Feedback after nearly 1400 hours

And you are wrong about applying science here too: the entire point of the scientific method is narrowing down the variables you are looking at so that the result can be a clearly understood relationship. Yet even within science, the result isn't always a binary cause/effect relationship (in fact it RARELY is, except in the most narrow of narrow papers).....and is likely more of you misinterpreting or misunderstanding the things you are reading by only focusing on the abstract or surface level information. There's an entire section of scientific papers that must be included for publication that focuses on what further testing or future variables need to be assessed for a "better" understanding of the results.

Economics is a FIELD, not a singular equation. The market is a complex machine of interconnected parts. We can isolate supply and demand, but it isn't as simple as a binary effect: there are numerous things that affect supply, and numerous things that affect demand. And then there are separate things that affect their relationship.

You asked for layman, basic basic basic information. That was provided over and over and over again. You functionally refuse and don't understand even that....how can anyone possibly get into deeper detail here?


This is PoE economy / Real World economy at its most absolute simplistic, basic explanation.
1) More currency for everyone yields more buyer power. Imagine if you suddenly made double your current income.
2) More buyer power yields more demand for expensive goods. That awesome new computer you wanted but sticker price of $3k put you off? Well now it may seem cheap and affordable.
3) More demand for expensive goods yields higher prices
4) ***In the real world (not PoE): companies will maximize profits by making MORE of the popular product and tasking entire teams of people to analyzing data and figuring out the optimal supply/demand ratio for profit. In PoE, the supply is instead "capped" by the speed of the game which farmers tend to already maximize. Thus, supply does NOT increase.
5) Continued rise in demand, with no increase in supply yields an imbalanced relationship which increases prices further. Consider things like paper towels and things during the pandemic: prices skyrocketed because supply couldn't keep up with demand. Consider gas prices during the pandemic: demand sharply fell before supply could adjust, and so prices dropped dramatically. Consider electricity prices NOW: data farm demand is far exceeding the available supply and so electricity prices are rising rapidly.

Because of #4, it is impossible to give a binary cause/effect "rule" to the PoE market as some items such as scarabs and things can be found at such a great rate that the supply WILL keep up with new demand and prices may stay the same or even drop......but the rarer the item, the less true this becomes. And therein lies the problem: when talking lots of divines, we are already in the territory of rare items and beyond.

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cowmoo275#3095 wrote:

5) Continued rise in demand, with no increase in supply yields an imbalanced relationship which increases prices further. Consider things like paper towels and things during the pandemic: prices skyrocketed because supply couldn't keep up with demand. Consider gas prices during the pandemic: demand sharply fell before supply could adjust, and so prices dropped dramatically. Consider electricity prices NOW: data farm demand is far exceeding the available supply and so electricity prices are rising rapidly.

I play SSF exclusively (so far), so I've been reading this mostly for the economic analysis. I wonder about price elasticity in the above example. If divine orbs became twice as plentiful from all sources, clearly more people would want to buy items with them. Thus demand would rise, and so would the price. If we all knew that the next league would have this effect, I imagine that at least some of the new valuation of divine orbs would be factored into the price of items.

So what does that mean for Mageblood prices? My first impulse is to say that they would double in price to match the devaluation of div orbs. It's literally a currency devaluation in this case, as everybody has twice as much money as before, so that money buys half what it used to.

Where I imagine the elasticity issue comes into play is for people who follow one league into the next and experience the changed price. Would that encourage people to just use another belt and drive the price lower? Would more people try to match the new price because they have more currency, and drive the price higher? Would people freak out and decide to keep chaos orbs as their reserve currency, or otherwise diversify their portfolio (so to speak)? I don't actually know.

I would definitely be interested if there is already data analyzed on this subject in any case.

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RedHenrik#7065 wrote:

I wonder about price elasticity in the above example.

Price elasticity is one of those factors I was intentionally avoiding because its hard to predict and can make the entire picture murky.

But you are right, price elasticity is one of the biggest contributers to changes in demand. Mainly, if the price raises too much, what proportion of players who would otherwise buy the item, choose not to?

The issue with PoE is there are no substitutes: a mageblood in particular is a singular item with no comparable substitute. Except for a few builds. And the PoE player, especially those spending hundreds of divines in the first place, have little interest in settling for a worse option. Even newer players. We see this in forum posts from constant complainers who say things like "You need 500div build to do x content!!!" and similar nonsense. THAT is the mentality of the average player, it would be exceedingly difficult to change that except through an "easy" league or a league similar to Harvest.


Elasticity might have an effect, but because of the lack of competition I don't think it will have as large an effect as, say, price increases on your favorite cereal or snack. Additionally, many players (who use mageblood or know mageblood) see mageblood as "necessary" rather than a luxury, which greatly changes the elasticity curve. It's not true, but that is certainly the prevailing belief.