Eveconomics

Tritanium Prices going crazy

EVE, ever since it’s inception, has had insurance. And insurance is great, right? You can fly a battleship and almost make ISK off it due to insurance. Insurance IS very important for EVE and it’s economy. Say that EVE didn’t have insurance, what would happen? People would stop flying large ships, like Battleships. And they would fly less, lose less ships and hence stop consumption, ruining EVE’s economy. Consumption is very essential in any economy, meaning that insurance is critical in EVE.

But what we have seen over the last few months is that there has been price deflation in the mineral market, causing ship prices to also go down. That’s good, right? Well, what you’ll find is that the difference between the price of the ship and insurance cost compared to the insurance payout becomes so large, that there’s a profit to be made. What happens then? People buy ships and and self-destructs them.

This causes an increase in demand, increasing price. This means that there is an artificial minimum price of minerals. Furthermore, insurance is an ISK Faucet, which can be argued to be a further cause of price deflation, creating a multiplier effect.

Another “Market-cap” is the current NPC-market mechanics. CCP has artificially capped the price-range of which the price of a NPC-item can move. Say that there was a sudden spike in demand for Capital Ship Blueprints, wouldn’t you expect the price to increase drastically? That’s supply and demand, right? As it stands, the maximum price increase according to a roundtable at Fanfest 2009, is 15%.

For consumables like Nanite Paste and commodities used for POSes, this is a tragedy. It makes NPC-trading limited and it doesn’t make for an immersive feeling of the market. And it doesn’t reflect the behavior of the players very well, which is otherwise what prides itself on having: A totally player-driven market.

Come 2010, I hope that CCP will look into the artificial market-caps there is in place and nerf the hell out of them. However, it has to be done carefully. If they are too heavy-handed, it might decrease the overall level of consumption in EVE, which is going to cause a recession. It would be major economic event, and it will effect the economy considerably in the short-medium run. However it’s a change that has to be addressed soon, preferably in 2010, before Dust and Incarna ships.