RE:krono inflation

In my hypothetical scenario it is 100% true.

I changed the salient words to bold, italicized, underlined, maximum size, and red to assist anyone who was unclear about what I was saying.

I don't want to seem mean, but what part of "my hypothetical scenario" is unclear?

There is no mistake. The point of my hypothetical scenario was to focus in on the fact that, at some in game price, SOE will maximize profits. None of us knows what that price is. SOE doesn't know. But it's there, somewhere. However, this market is distorted by speculation, and that is driving the in game prices up. Whether that distortion leads closer to maximized profits or not depends on which group (buyers or sellers) is the more elastic.

You keep missing the most pertinent point...
Person A buys a Krono from SoE and puts it on the broker for a certain price.
Person B buys the Krono from the broker for the price Person A is asking

What happens to the Krono after that has ZERO impact on whether or not Person A. The person who spent the real money has gotten what they wanted out of the Krono and if they're happy with the results, they'll do it again.
It makes absolutely no difference to Person A's Krono experience if Person B redeems the Krono for game time or puts it back on the broker for a higher price. In both cases, Person B (or somebody like them) will most likely buy another Krono from the broker the next time Person A puts one up. I'm not sure why you think Person A will spontaneously stop buying Krono from SoE if the price on the broker goes up. They'll either be happy to get more plat for it, or they'll undercut to make their plat faster.

I have stipulated over and over that this distorted market will operate in some fashion, and your example makes perfect sense. That's not disputed. I agree 100%.

However, my question is whether this distorted market will get closer to maximized profits for SOE or not? Now whether you're interested in that or not, what do you think about that?

I don't think that sellers will stop buying Krono from SOE if they're making more plat in game. I think the opposite of that and have stated so again and again.

You don't seem mean, you seem unwilling to admit that your logic is flawed and that your hypothetical scenario only exists so you cannot be proven wrong. In My Hypotheical Scenario, SOE will maximize profits by giving out puppies and kittens with the sale of each Krono. 100% true.

You also seem to completely miss hyperbole, as at no point was I "unclear" about what you said, but instead was poking fun at the fact that, in your head, in your perfect scenario, if everything lines up the way you think it does, you are 100% correct, and thus it's "obvious" why all these things that aren't happening in the real world, (i.e. Chinese Gold Farmer Speculators driving up the price of Krono), need to be "fixed" by SOE.

But, hey, if at first you can't make a point, large, bold, colorful fonts are sure to work.

I suppose I could also point out that you didn't begin talking about your hypothetical scenario until after you made the claim that there were no competing products or services to Krono, thus in no way indicating that such a claim was in fact also hypothetical, but that may just come across as argumentative.

If you want to continue trying to talk about a completely hypothetical economy in a thread that is discussing a completly real one, you may want to prepare for people pointing out that your arguements aren't how things actually work.

Dear Family,

Please allow me to share my views regarding the arguments surrounding Krono inflation. I used to work as an economic researcher (not like that means anything, but I just wanted to share some thoughts).

Due to low amounts of Krono in circulation (market liquidity), a single player of average wealth (and there are thousands of such players) can buy or sell a large share of the market. These price spikes, both up and down, are not a result of one single player having monopolistic power inaccessible by others, but rather having an inefficient market to begin with.
We need to remember that inflation can only be caused when money changes hands and moves throughout the various markets. If, as many of you propose, the Krono market is mainly dominated by speculators that would mean a large amount of wealth is kept within the Krono market. If 1 billion platinum coins are used for Krono trading purposes that would mean the 1 billion is locked into Krono or purchasing reserves, thus being removed for use in other markets. This has a deflationary effect and is similar to money being stagnated in banks or government bonds and not spent. Not inflationary as many of you propose.

Price increases in a single commodity market (krono) does not equal loss of purchasing power of currency across all markets. It is not Krono speculation that causes inflation but the redistribution of platinum from Krono sales to other markets.
No one has to worry about Krono trades causing adverse inflationary or deflationary effects because market corrective forces are always present. A higher Krono value is an incentive for people to sell and spend in other markets and when real life money is used to purchase Krono, platinum is removed and redistributed from stagnated holdings.

Secondly, it is impractical for SOE to be conspiring and manipulating the Krono market for profit. The profit from such virtual trades is very small in comparison to SOE’s revenue and human resources are better spent elsewhere.
If that trader manipulating the Krono Market was so intelligent, one would assume that he or she would be performing multimillion dollar trades in the real world financial markets with Sony’s financial reserves. Not a hired staff member of SOE to trade the Krono.

Thirdly, how do players value Krono? When Krono is bought and consumed, the player puts a RL monetary value on platinum equal their current membership payment. For instance a subscriber paying $12 a month puts a $12 value of 900 Plat used to buy 1 Krono. Not the full $17. It is the difference value that matters not the face value of a Krono.
Krono is a viable option to many people because the opportunity cost of time farming for in game gold is too high; for 3 hours of working at the minimum wage, one could buy a Krono which has a sale value greatly exceeding 3 hours of farming in game.


Romanhart
Oasis

so you are calling all speculators on the price of kronos parasites because of their actions? Do you equate this opinion to that of the real world also? Because if you review the stock traders, future buys and number other speculators in the financial world parasites also. Just because you don't agree with the world economic theory of buy low, sell high does not mean you can call the ones that do "parasites". It's nothing but basic money making 101 in the real world carried over to the game.

Speculators took down the global economy...RL. Think anyone is gonna support speculators in anything after that meltdown?

Cutting out the people marking up krono will not increase their demand.

People buy them in masse for on demand nearly instant cash to plat transfers. These people contact people like me who have stated they will buy as many as you want to sell at a fixed price.

I then take my time riding the in game marketmarket and maximizing my return. I make about 35 to 50% return on my investment, but m taking all the risk. At any time new pressures could affect my sell costs, down to SOE could permanently disable them leaving me holding 30+ krono I didn't want or need.

The buyers who haven't made the same relationship I have with sellers are forced to ride the market demand. I know there are many people like me on each server. So long as these are a marketplace item they will have these influences. He only way it could change is oif people stop being lazy and/or no longer seek immediate gratification for purchasing iron with their credit cards, and I don't see that changing anytime soon.

So basically the "cool kids" win and the "nerdy kids" lose? Cause the cool kids got the market locked down and if you aren't cool enough the supplier won't deal with ya?

I forgot to add people like me who resell are also taking most of the risk in eating a 3 - 4 week ban every time we buy from someone new. There is always a risk they were bought with stolen cards and when this happens we ride pine for weeks waiting on SoEs speedy resolution. A fine resolution that doesn't return our plat BTW.

No because if anyone buys one from you they get swatted with the same stick.

Edit: Unless you have the ability to sort which krono have been illegally purchased you have no idea how far you are spreading that ban by putting any resold krono up for sale.

Edit2: This sounds a bit like HIV...the selling of unsanitized krono causing anyone who innocently touched them to suffer a month long ban.

I imagine anyone with deep pockets and a reputation on server could make these relationships. It would be helpful if said person was also frequently involved in SLR of raid gear on said server as that more readily places you in the market.

My point is the people buying krono regularly like to find people to enable their instant gratification. As an enabler, you have the opportunity to profit if you can afford the investment.

So my Investment in buying up all the krono at or below "going rate" that I saw will finally show a profit months after I stopped playing ?

I am of the opinion that the "gold farmers" whom raise prices of the Krono actually benefit SOE's krono sales

If you look at the source of supply, it is people who want in game currency who buy krono. The higher the price of kronolat the more attractive purchasing a krono with RL money is.

That is exactly a point. People who want to buy krono cannot afford spending rl$. That is their reason. But with higher prices in plat they cannot afford them either. So what to do? To just give up and quit? Really? Would you want your friend to quit b/c for right now he or she cannot spend real money on a game. I wouldn't.

You are incapable of considering a hypothetical scenario. Fine. All that I was trying to do was get across the concept of the laws of suppy and demand and the concept of maximizing profits. I will not debate basic economic facts. You are entitled to your own opinions, but you aren't entitled to you own facts.

You simply confirmed...the cool kids win. I'm not on 24/7 to "service" these instant gratification peeps you seem to know so well. Glad you are or sounds like they'd be looking for a different customer.

Well...gee...they could go out and earn the plat by...harvesting, trading, questing, crafting. Like..a job. But only a few hours a week. If they don't have access to RL $ , but are not willing to earn a littlle plat to enjoy their game? Then don't let the door hit yer patookus on the way out.

Kronos were going for 950 plat this morning...that is easily earned in a month. By even the most part time of players.

I forgot to ask. What sort of reputation?