Economic Principles in the Context of “Path of Exile”

Bumping...

This thread is too fancifully spoken for my feeble mind :P. I'll let you economics people discuss this through, and when you all come to a general consensus, I would be happy to read a dumbed-down version of it.

extremely fabulous read

I think both guys have left out bits :)

First, an economy is about production (which was mentioned, btw, but not by the OP) and "wealth" is derived by improving the efficiency of production beyond the subsistence level.

In PoE (in particular, and any online economy in general) what is being produced is high end items. Lower level items are not the goal of production: a L36 perfect rare is still shit, it may be nice for levelling but has little value later. Its like a cheap car owned by a student: its noce for now, but is going to be dumped later no matter how much the student enjoyed it while still a student.

Those high end items are produced by either farming or crafting them.

As the responedent noted the efficiency of production increases with the level of production itself. Now note that the two guys are arguing over different things and dont realise it.

Low end gear is a Consumer Good: it is designed to be used up.
High end gear is a Kapital Good: it is used to make production more efficient.

Do you now see that eternal orbs are Kapital goods? Just like a high dps weapon is a kapital good? Eternals make the crafting part of the production more efficient, and are just another cost in the production process.

Interestingly, mechanically an exalt roll costs about 4ex when you use eternals (or did last time I priced an eternal). The real advantage is in time. This time advantage is lost if eternals cannot be sourced to continue production and actually becomes a liability in such a case.
The OP mentions that with infinite currency a perfect rare is only a matter of time, eternals just shorten the timeframe even if its arguable that in an unlimited currency situation eternals are unnecessary.


Second: en economy is what it is, and left to its own devices the true (ie market) value of all items will be discovered eventually. Most of the bitching i see is just that the mechanism of price discovery in the PoE markets is very inefficient.

The biggest folly of recent times is the insistence that fucking with an economy from a central planning agency (either directly as in communist systems, or indirectly as with central banks) makes things better. (I place the 20th century as my evidence for this).

The PoE economy is perfectly fair: no participant ultimately has access to any good or method that is not available to any other participant.


The OP claims that mirrors are like factories that make the rich richer.
So what?
Have the 'rich' not put in a lot of time and kapital to develop their business?
Why would you want to take this away from them?
Why would you want to punish them for making that investment?
Why do you think that 'Robin Hood' economics is the right course of action?
Why would you want to discourage long term goals for power players?
Why do you think you have the ability to make the market 'more fair' than it already is?

Do you realize that in CB we crafted without eternals? and you know what? people still did it. there was some real nice 'mirror worthy' stuff floating around. Prices were lower, too, which should have discourages crafting GG items, but didnt.

B.

ref
Schiff, P (2010), How an economy grows and why it crashes.
von Mises, L (??), Money, Method, and the market process.

The reasons of the OP are not what i would call correct.

All what you see in the game has been design through a complex process of development. And the result of what you see is what GGG has decided to offer you, until now.

What you are experiencing is the inflation of a league so old, that it has an incredibly big amount of currency in it; there's nothing bad about it.
GGG invite new players to enjoy the new leagues, where the economy is fresh.
Those older players who have lot of gear and exiles merged in the endless league have obviously an advantage proportional by the time spent inside such league; some of them are so far far away into the galaxy of richness that not even changing the drop system to 1 exalt/h we could be able to reach their actual level.
Since the discussion is about the economy of an endless, non-competitive, pair of leagues, it won't be considered; to them, in my opinion, this, as other post like this, is just the complaint of some players who want the same gear as other players; a silly matter of greedyness.

With the expansion, the joy of getting imperfect items will return. I guess that wealthy people will have less control in the market from now on.

What makes a healthy economy:

Trading. So long as people are trading the economy is fine.

If people have problems with other people, that is their problem. Let the individuals solve their own problems. If one person demands 30:1 chaos:exalts while another is 32:1, then they can haggle or barter. If they can't or don't want to, it's their problem.

Eternals and Mirrors:

These are the only items that allow actual "crafting", and you seem to be one of the people that want better crafting but attack the most important part of it.

Eternals allow a good item to be made better. This saves untold amounts of currency and time.

Eternals save nothing compared to mirrors, since mirrors allow the exact same item to be replicated and shared with another person and traded in the economy as players are willing to trade it. No, this isn't often and most of the time that item will only be traded to the player that wants the mirrored version.

Eternals and mirrors are fine.

"

It’s now important to recognize who the players (no pun intended) in this whole act are. The first and most important player is GGG. The people at GGG, fundamentally, want people to play their game. In general, they want the game to be fun, because why would anyone play or appreciate a game if it wasn’t fun?

This goal for funness is where it becomes complicated. Having fun is inherently subjective, after all! This difference in what is fun and what is not is the primary way in which the player base is divided. For some brevity, I will briefly describe the niches in the context of PoE using old Magic the Gathering lingo, and add some of my own distinctions/groups.

This is where I'll bring up an important point.

When a new player installs and plays Path of Exile, they realize it's a complicated game that requires thought and investment. They learn they must plan a build.

When that player plans their first build, they usually post about it on the forums and get a bunch of people telling them things. In this instance, I found out about Cybil's Paw on my own. Turn your defense into offense as well? That's pretty damn cool and powerful.

As I'm clearing things with about 9k DPS, I learn of Mjolnir. Cybil's Paw is now bland and useless, because I've seen videos of how powerful Mjolnir is and it completely stomps out Cybil's Paw. I then make an effort to obtain the new desired item.

Here's where it branches into two parts: Standard and league prices.

In the Standard League, a Mjolnir requires at least 100 exalted orbs to obtain via trade, and that's a starting minimum. That's about 3,000 chaos or 24,000 alterations. Not an option. So using chances and scourings are the only real chance, as some people have posted that the chances of getting a unique is anywhere from 2k-10k or even higher. This seems just as impossible, but it's easier since you can constantly trade and vendor for these orbs.

In the leagues, Hardcore and the two temporary leagues, it's harder to obtain the item because the item isn't as common. Standard can only lose an item when being modified, like by a Vaal Orb. But in the other leagues, death and modification can alter the item. So obtaining a Mjolnir in Hardcore or the hardcore temporary league is much harder since the item is more likely to be lost. The temporary leagues are also much, much harder to obtain the item because there is a limited time to obtain the item.

Now take into consideration that the item is extremely valuable, and is probably a "no-trade" item in the temporary leagues. I know I'd never give up a Mjolnir under any circumstances because it gives you a very strong build that can farm very easily with no investment. So getting someone in the temporary leagues to be willing to trade the item is extremely hard. You'd basically have to be giving them double what it is worth to them in general, as a start.

This kind of rarity kills the game, regardless of what your preference is. Because the drops in this game are terrible, unless you get a ridiculously valuable drop, you're going to be poor.

Being poor and seeing what you could have, and then finding out how much time investment is required to "mathematically" get it...you just give up. In my case, it would take me about five years of spending all of my normal time on this game farming Merveil for alterations to get a Mjolnir. I'd rather be playing APB where I can have some fun.

The problem is drop rate and the value of the drops. Not eternals. Not mirrors. Not trading.

"

Natharias wrote:

What makes a healthy economy:

This kind of rarity kills the game, regardless of what your preference is. Because the drops in this game are terrible, unless you get a ridiculously valuable drop, you're going to be poor.

Being poor and seeing what you could have, and then finding out how much time investment is required to "mathematically" get it...you just give up. In my case, it would take me about five years of spending all of my normal time on this game farming Merveil for alterations to get a Mjolnir. I'd rather be playing APB where I can have some fun.

The problem is drop rate and the value of the drops. Not eternals. Not mirrors. Not trading.

I do not intend to insult you, but if your path to wealth is farming Merveil for alts, then you are doing it wrong and it is no wonder that you think that high end items are out of your reach. As a rule of thumb you should get at least around 0.5 to 1 ex per hour. This can be done, e.g. by group farming Dominus (runners don't need good gear, they just need to know how to leap-slam to dominus) or speed farming low maps for drops and gem levels.

With 1 ex/hour any item that you desire is attainable in reasonable game-time. That is why the PoE economy is very healthy.

I generally agree with your conclusions OP. For better or worse however mirrors and eternals are here to stay. Regarding eternals, they neither solved the problem they intended to address (socket/fusing/chroming frustration) nor escaped creating new problems. To be fair to GGG, eternals were a community driven idea and implemented on behalf of the community. I guess GGG knows better than to listen now.

What would be nice is if eternals were segregated into 2 distinct orbs. One for property crafting and one for the initial purpose of socketing/fusing/chroming. In that way the vastly superior crafting preservation would not compete with the preservation of sockets/links/colors. This would allow the orb to fulfill its initial mission of abating frustration. And of course it would justify a decrease in the drop rate of the much more utile crafting-eternal.

If you're interested in the economics of the game I wrote two concise posts, both of which were discussed by the devs. As an aside I do have a background in economics and finance.

pathofexile.com/forum/view-thread/548056
pathofexile.com/forum/view-thread/805434