Friday, August 25, 2006

Goin' Away

Originally, I was going to reply to Tide's comment on the last post with a comment. However, something seems to be wrong with the comment system at the moment, so I'll reply with a post.

First, though: I'm gonna be gone for three weeks. Expect few to no updates in that time.

Okay, now the comment:

Tide says that the dude who scammed 700 billion ISK could sell it using lots of alts to get the "full value" of the money - something like $116,000 if you simply multiply current price by the amount sold.

Unfortunately, that's simply not true. No matter how many alts you use, no matter what the size of the chunks you sell, you simply cannot put that much on the market without crashing it. It's like saying, "new homes sell for $400,000. If we sell a billion new homes, we can make four hundred trillion dollars!!!!!!"

No, you'll crash the new-house market. No matter how many different salespeople you use. The same will happen with that much ISK.

Because you have a near-monopoly, you could restrict yourself to selling at just a bit below market prices, but then you'll only sell, say, a few million ISK per week. And you'll still be hurting the market: you just won't be crashing it. Every week, your competitors would lower their prices to match yours, and you continue to lower your prices to stay ahead... and in the end, the market still crashes.


Tide (Adam MacDonald) said...

yeah Blogger is really acting up today. It spammed a new post I had three times.

Anyways. Yes, you are right. Anyone flooding the market is not going to profit. And they have a more likely chance of getting spotted by CCP. And you may also be right in that lowering your volume and selling discretely gives your competition to underbid you. But you can also use classic hedging techniques and underbid on your own products to raise them over competitors over the long term who can't compete with your volume. You can also calculate the future-value of your ISK into $ against the likelihood of ISK being RMT'd not devaluing from increasing demand from new players starting or existing players advancing faster and wanting bigger ships etc.

I don't disagree that a straight liquidation is impossible, but we can still use the current value of ISK RMT'd as a mean to figure out the probable future-value the guy will collect. I think you're trying to say this may be pragmatically impossible to achieve, and for that you may be right (i.e. he won't get exactly or near $160k). But I think the point is that he will get close being canny, which he obviously is, and that's the real issue. Thanks, and have good break.

Craig Perko said...

Oh, he can certainly profit, but in the process he'll either give himself away or severely damage the game's economy.

I just wish people wouldn't say "scammed $116,000 worth of ISK", because he didn't. The market isn't that big.