POLL: New Economy

[Indrae]

I think part of the problem with that is that you assume that gold will have a constant amount of value in dollars. Once the system starts, that won't be true.

[pigpenguin]

[Indrae]

You know, the more I think about it, the more a gold economy makes sense. The problem with using money ($) as a currency is that it has no worth. No work is really tied to gaining money. Gold, on the other hand, is something that has to be mined for. Work is put into obtaining it, so naturally there will be some value placed on it. I would not advocate giving people gold every certain number of minutes. That leads to inflation and diminished value.

Note: I'm not trying to make a comprehensive argument. Mostly just typing out ideas and points as they come to me.

[pigpenguin]

Haha, I know what that's like indrae.

Let's suppose for a minute that the current $4 per 10 minute income is abolished. Would you then choose money over gold?

[Indrae]

Well, no. The reason we have to give $4 every ten minutes is because it is something that doesn't exist in-game. Gold does exist and is attainable. Ideally, if we were starting completely fresh (which I am not advocating), the economy would be very slow under a gold system. Once people actually began to build up a supply of gold, there would be more options to attain it. The most straightforward route would be to simply mine for gold. Once enough gold was in the economy, people would begin to set up shops and sell products to obtain the gold. Additionally, a smart shop owner would probably want to buy supplies from miners to later resell for a profit (lets be realistic, not everyone is going to set up a shop and maintain it; this would allow non-shop owners to gain an income). The combination of miners selling to shop owners (along with shop owners gathering their own resources) would hopefully result in a more active economy, with the laws of supply and demand playing a bigger role.

Would this require builders putting more effort into being able to buy supplies? Maybe, in fact, likely. This isn't a bad thing though.

[shppthwhtfx]

I personally believe the economy is as good as it's going to get no matter what we try and do to it. Even if we reset it back to nothing, some people will grow wealthy while others maintain a small amount. Nothing we do will change how people play the economy unless we take absolute control over everything (total communism) which wouldn't be fun at all for anyone participating in the economy now.

What set this campaign to fix the economy off is probably the fact that we have several shops that are now inactive, which isn't the fault of the economy. People become interested and not interested in playing the economy or even minecraft. Let them do what they want. Changing the name behind the currency, changing the interest rate, changing the UI of the shops isn't going to make people keep up their shop when they become inactive.
Another thing that might have started it is the large difference between the most successful shop owners and miners who have done well playing the economy. Those changes won't change the fact that people will rise above others drastically if they put the effort into it. It's kind of insulting to them to take great efforts to reduce their achievements after all their hard work (or good fortune). The fact that there hasn't been that much inflation is a sign that these people aren't malicious to your precious economy... if they wanted they could buy out every shop for weeks until prices went so high no one could afford anything. What harm are they doing the economy? xD

[Indrae]

I'm not saying that people should be punished for becoming wealthy (that's just a fact of life), or that we have a responsibility to implement a command economy to try and make everything equal. We should have extremely successful shop keepers and failed shop keepers. Those who put in the effort here should reap the benefits of that effort. Those who fail should learn to adapt to the in-game economy.

The server economy is not that important to how I play, and it is not one of my top concerns. However, revamping it to at least try to make it a little bit more vibrant and engaging would be beneficial for the entire server community. We should be open to new ideas, rather than trying to cling to systems that don't work well.

[Aeonex]

ATTENTION: Due in part to the extreme controversy of this subject, and the impending server update. The current Economy will remain in effect (transferred) with capped interest rates. The interest rates are broken and don't reflect the original author's intent (clownfish).

ATTENTION: Our server will run test economies on the test server, starting first with "Reactive Supply and Demand" (Server Run Shop with Personally owned shops.)

Furthermore, I am going to elaborate what an economy is, its' functions and its' usages in a fluid, cash flow system. But before I do that, I feel it largely necessary to explain the fundamentals of an Economy. It seems a large majority of people here view Economy in a very simplistic sense (nothing wrong with that). But it is creating a lot of confusion with what others are saying to each other. And how each economy will actually influence the server.

DEFINITIONS:

Supply & Demand: In a competitive market, supply and demand determine the prices of items, which will vary until it settles at a point where the quantity demanded by consumers (at current price) will equal the quantity supplied by producers (at current price), resulting in an economic equilibrium of price and quantity.

Four laws of supply and demand:
1: If demand increases and supply remains unchanged, then it leads to higher equilibrium price and higher quantity
2: If demand decreases and supply remains unchanged, then it leads to lower equilibrium price and lower quantity.
3: If supply increases and demand remains unchanged, then it leads to lower equilibrium price and higher quantity.
4: If supply decreases and demand remains unchanged, then it leads to higher equilibrium price and lower quantity.

Graph to Clarify how supply and demand works:
http://upload.wikimedia.org/wikipedia/co...nd.svg.png

MARKET:Market is the structure of individual people or units which comprise the economy. The Market and Microeconomics deal with irreducible base unit, private, public and domestic players.

Monopoly:A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity

Monopsony: (opposite of monopoly) is a market form in which one buyer faces many sellers. It is an example of imperfect competition, similar to a monopoly, in which only one seller faces many buyers. As the only purchaser of a good or service, the monopsonist may dictate terms to its suppliers in the same manner that a monopolist controls the market for its buyers.

(SOURCE: WIKIPEDIA)

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ARGUMENT PART 1:

Theory: Our server is being run as a dual Monopsony (mostly) and partial Monopoly (certain items).

Here is a list of examples to support my theory:

-Diamond demand is high, supply is low. According to the laws, the equilibrium price should be high with the lower quantity. So Diamond prices should be HIGH, with the unchanging demand and lack of supply. It is VERY LOW.

-Gold demand is unchanged. (might have changed recently with economy talk) Supply is high. According to the laws, the price of gold should steadily decrease, because the demand is consistent (unchanged) but still desired. Yet, it remains at about $2-$3 per ingot. Gold is not lowering, but fluctuating wildly, in either direction.

-There is no seemingly irreducible value of any item on the market. Diamonds have gone as low as $10 per diamond, some even $8 (rare). Dirt is sold at $1 per stack, $0.5 per stack, and some as low as $0.2 per stack.

-Stone is at $3 universally, per stack. I have seen lower in some areas.

-Cobblestone is at $1 per stack, universally.

-There are countless other shops with absurdly low prices on dozens of goods.

-Wool prices in minemall are at an all time high, with no one but this shop owner being able to keep up with the supply, or willing to keep up.

P.S. I have NEVER seen an Economy that has an average $20 for the price of diamond. This price is absurdly low and unrealistic. I have also never seen the price of gold in any economy being so low. How low gold is, is absurdly unrealistic. This is partially because of the great golden planetoid mining expedition. But also due to other varying factors.


CONCLUSION: Our server is running on a Monopsony with most supplies, and a Monopoly on other supplies. Monopsony with every basic good, dirt, stone, glass. Monopoly with other supplies: Wool, Potions.

With Gold Standard run economy, the user base would have more money to spend, and the shop owners would not feel the need to cater to every buyer who comes to their store.

This means we have an IMPERFECT economy on both scales. Every shop owner is competing like Wal-Mart, trying to brand themselves as Wal-mart, or "complete" shops which sell everything. Because the buyers of the economy feel they can simply go to another shop to get what they want. I suggested the Gold Standard Economy because it would greatly influence people to specialise in certain products, rather than focus on everything. They would need to spend time and effort in obtaining goods, and could procure their own cash.

THIS IS WHY I DISAGREE WITH A SERVER RUN SHOP!


NOTES:

This post here is to address WHY we want to change the Economy, for those who think it shouldn't change. So as to keep my posts short and as simple as possible. I will be posting my second and third argument breakdowns for other parts of Economic function at a later time.

[shppthwhtfx]

Ok, I can understand all that =) btw I choose a simplistic view because our economy is more simplistic than real life. We have no quality for instance, only supply and consistency of that supply ...just as an example.

What I don't understand is how having more, easier accessible money will change the mindset that the shop owners have. We already have a ton of money, you argue that our interest rate is too high (meaning we're giving money away too quickly), yet you suggest having more money will fix the economy ...contradictory. Perhaps if they have to earn that money instead of sit around, they'll view the money as worth more, but I doubt it... we're not dealing with a pure adult populace. It's monopoly money =/ I agree making more money in the economy should promote inflation, but you're reducing it at the same time with the interest rate, confusing the monkeys out of me.

We need to change the mindset of the economy, not the currency. I continue to not see how gold being the currency fixes the mindset of diamond being worth $20.

I don't mind you trying to cause inflation, I just don't believe this option will work. How about you use your massive amounts of money you aren't using to set up a shop that buys these resources for the minimum amount you think diamonds are worth? I think that'd help xD We need someone to buy the things that are too inexpensive.
Can we get some mini games to give money? haha all in the name of inflation! Make that money worthless, woo! I think something's wrong with my plan xD

[pigpenguin]

Since it looks like we're keeping the $ system, I feel like I only need to say a couple general things.

I believe that prices are so low for a couple of reasons.

1) The starting balance and income are very low ($30, $4). Other servers I've visited start players out with $500-700. That being said, it's easy to see why a diamond doesn't cost $300.

2) Minecraft economies are unlike real world ones in the sense that all items can be gathered by users. What I mean is that if you need to go buy a TI-84, you either find a price that suits you, or not buy one at all. In minecraft, if you don't like the price of wooden planks, you go make some yourself. Imagine trying to make a graphing calculator by yourself =P
So if penguinmarket was the ONLY shop selling stone, I wouldn't be able to charge $20 a stack even though there's no competition. Minemall's wool, in my opinion, has almost reached this sort of threshold where people will rather make products themselves over buying them.


About the gold currency- "I continue to not see how gold being the currency fixes the mindset of diamond being worth $20."


And to again dig up my seldom addressed recommendation - I strongly believe that a /warp shoplist promotion via broadcast will benefit the server's economy.
It seems that very few people even know of the warp and those that do are familiar with most of the server's shops!

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Off topic:

Could somebody explain how the BOSEconomy works? I see all this stuff about brackets and banks.....