If I can't start the economics thread, at least I can snipe it.
If I can't start the economics thread, at least I can snipe it.
I think that Opportunity Cost (the way it is being explained to me) is far to variable to be a black or white rule. Once you end your RL income time, and are in your "personal" time - the activities you do in EVE can be impacted by the world around you. Perhaps you have small children and cannot get on vent and in fleet until hour X when they go to bed, but you can AFK ice mine on an alt in hisec during that time. In your strict definitions this is lost opportunity cost, but if you are able to makePretty much all that is wrong.some isk and have a life, that isn't lost opportunity cost vs. ratting or whatever.
Point being, it's not an obvious "do X or Y, your cost is Z," because there are mitigating factors in that beyond the simple choices of X or Y (one of which may be do nothing in EVE).
There is always an actual opportunity cost. The opportunity cost of what you're doing this very second is the most profitable thing you're not doing. Things that have no cost (e.g. playing with your autistic fucking 8 year old) don't factor into it. So if you're actively mining veldspar and the only other thing you can do is volunteer to read a book to a drooling, retarded quadrapalegic then your opportunity cost is exactly $0.
Opportunity cost is generally measured in dollars (not utils). If you can't put a $ next to it it's not a cost.
Mining your own minerals does not make your ship free. Playing with your children does not increase or decrease the cost of the your veldspar.
Why don't you people collaborate and write a bunch of different perspectives, then combine it together and edit the shit out of it. Pretend Kugu is applying for a grant or something. Simply, quit bitching and make something everyone would sign their name to.
Most economic/financial models, when tested econometrically, at first have the appearance they fail miserably. Just consider the average eve player is irrational and risk loving....the economics in eve is probably different than the text books (or the wiki-xxxxx). Not the average person in rw is rational (hah...), but more so than a college kid hiding behind a computer (he don't have anything to worry about).
Mining doesn't make shit free and I never said that. But if your world of opportunity cost revolves around a spaceship game, you have a lot bigger problems than whether to rat, mine, or PvP.
There's a difference between value and cost. Especially when talking about something measured in dollars.
I can't be the only person in here who thinks that "Kovacs" would make a great name for a brand of vacuum cleaners.
(It's a joke because his posting sucks)
[QUOTE=Matos;392349]If only that were true.
Most people/corps/alliances don't consider risk.
ad hominem much?
The desire to unironically use the word irony is painful right now. I think you'd be suprised. And I'm not even sure what an ass goblin is but I'll bet I could play one on TV at least.
And Listen, I'm not really trying to attack anybody's autistic fucking 8 year old. Really. I'm simply highlighting the hostile sterility of the economic model. Opportunity cost has no place in a discussion about reading to your kids (where that cost isn't implicit or $0). I'm sorry.
You measure opportunity cost in things you can count. What's the opportunity cost of watching this porn as measured by boners is fine. The opportunity cost as measured by my respect for women? Like saying what's the velocity of the worst idea I've ever had.
Fake edit: Your welcome and only because I was ad hominem'd into not saying how many angels can dance on the head of a pin.
The more defensive the posts get in this thread, the shittier this thread becomes. I want to read some good economic discussion, and even :gasp: constructive criticsm.
And when I say nerfed, I mean to the point where if you're in a Bantam and you're a week old that's about as far as you should go mining in highsec. Which is the case now, but macrominers and idiots don't get it yet, and need some nudging in the right direction.
Even in a thread on economics, when people say risk, the first thing they think of is getting their ship blown up.
Getting your ship blown up is only one economic risk. Which brings me back to the point, which is player economic behavior in eve is probably much different than in real life.
I'm using the same definition of risk as you would find in the dictionary, so I don't see why you're asking that question.
Stop shitting up the thread goddamn.
I'm not sure there's decreased supply currently with the announced change to Drone Regions minerals - more like the supply is still the same and speculators and hoarders are just buying early. Again, policy announcements vs policy changes. Good thread though.
[quote="Dental Floss"]It's times like these, when I look at some of my alliance mates' posting that I wish we had never formed a rep circle so some of us could learn to post better on their own merit rather than being propped up.[/quote]
E: I honestly can't think of anything else in EVE Online (other than meta-activities like spying) that can be considered risky. Unless it presents a risk to your ship or pod, it is not actually a risk.
Well, there's market risk, but in the end, you're losing assets of some kind.
Market manipulation usually implies a risk that either a) Someone else has enough stockpile to fuck you in the dickhole or b) you get drunk and forget that you were manipulating this price and then fuck yourself in the dickhole. I have done the latter more than once.
It's so sad to see people parroting the same stupid, overly simplistic definition of opportunity cost over and over again. Opportunity cost is the net value of the next-best alternative - it's surprising how often the concept is misapplied: http://www2.gsu.edu/~wwwcec/docs/ferrarotaylorbep.pdf
The net value of an activity is the benefit you'd derive plus the cost - how much would you pay to do (or not do) that activity.
Also, I wasn't aware of the insurance changes in Tyrannis. I feel like it could be exploited in a roundabout way to create a put option on minerals, but I'm having a hard time figuring out exactly how.
Also also, I never hear anyone talking about the time value of money. It's better to get 5% return weekly than 20% monthly.
Also, time value of money doesn't really matter for a lot of things in EvE since the ROI of almost every investment is linked to the amount of effort you put in, whereas in a real business your effort has a financial cost directly linked to it (ie labour hours.) You could go so far as to put an ISK value to the time you spend in game, but the day I start valuing my time in ISK is the day I've been laid off for 3 months and am trying to figure out how to pay for my account through PLEX while my cats are starving in a corner and my girlfriend has left me. I mean shit, how do you sit down and start applying G/P ratios to put together a PW analysis of some investment that involves comparisons with masturbation and drinking.
That said I think MARR's are worth learning about, particularly if tax rates increase as Dr Eyo has implied.
Edit: Also oh wow you do realize that the person who wrote that paper is completely SHIT at statistics right? Ignoring the fact that they did their entire paper on a SINGLE question (incredibly, PHENOMENALLY, bad/lazy design that even a first year would scoff at, and they even admit that it corrupted their entire research), go take a look @ table 3. There is a serious problem with their entire design (and conclusions) that is blatantly obvious there. I also liked this unsourced quote ("from a colleague") in there, mainly because I agree with it:
"[n]othing is important about a definition. It is only useful insofar as it helps us to think about a problem and to make the right decisions.”
Edit2: ....but your point stands and I'm changing the defintion. The opportunity cost in the example is 8% and the net loss due to opportunity cost is 2%. I chamged the wording in a couple other places as well. I blame this outburst on alcohol...Also, if you want a truly FUN academic paper, try this one on, The California Roll (actually called The Proof of Innocence, but my title is better.)
Just woke up and muh brain kinda fuzzy. I probably will get something wrong, but yah.. first to get example going.
If Pv>(S+Pp)-k; then "execute" put option.
Pv=payout value of your insurance
Pp= put premium (insurance cost).
K= Current mineral cost of your ship.
S=strike price, mineral cost of your ship in the future.
Also.. you have the option to sale on the market. You do not have to wait till "maturity" of the option If it becomes in demand and price rises. Sale on the market. Ignoring fees and taxes in trading...You would need to add them in ofc.This is generalized version. If S-k<0 then..
If P0-Pp>S-K. Then market order it. I took out P0-Pp here because, its assumed the ship was insured in the past. So you take market value in the future and subtract out insurance cost..
If Pv>P0-Pp and if Pv>(S+Pp)-K then exercise your option.
P0 is price in sed market.
Pv=payout value of your insurance
Pp=cost to insure it.
K=Current Mineral value of your ship.
S=future mineral cost of your ship.
The real question you should be thinking about with options is...How too...
1. Write a European CALL option on say...noxcium.
2. Get people to buy the option contracts.
3. Use the proceeds to buy shit loads of nox. Driving up the price.
3. Flood the market right before contract expires dropping the price below strike price.
A better version of mudflation than the one you gave is (isk+assets) per capita, not overall. Though Endie has a good point that you're using the term wrong, but the concept you're getting at here is important.
Good thread, couple of other things for the list.
Asset sink - "Trade" missions where the agent requires an item (not a courier item or that fake ore shit but an actual item off the market like 2000 small ammo or 10 bronze tags etc.) for completion.
Isk sink - Insurance that runs out.
And what about outposts? Deploying one would be an asset sink yes?
Never underestimate the power of stupid people in large numbers
thank the christ for that budda.
HAvent previous iterations of the allaince tourney acted as an isk sink, previously wasn't raw isk required for entry instead of plex like this year?
From the patch notes for Inferno, coming tomorrow May 22nd;
Market tax has been increased from 1% to 1.5% as a part of our initiative to keep the EVE economy healthy.
CCP has missed numerous opportunities.
(and it should have been 2 or 3%, but that doesn't really matter as much)
Setting myself up to snipe this thread isn't an honorable posting thing to do.