poor investment these days. The reason why Seracrillica and quite a number of other EIs dropped on their last evolution was because A) Not so spectacular finales B) People wanted to get rid of them The more people who want to get rid of an item, the more they're going to under-cut each other. If each person undercuts the last person by say, 1,000 gold, by the time 100 people have tried to sell the item it's dropped 100K. This is why prices plummet when some things finish/open.Not every item does this. Items that are really popular or have amazing evolutions for their finale don't do this. Phin Phang Sale and Inflation.Now, this graph up top doesn't really show you, but if you go ahead and pull up some random MCs on tektek (Ones that aren't static~IE; ones that people still use) then you're going to go ahead and notice that when there are sales at Phin Phang, the prices on most items go up. Such a sale occurred on February 24th, 2010. Another one occurred on November 17th, 2009. I don't know why this is, personally. Is it because more people have bought fish and the people who play booty grab now have more tanks to grab from? Does it make more people want to play Booty Grab? "Oh yeah, I forgot about that!" not unlike how the GCD had pool parties when the pools came out in towns? Probably both. I don't know what date DolphinMania came out, but I'm sure there's a good spike from that, too. The reason why the graph up top doesn't work is because it doesn't reflect the prices of items on Gaia, it reflects the amount bought per day on Gaia. This is not the same thing at all. My Opinion on Animated ItemsAnimated Items are going to drop like sand-bags on the 15th, and are going to remain in the general vicinity for a little while, when people start to buy the s**t out of them. (Hoarders) As the first Animated Items, surely of many, they will essentially be the Angelic Halo of Animated Items. Not to mention that they contain the angelic halo of animated items in their ranks. Blessed Stellarite will probably rise in price as people take advantage of the cheap prices of the animated items that used to be oh-so-hard to get. As it is now, the Animated Items are dropping. (You can get the Halo for under 500K) and the Stellarite is rising in ABP, but with so few listings on the market I have to wonder if this is an "AI"ing scheme. Thanks for reading!
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Posted: Mon Jun 28, 2010 12:03 pm
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Posted: Mon Jun 28, 2010 5:17 pm
ooooh. He'll like to see this here, I am sure.
it is very informative, so it does belong here with you in your super informative guild, EKOD.
-reads again-
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Posted: Tue Jun 29, 2010 6:24 am
 The closer you get to light...Haha I love this guide :3 ...The greater your shadow becomes. 
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Posted: Tue Jun 29, 2010 1:52 pm
Now that Blessed Stelarite has entered the cash shops at such a cheap price, I'm going to edit the part on animated items, and I'd like you to reflect that here.
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Posted: Wed Jun 30, 2010 1:11 pm
ROMVLVS Now that Blessed Stelarite has entered the cash shops at such a cheap price, I'm going to edit the part on animated items, and I'd like you to reflect that here. Sure, for now I'll just take out the part about blessed stellarite because that's the only obvious change that does not belong there anymore.
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Posted: Mon Aug 02, 2010 3:38 pm
Kudos to you, my friend.
This was pretty interesting to read.
I liked some of your theories and ideas.
Like you, I remember the days when random gift box events were incredible, holy experiences. Nowadays, I get 1/2 a week?
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Posted: Mon Aug 02, 2010 5:02 pm
Kudos on the guide too!
This explains a whole lot too..
Investing and watching a trend may seem like alot of work, but if you "know" exactly what to look for it's easy.
I love this!
Woo hoo!
  
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Posted: Tue Aug 03, 2010 9:22 am
well it is possible to artificially inflate successfully, its just difficult......my most successful inflation was shockingly starmony (people didnt realize it was a grant for quite a while, that helped) it started selling at 7k and i managed to raise it to 20k by the time i gave up, shortly after i gave up the artificial inflation died and it kept dropping but that lasted about 4 hours and earned me about 210k.
despite that success i do have to mention the fact that more often than not when i have tried to artificially inflate it doesnt work...sometimes it even backfires (noobs see high listed price but low average price so they get confused and lower the price even more >.< ) and the fact that i managed to successfully inflate a grant item is more lucky timing than actual skill, i started inflating it right after it got popular but before people realized they could get it for free
sorry i saw the announcement and followed the link, when they said they didnt know if it worked i thought i would contribute saying it is possible to make it work just highly unlikely
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Posted: Tue Aug 03, 2010 1:44 pm
Unless it's on my computer, Idk.... but I did not see any graphs displayed. I was looking for them, but they never showed up. Did you forget to add the graphs?
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Posted: Thu Dec 16, 2010 9:25 pm
This is a very knowledgeable guide, I'll be sure to read it entirely later after dinner. mrgreen
One thing that I had in mind was the use of technical analysis on MC's and EI's.
I'm not sure if it would work..but so far looking at the charts it could have merit...
ninja
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Posted: Thu Dec 30, 2010 7:15 am
I am really enjoying reading through your posts and all these guides, so thank you. Couldn't resist just one fyi. The recession has actually caused slight deflation in the real world. The Fed is printing a lot of money in an attempt to stimulate spending, so the supply of dollars has actually gone up while interest rates continue to be at historic lows. It is an excellent time to borrow and invest IRL if you have the capital. Unfortunately, most people don't have the resources to be able to do this as many need to pad emergency funds due to the volatile job market and increasing layoffs. There are a lot more variables IRL than in Gaia.
But hey, if you're going to go through all this effort to understand the economics of an MMO, you might as well use it in the real world to your advantage.
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