Welcome to Gaia! ::

Over the last few weeks, I've seen quite a few people complain - at length, and with much venom, at times - about the recent inflation. While I can't comment on things that happened between September '04 and early May '05 (as I wasn't around Gaia at all for that time period), I do feel somewhat qualified to draw conclusions from my observations since I started playing again.

The first thing that people need to understand is that when there's a fixed quantity of something on the market, the price for that item will gradually go up unless there are more of that item than there are people interested in owning it. Every collectible market demonstrates this amply. There are several reasons why this happens, all of which boil down to, "there aren't as many circulating as there were." In the real world, breakage/damage to the collectible item accounts for gradually-dwindling numbers. In Gaia, that's represented by people who stop playing Gaia while they own said item, and don't pass them to friends. In both places, there's also the people who buy them for personal use, and never resell them. Gaia has an additional factor working to drive inflation: Gradually-increasing user base. As more and more people start playing Gaia, the demand for popular items increases, thereby driving the price up.

The second major cause for inflation, after the "collectible" factor, is the Gaian economy. Every two clicks earns you 1 gold. Every poll you vote on earns you 10 gold. Every bucket of bait you use makes you a profit. And there are no money sinks. (Well, hair styling and leaving players can be considered minor money sinks, actually). This means that the total available gold in Gaia is constantly increasing. As the total gold goes up, the available cash that any given player will have to buy something is also going up, and people have more expendable cash to spend on trying to get whatever item has caught their fancy.

Many people point the finger at, "greedy sellers." Well, they're not to blame - at least, not entirely. Everyone who participates in the marketplace affects the price of items. Buyers who pay higher prices because they can afford to are also a factor.

At the bottom of it all, it comes down to simple supply and demand. The cash supply and demand for items are gradually growing, and the supply is dwindling on Donation and Event items. That causes secondary inflation effects in all other items, except those that have an artificial price cap (store-bought items, that is).

My observation on the past month or so is that from the time I first started playing, to not long before I came back, there wasn't a great deal of inflation... player perceptions of how much an item "should be" were holding item prices down. Then the exploit was discovered, and a massive influx of cash broke down that wall, resulting in a huge inflation spike - all of the inflation that would have otherwise been happening gradually. Now, several weeks after the rollback, item prices are dropping again - but not much, and not fast. Highly-popular items like Steel-Plated Ninja Headbands and Kiki Kitty Plushies are dropping much more slowly than less-popular items like Kitsune Masks and Roro Robo-Puppies.

Supply and demand... that's all it is. A true merchant will turn a profit at any level.

Nice article!! You have some great points.

Yea the donating level is insane...it's usually the people who buy like 40 to a hundred that reaaally drive up those numbers.

That's an interesting (and very valid) point that I hadn't considered. Where do you get those figures? I'd love to see a page with hard numbers to look at.

It sounds less technical and more comfortable to read :3

Thanks for the compliment. =^_^=



That's a comment that I've made several times in regards to sealed envelope inflation. It's better to be a donating newbie now than five months ago... a single donation letter wouldn't get you any other donation item at that point. Now, you can get a half-dozen different old donation items for the value of a single donation letter.

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Back to the question of mine: Can anyone point me to a link where they show the total number of each given donation/rare item in the market? How many were issued, how many are still owned by active accounts, whatever? =^_^=