Dr. McB explains the economy in Path of Exile

nice post doctor mcb :)

although i am not so sure of why was the reason for it ? food for thought ? spreading your love for economy analysis in video games ?


you can summarize the whole post in one sentence

First, you start with the irrelevant and mildly grating quote and introduction paragraph. Thank you for leaning over us, oh imperfect mortals :/

I paged through the entire thing, but stopped taking it seriously after I read what were your initial theories/assumptions and explanations.

No way a bell curve represents the spread of wealth in a typical league. Its just slapped there because it fits the very long discourse. No proof or even any reasoning is provided for using the bell curve, you might as well have used random My Little Pony fanart in that section and described it.

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If you combine all trades in the economy, the net result is that gear flows from right to left. This is because players in the higher tiers find upgrades, then can sell their old gear, because it upgrades a player in a lower tier.

Simplistic. While I can agree that probably there is more movement from the rich to the poor as far as items go, neither is that created by altruism nor does it give justice to the entire spectrum. What about players who can't be arsed with trade and just vendor/store their stuff? What about those who give it away?

What share of players upgrades via stuff they find, what uses currency gems? What share of the players farms items to sell them, distorting that part of the curve (because they amass way more gear to sell than a player who just wants to upgrade his stuff would?) There are plenty of questions that you not only do not address, but seem to ignore. But well, you don't have any data, so yeah. MLP land.

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However, the upper tiers will not trade their old gear away unless they can get something worth their time. This is why economies have currencies.

What does this mean? Economies have currencies so people can trade their loot and feel its worth their time?

I'm not sure what this is, but its surely not a currency (which in very basic terms is a method of assigning value to work) and it sure isn't why there are currency gems in Path of Exile.

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In simplest terms, a currency is a tradable game object which flows from left to right, in the opposite direction as gear.

What? No. Not even in an actual economy.

First, again, currency is a artificial (or natural, but thats mostly not used) item that is used in exchange for work and can be traded for other work. If a currency, even a virtual one, by default floats only one way in the curve you presented that is a sign of a very serious problem with the entire system.

But thats not even the main problem.

Path of Exile's currency not only has other uses outside of trade, more often than not it is those uses of the currency becomes what the traders are looking for and as such it can be both the commodity and the means of acquisition.

You then close it with another paragraph that completely defeated me. You state:

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A well-designed currency is very useful to the highest tier and less useful to low tiers. This causes it to have to appropriate flow. A good currency is one useful to the player who already has "everything."

That is nonsense. That would be a very weird statement even if we were talking about an actual currency, but even putting it in PoE frames, the entire statement is logically contrary.

If something is useful to players at higher levels, then unless it is also a barrier for lower level players to get to that level (hint: It is not, because you have other ways of getting there) you can't make it "less useful" for lower level players.

The only way what you are saying would be true was if that low/mid level players were somehow barred from getting currency. This is false, all players can use any currency at any time.

In fact, unless you assume that low level players stop playing at some point for some reason, they would be really stupid to give away currency items that will be very desirable for them in the high levels. Thats the logically contrary part.

You are perhaps trying to mention that the "high level" players tend to perceive currency as more useful because the gear they already have is good enough that you need a lot of various rolls to get something that would be comparatively better. But this does not make the currency less useful for lower level players nor is it more likely to make lower level players want gear over currency. Again, no data and flawed assumptions lead to very bizarre statements.

So yeah, with such flawed statements in the opening, I fail to see how any of your conclusions could be right. I've found more weirdness and logic leaps as I read through, but thats enough.

You completely disregard the duality of the "value" of currency items in PoE and by that disregard the primary factor that not only drives PoE's "economy", but also lets the more savvy people abuse it. Because at any given time the perceived value for a specific currency item can be higher or lower, both the "value" of items being traded and the perception of a "fair" deal is very different from deal to deal, especially if you look at it on a global scale.

End in end this is a simplistic, flawed, logically incoherent text with no data. Not the robots you are looking for.

Everyone benefits from trade simply by the fact you accumulate currency on worthless or inapplicable, to you, wares. So you're richer at the end of the day no matter tier just selling shit not good for you and good for someone else.

The you got that someone else you sold X to. He's happy because he could play a lifetime and not find it.

Lowbies benefit the mostest simply because there is a shit load of good gear so cheap.

Highboys second because they can take advantage of highly desired items.

But everyone benefit.

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jamnik_pucek wrote:

stuff

You are talking about totally different stuff. What he said was simple introduction to how currency and trading works in general - not in depth, antithetical research about all factors that can make trade work one way or the other.

You say that his statements are "logically incorrect", yet you go with something like this:

"

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In simplest terms, a currency is a tradable game object which flows from left to right, in the opposite direction as gear.

What? No. Not even in an actual economy.

First, again, currency is a artificial (or natural, but thats mostly not used) item that is used in exchange for work and can be traded for other work. If a currency, even a virtual one, by default floats only one way in the curve you presented that is a sign of a very serious problem with the entire system.

But thats not even the main problem.

Path of Exile's currency not only has other uses outside of trade, more often than not it is those uses of the currency becomes what the traders are looking for and as such it can be both the commodity and the means of acquisition.

You first explain currency definition that is completely irrelevant for PoE, and then you proceed to correct it, as if he did not use the correct definition... wait what?

He said EXACTLY what is happening, and what you are explaining in the last paragraph is EXACTLY the cause of that.

[Removed by Support] - it seems to be picking out points, saying that they are "simplistic", "logically flawed" etc. and then you proceed on saying exactly same things, or explaining the points, bringing out some definition AND saying the same thing.
You do not propose any other theory, nor you provide any data. You accuse him of simplicity and not being "scientific" about it, yet you fail to provide any scientific mean of proving his theory wrong.

Perhaps I should have specified in-game economy in the OP, given jamnik's references to actual economies.

If you try to apply my definition of currency to the real world it doesn't work. But if you try to apply a real-world understanding of currency to games it doesn't work. In real life everything decays, dies, depreciates, is destroyed, lost, stolen, gets hungry, thirsty, cold, hot, dirty, sick; the law of entropy is always at work. Not so in a game economy; there is no entropy except where game designers specifically add it. This fundamentally changes the propose of currency in a real life economy, as goods and services need to flow all over, not just right to left.

A game economy has use for "polarized" currency that doesn't correlate to real life economies. It isn't a sign of a "very serious problem" in any kind of obvious, self-evident way. If you have a point here you'll need to elaborate.

As a side note, the existence of multiple subjective interpretations of reality (my own among them) does not alter reality itself; it continues unphased by our beliefs about it. In the same way, we can all have our own subjective pricing, but the market value of an item is an objective, albeit elusive, thing.

Lastly, about players eventually being high level and thus should hoard all currency: this is a fair point actually. But ultimately, a new upgrade (traded or crafted) is about weighing the value of currency later against the value of being able to farm more stuff faster, now. It's almost as if you're arguing against getting a loan or other credit in real life - yes, of course the interest is bad, but it can still be worth it.

One question about trading as a whole. Why is it that currency has no referable or discernible in-game value yet? Misinformation creates a breeding ground for predatory marketing, less so now that essential support gems can be attained before merciless, however it still happens.


Also as far as the entire OP goes, where is the data? All that I've read so far is simple preaching at best.

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Moosecat wrote:

Also as far as the entire OP goes, where is the data? All that I've read so far is simple preaching at best.

The OP is based on three core ideas:
1. Supply and demand. If you need me to prove this to you... well, no.
2. The Thrift Shop Rule. This is basic, solid logic of my own design. But it is logic, and as such doesn't need much evidence. It just is. And you can confirm independently if you wish.
3. The idea that the majority are average players and that both poorly-progressed and highly-progressed players are small minorities. Admittedly, the "bell curve" thing is an oversimplification and this area really could benefit from more data. However, ignoring the more technical specifics of normal distributions and just focusing on the core of the idea, it works well as an approximation of what is actually occurring.

I doubt I said anything which isn't derived from those three core ideas.

Also... Couldn't I at least get credit for complicated preaching?

All of this math and statistics...

Please just tell me who I need to vote for in the Wraeclast elections to be in Tier 2.

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Perq wrote:

Good read - kudos for the truth. Sadly, only few people realize that, and prefer going on and on about trade being a terrible thing.

trade is not a terrible thing. it makes the world go around.
trade as a focal point in a game that is an Action RPG, is.
note "focal point". meaning it can - heck, should - exist as another of the game's many features, but never be something the game itself revolves around.

as for "rain", though I did enjoy the "rain" in One Month Flashback and Exiles Everywhere. loved every second of it. I do understand "making it rain" is a mistake in the long run.
which is why I've been screaming "risk/reward" for 2+ years.
because "risk/reward" isn't "rain". it's earning whatever loot you may need (and not with town-flipping heaps of Exalts), and having the game take "educated guesses" about what you may need next.
the 2nd part btw, is already partially implemented. see the Gems that Vendors sell.

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Prisus wrote:

All of this math and statistics...

Please just tell me who I need to vote for in the Wraeclast elections to be in Tier 2.

No just buy low sell higher.

That goes for all tiers too and RL