|
Baby- Sitting Gaia's Economy |
|
|
|
|
|
|
Prices in Gaia's marketplace are going down, and have been doing so since June.
It started with us putting CAPTCHA in fishing, and continued over time with escalating and gradually more sophisticated behind- the scenes anti- botting measures.
At some point the nasty minds that brought upon mass botting came up with a new tool: paypal fraud. They used to do two things: use paypal to buy a lot of store items, sell them back to the store, then sell the gold. Some other nefarious minds decided that payoffs were better doing it through the marketplace - whenever a new cash item would come out, they would sell dozens of it in the marketplace for attractively low prices*. They were fast, they worked 24-7, but finally a couple of weeks ago, we implemented a solution to the problem - frozen cash.
If you look at marketplace prices, you'd see that price decreases have almost reached a plateau about a month and a half ago, but some additional anti- botting measures implemented and we're back on track - draining away the gold generated over a long period of time, in fishing but in other places as well**.
The bottom line is that slowly, we're draining excess gold from the economy, and prices react accordingly - they go down. It means that as an ordinary Gaian, earning your gold the old fashioned way - posting, voting, commenting, playing the games and shaking trees, getting daily chance etc. - old collectibles are becoming more accessible. If you're one of the few who are willing to spend some of your hard earned cash on Gaia - the old collectibles are becoming a reality, instead of a far dream.
Will this go on?
Depends what you mean by "this". We plan on keeping up the efforts to eliminate botting, but we are also constantly releasing new features that grant gold (electric love factory coming soon to a screen near you, for example), and we're working on tweaking gold granting on existing features. We want real people to be able to realistically quest for coveted items. We want dream avatars to be affordable. We want Gaians to be rich.
After we tweak the gold granting, and as we add more features, we'll start seeing differences not only in the total amount of gold in Gaia's economy, but also in the distribution of it. The "middle class" of Gaians will become richer. New Gaians won't be affected as much - I believe they complain about not being able to earn enough gold not because it is hard, but because we are doing a poor job in explaining how it's done, and it takes time for someone to find the right way to make gold - and that will not change because we change the amounts of gold granted for different activities. The richer Gaians will be affected indirectly - gold will trickle upwards, it always does.
Supplament / Clarification
Apparently, the previous two paragraph were not clear enough. So here is a clarification:
We are now draining a lot of botted gold out of the economy. The economy was filled with gold that came from botting, causing prices of certain items to go up beyond the normal course. We're now draining this gold out, and prices are and will be dropping back to their normal level. Prices will not be dropping indefinitely - the economy will stabilize once again, and prices of collectibles will go back to rising. This time, collectible (and other limited items) prices will rise due to their value rising, not because gold will be losing value.
There is no such thing as a Gaian Recession
Warning - very technical
Some people started talking about a shortage in "pure" on Gaia, and that it is triggering a "Gaia Recession". If we borrow real world economics and try to implement it to Gaia (which is the wrong thing to do, but I'll entertain the idea just to show that even when you do that it still fails) - we would be talking about a Keynesian recession. The way Keynesian recessions start in the real world, is that due to some unknown reason, the amount of money in an economy goes down. Since nominal prices and/or wages are sticky (they change too slowly, or can't change enough due to structural problems and long- term contracts, and a multitude of reasons) - people are just not willing to pay high prices anymore, and economic activity stops. Paul Krugman has a wonderful example for it - Baby-sitting the economy , which is, by the way, one of the few (if not the only) undisputed example for a Kaynesian recession in the history of the modern world.
So why can't it happen on Gaia? because prices on Gaia aren't sticky. They are incredibly dynamic. From a theoretical point of view, many of the reasons usually given for price stickiness are just irrelevant for Gaia; there are no long term contracts, all trade is done in spot markets, there are no commitments, etc. From an empricial point of view, prices of Gaia have always been extremely fast to adjust - and examples for this include both upwards adjustments (during the release of Bag of Win) and downwards (the latest item release a couple of days ago, for example). With no price stickiness, there can be no Keynesian recession.
The previous two paragraphs were written just as an example why even if we were to apply Keynesian economics to Gaia we would still not be able to produce a Keynesian recession. But as I wrote a couple of times in this journal in the past - applying real world economics to Gaia is not always appropriate; micro-economic theory is applicable, since it deals with people making decision, but conventional macroeconomic theories don't apply, because the sets of constraints are very different. Gaia's currency, for example, is not Fiat money, it is a commodity currency, making the distinction between monetary theory and fiscal theory mute.
End of Technical Part
TL;DR: there is no, and can't be, a recession on Gaia.
Concluding Remarks
I'd be really happy if an educated discussion about what I just wrote developed in my journal comments. I'm extremely busy these days, and can't promise to participate. If what I said is a bit too technical - just ignore it. I'm in an academic writing mood these days smile
* So yes, SOME (definitely not all, and quantitatively - a small fraction) of paypal fraud was lowering prices of new cash items. Still, most of it was gold store activity, which was inflationary.
** Botting is still a problem - we're constantly working on it. We're not anywhere done yet...
 Sagger-AT3 · Fri Oct 10, 2008 @ 06:20am · 46 Comments |
|
|
|
|
|
