Then the speculators buy them instead, making the price too high? Then they're sold for higher, which the speculators use to buy more cheaper credits later.

Of course speculators aren't the only cause for the price level of credits, otherwise the credits would become free once the experiment started.



I'm not sure what Clementius's definition of "a very large number" is exactly, but he obviously has a way to track the credits or the sales, and speculators obviously do have an impact. I can't imagine eliminating the buying for resale raising the price of the credits.

The speculators can buy and sell higher only because they know people will pay higher. If people do not think credits are worth 7k apiece, no speculator is going to be able to sell them for 7k apiece. Credits via the credit market are not a necessity for anyone, so nobody is forced to buy them. If people agree to buy them at 7k apiece, then that is apparently what they are worth. If people refused to buy any credits over 5k, then the market would drop do around 5k because speculators could not make money selling credits for 7k anymore. In the end, it still all works out.

Let's say I bought all of the credits currently on the Lusternia credit market. In an interest of making tons of money, I placed them back on the market for 15k each. Most likely, nobody would buy any of the credits, so I would basically be out a lot of money. In the interest of making money, I would have to drop the credits down to a cheaper price, until I found one that buyers would agree on. That is the same even if I buy every credit put on the market for cheaper than mine. People will just do without credits until I sell them at a price they want.

People will pay higher, yes, but in your scenario, its completely the speculator's fault that they're doing so. People's willingness to pay more for credits is completely irrelevant to the idea of speculators causing the price to rise.

It is relevant because they are contributing to the higher prices. The speculator tries to sell at a higher price. If people buy, credits stay at that price - the seller and buyer agree that it is a fair price. If people do not buy, the speculator has to drop his prices, which means that everyone gets credits for cheaper.

The very thing that determines the value of something is what people are willing to pay/sell it for. A credit has no inherent worth; there is nobody who can step forward and say "it is worth exactly 4,250 gold." It is worth whatever people agree to buy/sell it for. If a buyer and seller agree that a credit is worth 8k, then by all means let them sell it for 8k. If the majority of buyers insist that it is only worth 4,250 gold, then the average market price will drop to that.

Of course, the exact same credits would be there at a cheaper price without the reselling-- the resellers don't actually add anything to the market.

That's one thing that's missing in the whole supply/demand argument of yours. There's a limited supply, and the buyers/sellers have a decent price. Resellers buy it out, put it up at a higher price... and then that's all that's left. There are always a handful of buyers willing to buy at pretty much any price when desperate, and they provide the illusion that "buyers are willing to buy at that price" when most aren't. I've seen resellers buy out *everything* and put the remaining credits up at 6000... buying out everything put up lower than that as well for a while. Credits pretty much never sell at 6000 here otherwise, because general market-share doesn't value them that highly.

If there were enough credits on the market that one person couldn't buy them all out and wreck it, you'd have a point. As-is... it's a severely hampered "free market".

Lusternia is not a world with full economy. While it might resemble it to a certain point, it just isn't. OOC credits are the currency influx from outside the system, which doesn't happen IRL. Also, business practices are regulated IRL.

That's what went through my mind as well thinking this over, trying to think of any downsides, and then dismissing them.

The -only- possible downside I might see happening is that those buying credits with OOC money might have to wait a little longer for their credits to sell, since demand for the -initial- credits would go down, due to the speculators not profiting from their scheme, and thus not buying credits they don't need.

I'm not sure I like this idea at all, although if Achaea proves it successful then all well and good.

I agree with mitbulls about the supply and demand model being fine, and pesonally I don't agree with speculating being made out to be a terrible evil. I used to try and buy commodities when they were low, and hope that prices went up some stage later to make a profit, isn't that speculating? Although I was never really interested in doing that kind of thing much with credits, I don't see why it is a such bad thing for some people to make money in that way if they choose - is it really that different to buying commodities at a low price and charging a profit for a finished product? ('Labour' doesn't really come into it when it boils down to one or two text commands).

The other thing I don't really like is that if you buy ooc credits, the conversion into gold will no longer be a true two-way transaction. As the availability of new credits is massively reduced (only those people have bought ooc directly will be purchaseable), the security of being able to convert back into 'safe' credit wealth is also much reduced, and therefore I would want a hellova lot more for my ooc credits if I'm going to risk selling them. I think the prices will be driven much higher, and it will (only slightly, perhaps) inhibit the access of credits to non-purchasers.

If people are just buying credits on the market and reselling them for more gold on the same market, the availability isn't changed a bit.

Cross-posted from "Lusternian Economy", because it really belongs here.

Am I the only one who doesn't think there's a real problem with the credit market at the moment? 5k seems on the highish end, but nothing that requires an overhaul of the current system; it's not like Imperian or Aetolia are selling at 2k (are they? ) Speculating seems like a bad thing to me, in general, but there's a line between speculating and investing, and credit-market-bound-credits removes that option to buy credits and hold on to them for a month or two then resell, because you think the price might go up (or, conversely, converting all your credits into gold and storing it in a bank because you think a price drop is coming).

It's not like we'll run out of credits on the credit market. There's always going to be people willing to spend real money on Lusternia (and if there's not, we're in bigger trouble than high credit prices) - and everything you want to do with credits you can do with bound credits, as far as I can see, except playing the market (or gifting them to poorer/newer players or friends, I guess).

One sentence summary: Introducing a credit-market-sells-bound-credits system would limit speculation but reduce dynamism, which is bad, and would be an attempt to fix something that isn't broken in Lusternia as far as I can see.

EDIT: Ooo, look, free increase in post-count.

i'm almost positive the divine log every credit purchase from the market or something similar. Remember all those anabelle credits? like 5k credits on the market sold at 1 per, this has happened numerous times and then Estarra has to go through the trouble of tracking everyone down one by one and refunding them then taking the credits back.

The argument that demand will fall is false. IF you are a cigarette addict and prices go up you are more likely to forgo something else than quit smoking. If the price of milk went up and you have kids you will still buy the milk. You need credits to get artifacts and its a better way to get lessons than relying on leveling for them. They will still be in demand. People will sell them for gold, like is done now, however with this method speculators would not then up the price.

Yes buying up all lower credits to mark them high hurts the people who have to pay more because you want to make 100 gold per credit. Why should a cameo cost 5 million gold just because someone wanted to buy everything from 4K per credit (making the cameo cost at that time 4 million gold)? Speculators in this case are buying and selling a valued thing that indeed does come from outside the system. If you could buy an artifact in gold credits would have less value, and only have purpose in lessons.

The economic model falls apart when you remember that some things arent replaceable, you will pay more to be sure you can get it. If you need a cameo and cant get OOC credits you would pay 10K per credit in game, because its the only way. That simple, however that makes learning and artifacts far more costly.

Short summary:
Credits cannot be gotten other ways reliably, and are not replaceable. If prices go up people will pay because they have to, not because they want to. An addict will buy cocaine if the price goes up, so will artifact buyers.

Been a while since I posted last, but yes, I'm reading your forums!

I've been on Imperian since I left Lusty, and their credits are routinely going for 7-8k. In fact, the organizational credit sale that just happened for my council sold them for 7.5k. It's a bit more expensive than Lusty credits, from what I hear...

And in case you're wondering, no, I don't think gold in Imperian is that much easier to earn than in Lusty...there are some extra sources, such as fishing and caravans, but I'm earning gold at about the same pace in Imperian as in Lusternia, given about the same time and effort...

And I agree with some of the people who have posted before me. You can't compare the credit market in Lusternia to a regular, real-life market for a certain good. One reason is that you're exchanging GOLD (another imaginary currency) for credits. I have a feeling the fact that money (in real life) can actually make a difference between life and death (or actual comfort/discomfort) is a big impact in the supply/demand model...

A really simple example in case I'm not articulating this correctly: Bob would buy a credit on Lusternia for 5k gold IMMEDIATELY once he gets 5k gold from bashing, because he doesn't need necessities such as clothes, food, money for bills, etc. But, in real life, where he -does- need all these necessities, he might even pass up on a $5 cup of coffee even though he earns $10 an hour. It's not a spectacular or very accurate analogy, but you get the idea. Psychologically, gold != RL money.

Actually think gold can be equated to RL money, as other threads have. You can pick a package and say ((Credit market current +- your select amount) * number of credits) = gold value.

Would be something good but it was compared at one point, and you get more credits working and buying credits than bashing nonstop at the same time rate.