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Rahjadan Shardur
Minmatar Duty.
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Posted - 2009.12.25 01:11:00 -
[1]
As of late I often hear form people that they build or buy Battleships, insure them and then blow them up to get profits. I have actualy done it myself a few times. However this effectively removes Minerals from the market as they are converted directly into ISK and not used to meet the marked demand. Lowering the Insurance payout would remove this (probably unintended) mineral sink and so lower general prices on the market. ------------------ In the beginning the Universe was created. This has made a lot of people very angry and been widely regarded as a bad move. (Douglas Adams) |
Cheeba Don
Fusion Enterprises Ltd C0LD Fusion
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Posted - 2009.12.25 01:14:00 -
[2]
Yes. Insurance places a minimum threshold which holds mineral prices up.
If insurance was removed, mineral prices would crash. With no insurance, you could say hello to 20mill bs! ---------
oOk! |
Llu
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Posted - 2009.12.25 06:05:00 -
[3]
Removing the insurance on suicide option alone would go a long way of fixing insurance as most people will not want to sit around waiting to blow themselves up with a second ship due to isk vs. L4 missioning alone.
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Jagga Spikes
Minmatar Tribal Liberation Force
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Posted - 2009.12.25 08:57:00 -
[4]
Edited by: Jagga Spikes on 25/12/2009 08:58:52
Originally by: Cheeba Don ... With no insurance, you could say hello to 20mill bs!
20mil you wouldn't get back when BS pops.
i don't really have preference whether insurance should stay or go, but i'm honestly curious if mineral prices would go that low.
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Herr Wilkus
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Posted - 2009.12.25 10:17:00 -
[5]
I'm actually quite curious about this too. Its clear that too many carebears are pumping out too many minerals chasing too little demand (due to lack of major 0.0 wars and capship death.)
But I haven't dug into it enough to guess where the 'true' equalibrium might be, assuming no major wars driving up demand in the near future...
Are there any intelligent theories out there, or do we just not have enough access to data to even guess? Quite possible the statistics required to figure this out are locked up on CCP's servers.
Would a Tempest drop in price from 70M to 50? 35M? Just how overvalued ARE minerals right now?
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Hamano Walker
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Posted - 2009.12.25 10:42:00 -
[6]
Edited by: Hamano Walker on 25/12/2009 10:42:51 Let's take as a given that people who spend an hour or more popping ships for insurance are not multi-billionaires. In fact, if people are buying them off the market to pop, we can safely assume that their assets are <100% of the price of the next highest BS that can be popped for an insurance payout. Looking at the current market leader (the one most disproportionate to its insurance pop price) in Jita the profit per unit is about 1.5%. Assuming you can blow one ship every three minutes (which may be generous), a 100m isk player is making 30mil an hour on this.
Now let's assume you're producing them yourself. The profit margin approaches 10% if you buy the minerals. This means that with dedicated poppers out there, the underpriced minerals could easily rise 5% while still allowing a margin of 5% for the builder (let's say 3% if they sell it at 1% less than pop price and account for taxes and such). Building takes a lot longer than just buy and pop, though, give or take four hours per unit. And let's not forget that in a gamer you pay real money to play, repetitvely blowing up ships is about as dull as you can get (except for mining). So if the demand for self destructing wealth creation is so big, wouldn't prices rise to match the demand?
A multibillion isk operator with access to vast resources, freighter contracts etc etc can build much bigger ships, but the ROI is still the same.
No, and here's why. The more expensive minerals in a T1 ship are actually market priced way above the default value accounted for in insurance. On the other hand the low end minerals may be half or less the "base price". Because these are the minerals that anyone can mine there will always be a surplus of them. A brand new player may just sell market. A player one notch up is going to set a price .01 under market to make a better profit. An experienced trade player won't bother touching low end minerals because of all the downward competition and will instead focus on the greater margin/unit of the higher end minerals.
I wish I had the link, but there's a post about someone wholesale manufacturing thousands of ships for billions of self destruct profit buying strictly from market at Jita. The end result? Prices didn't budge. . . because at those levels there simply isn't much relation to the macroeconomic forces everyone cites.
Edit: If you want to see the system default values insurance is calculated from http://games.chruker.dk/eve_online/market.phpclick here[url].
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Andron Blaxcor
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Posted - 2009.12.25 13:13:00 -
[7]
We've had similar posts in MD for weeks. Have a look in the past few pages if you want a more in depth discussion.
But, basically, mineral prices need to be kept up or there will be serious (price) deflation. Insurance does this. Price deflation is bad because it is a positive feedback. The faster prices fall the fewer people buy (why buy now when you can buy for half the price in a week's time?). Meanwhile, stockpiles are dumped to try and recoup some money. Demand shrinks, supply rockets. Prices plummet. Bad for the economy.
Also, it's unclear whether prices would hit another lower cap provided by market forces. My feeling is not (but this is only a feeling). In which cases prices of minerals and derived products shrink to zero and the economy breaks. Very bad for the economy.
The reason insurance is playing its vital role now is the uncapping of low-end abundance in high-sec over the summer. This had provided a potentially infinite mineral source. Supply of low-eds in particular has rocketed. Insurance is necessary as a potentially infinite mineral sink to soak up these extra minerals. The net result has become that extra mining causes isk to enter the economy overall (through insurance), similar to how mission running rewards and bounties cause isk to enter the system. This causes monetary inflation which may not be ideal (but that's another discussion entirely) but it's certainly better than the alternative of lowering or removing insurance causing price deflation.
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Herr Wilkus
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Posted - 2009.12.25 16:29:00 -
[8]
Well, I've heard people argue for keeping insurance to protect poorer PVPers.
But arguing in favor of the mineral price floor? Interesting.
Artificially propping up mineral prices via rampant ship self-destruction seems to me to be a problem to deal with - not a necessary evil to accept.
Personally, I think we need an old-fashioned world war, but we can't bring back BOB, or make the alliances start exploding their capships.
Barring that, I'm advocating some slight changes (pirate sec-status amnesty for ISK/sink) that would lead to more violence directed at the hisec producers of these resources.
-'Violence' pushes up demand slightly, (hopefully replacing the ultra-stupid self-destruction/fraud) -'Violence towards producers' restricts supply, forcing them to be less efficient or to change jobs.
Would it be enough? Don't know - I'm sure it depends on how depressed mineral values 'actually' are...how much hi-sec disruption would it take to drive mineral values above the insurance floor.....?
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Vasta Magna
Yarex Shipyards
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Posted - 2009.12.25 16:54:00 -
[9]
Why would we want to lower prices? Things are too expendable as it is. Higher prices = greater consequences = more fun, imo.
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usrevenge
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Posted - 2009.12.26 06:29:00 -
[10]
make highsec mining not fail k thanx
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cosmoray
Bella Vista Holdings Corp
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Posted - 2009.12.26 06:50:00 -
[11]
Mineral price crash, but no moon products/reaction products price crash.
1. T1 ships are cheap, T2 ships remain expensive. 2. Mining makes very little money with mineral price crash (1-2M / hr) 3. People mine in Covetors not hulk/mackinaws (reduce risk of loss of expensive ship and covetors are T1 and would be cheap) 4. Module from missions become worth a lot less for reprocessing.
End result is 2 main professions have a dramatic decrease in income (mining / missions). T1 manufacturing makes NO money T2 becomes too expensive
The player base becomes poorer via deflation. Less activtity in the game. Game stagnates.
CCP does not want someone losing their ship and not be able to replace it.
Insurance, even if it is not perfect supports the entire game to a certain level.
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Aurellia Tovasch
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Posted - 2009.12.26 16:37:00 -
[12]
A simple solution in concept to the perceived "problem" of insurance fraud (though perhaps not so simple for Eve programmers) is to make the insurance in-game more like real life insurance. Charge higher rates to insure ships for people that lose a lot of ships. Establish brackets of insurance rates...so that if a person loses less than 2 ships per 24hr period they're charged current rates...from 2-10 ships per day the rate goes up somewhat...etc. And for a dedicated ganker or insurance frauder going through hundreds of ships in a day the insurance rate would go so high as to make it completely unprofitable. This wouldn't completely eliminate ganking and fraud, but it would require them to produce, insure and pop their ships in bursts...with a cooldown period afterwards as their insurance rates go back to normal. Alternatively you could lengthen the time the rates keep track of losses up to a month so as to modify their behavior on a somewhat longer-term basis.
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Herr Wilkus
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Posted - 2009.12.26 19:28:00 -
[13]
Yeah, I've been on the fence on the 'remove insurance' issue. If minerals reflected their 'actual worth' rather than their insurance inflated worth, miner's incomes would crash. (which would probably help solve the oversupply problem, as fewer people would be willing to mine for 1M/hr...) Of course, T1 goods would also be much cheaper, but T2 goods would become prohibitively expensive relative to income.
However, it is good to see (from cosmoray and a couple others) that there is an argument keeping insurance in the game - which suggests solving the problem by forcing up mineral values is the better way to go.
I prefer to do this through less efficient resource gathering by increasing ganking and attacks on MRs/Miners/haulers, as it affects both the supply and demand side of the equation, plus introducing a new ISK sink.
Perhaps there are other ways (adjusting mineral tables, spawning/availability...) - but I'm not sure how that can be done without adversely impacting carebears' income...
With more ganking - rewards are conferred on the smart and the wary, while punishing those who continue to fly 200M+ Hulks without bothering to tank it.
By changing mineral distribution or yield or drop tables, you are essentially just restricting mineral uptake which simply cut their income by a less direct means.
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Andron Blaxcor
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Posted - 2009.12.26 22:49:00 -
[14]
Originally by: Herr Wilkus However, it is good to see (from cosmoray and a couple others) that there is an argument keeping insurance in the game - which suggests solving the problem by forcing up mineral values is the better way to go.
I completely agree. A market where mineral prices are set by insurance will work as a market but, in my opinion, is not the most interesting market to live in as it is too static. Supply and demand affected by wars etc would be much more interesting. Now all we need is a good war to get things off the ground. Let's hope someone's finger slips on the big red button.
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Herr Wilkus
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Posted - 2009.12.26 23:14:00 -
[15]
Whoever said that 'war never solved anything' obviously never played Eve.
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Hadiax
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Posted - 2009.12.29 11:34:00 -
[16]
I find that there could perfectly be something much more realistic than this insurance 'fraud' to keep the mineral prices up.
At some point, just let the npc factions put out buy orders for minerals, after all, they can build ships too, and need minerals for this, could even make it so that when a certain amount of minerals are sold to them, and they are processed into ships, these ships are then sent into 'war' with their opposing faction. To me at least, this would make more sense than having this insurance thingie. Obviously their buy prices should be low enough as of not to interfere with the current markets, because then nobody would sell to players anymore, this system needs some tought, but I'm sure that in one way or another this insurance problem has to be solved, since seriously.... no insurance agency would keep selling insurances only to loose tons of money.
Just my 2ISK
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InUrJita CheckinUrPrice
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Posted - 2009.12.29 13:20:00 -
[17]
Limiting free storage, and charging fees for additional storage, would go a long way to solving many of the systemic market problems in Eve.
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Thrasymachus TheSophist
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Posted - 2009.12.29 17:32:00 -
[18]
I thought this was a sandbox? Adam Smith's great experiment?
Drop insurance. Let mineral prices drop. Watch as T1 ships become cheaper, mission rewards become more meaningful, mining less profitable, and PvP less costly.
Where will the market go from there? Let supply/demand decide, instead of insurance fraud.
No one can predict whether the end result will be good or bad, since the underlying theory of a free market is that you will reach an equilibrium.
Get rid of insurance. |
Kyle Cataclysm
Blue.
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Posted - 2009.12.29 19:57:00 -
[19]
Edited by: Kyle Cataclysm on 29/12/2009 19:59:52 Remove insurance to decrease ISK supply in the economy. Remove NPC starbase sell orders and seed blueprints for all starbase modules. If the first two cancel out each other, demand for minerals is increased. Suicide ganking is fixed, too.
Success is not guaranteed, though.
edit: Forgot two things: remove T1 loot from loot tables. If theres too much isk in the game, increase sovereignty costs.
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Vazara
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Posted - 2009.12.29 20:01:00 -
[20]
I would like to see player-run insurance companies. Set up in a similar way, where the player could choose their rates/reward from a multitude of Corps meant specifically for that. The actual payouts and such should be fraud-proofed. (I.E. No bait-switching ships. It's set up through the game like current insurance.)
Not sure if it's practical, but it sounds exciting and I know it could provide solid investment plans/opportunities for Corps.
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Clive Cauldron
Minmatar Sebiestor tribe
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Posted - 2009.12.29 21:17:00 -
[21]
I'm not sure how much the mineral prices would be affected in either direction, but the insurance system never made sense to me in any case. You get reimbursed for blowing up your own ship. In real life if I crash my car, or burn my house down on purpose insurance companies don't pay out.
Maybe they need to increase premiums (cost to insure ships per se), or fine individuals who take advantage of the system. LOL, Concord should open up a insurance fraud division. Signature: Reserved Parking. |
Kagan Storm
Caldari Ghost Armadillo Legion
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Posted - 2009.12.29 21:20:00 -
[22]
Edited by: Kagan Storm on 29/12/2009 21:23:07
Originally by: Kyle Cataclysm Edited by: Kyle Cataclysm on 29/12/2009 19:59:52 Remove insurance to decrease ISK supply in the economy. Remove NPC starbase sell orders and seed blueprints for all starbase modules. If the first two cancel out each other, demand for minerals is increased. Suicide ganking is fixed, too.
Success is not guaranteed, though.
edit: Forgot two things: remove T1 loot from loot tables. If theres too much isk in thc e game, increase sovereignty costs.
Thumbs up for the BPO on POS modules :)
This way CCP could make another mineral sink without affecting the market... Sooner or later things will balance out.
On a bit different topic: ITS NOT THE MINERS FAULT THEY MINE..... Its everybody else fault cause people dont loose their ships that often.... Go die more... :) Stop hanging all day at lov sec gates...
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Kyle Cataclysm
Blue.
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Posted - 2009.12.29 22:43:00 -
[23]
I doubt its possible to make players lose T1 ships more often. I cannot think of a thing better than factional warfare, and even that didn't have much of an effect. With progressing time, more players are shifting to higher tech levels, too.
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Lord Fitz
Project Amargosa
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Posted - 2009.12.30 08:35:00 -
[24]
Originally by: Kagan Storm Thumbs up for the BPO on POS modules :)
This way CCP could make another mineral sink without affecting the market... Sooner or later things will balance out.
Seeding BPOs for items that are currently NPC sold would generally create a mineral sink, but it would also remove an isk sink. Better would be to remove the silly change that let people take POS mods, which means very little die, which reduces the amount of isk they sink....
Minerals have sunk so low because CCP seeded more veld in highsec, removing an incentive for people to spread out, venture into lowsec etc. If they halved the yield in highsec it might go some way to fixing the minerals low cost as well as giving an incentive for people to actually bother with lowsec, causing additional minerals to be sunk there also.
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Imbosol Norand
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Posted - 2009.12.30 13:03:00 -
[25]
Originally by: Kagan Storm ITS NOT THE MINERS FAULT THEY MINE..... Its everybody else fault cause people dont loose their ships that often.... Go die more... :) Stop hanging all day at lov sec gates...
Not everyone wants to loose a ship and some of us do not want to ever loose a ship. So far i have not lost a single ship and i hope to keep it that way for a long time to come.
Fixing insurance fraud is as simple as adding 10% to the premiums each time someone gets Concorded or looses more than 2 ships in an hour in high sec and have some arbitrary value based on average ships per hour lost in protracted low sec wars. And then each day you dont loose a ship the premium goes down 10% until you hit the predetermined floor price.
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ChronoLynx
Caldari Federation of Freedom Fighters
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Posted - 2009.12.30 17:25:00 -
[26]
The best way for CCP to fix the insurance is to have the insurance fluctuate with the actual mineral cost.
IE, Atm it cost about 70m to build a raven, therefore the insurance payout for a raven should be about 70m.
Just my 2c.
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Rediar Etile
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Posted - 2009.12.30 18:48:00 -
[27]
Edited by: Rediar Etile on 30/12/2009 18:48:20 In actuality, the whole discourse is a fraud. The actual monetary gains made by doing this is negligeble compared to actually doing the mining itself.
IMHO, I would rather see a more real life situation as expressed above AND the ability to insure mods which we all know is the true cost of the ship flown. I mean I can insure my expensive stereo in a vehicle in RL but not that T2 fitting on my BS! Why Not?
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Thrasymachus TheSophist
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Posted - 2009.12.30 18:52:00 -
[28]
Originally by: Imbosol Norand Fixing insurance fraud is as simple as adding 10% to the premiums each time someone gets Concorded or looses more than 2 ships in an hour in high sec and have some arbitrary value based on average ships per hour lost in protracted low sec wars. And then each day you dont loose a ship the premium goes down 10% until you hit the predetermined floor price.
Something like this would work, although I'd suggest the limits can be substantially higher. Nobody cares if you make 10 mill on insurance fraud per day building and blowing up ships, so you can actually have the premium increases kick on the high side, to protect these red v. blue pilots you hear about who lose 12 ships in a few hours of actual PvP.
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Dretzle Omega
Caldari Caldari Navy Volunteer Task Force
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Posted - 2009.12.30 18:57:00 -
[29]
Originally by: Rediar Etile Edited by: Rediar Etile on 30/12/2009 18:48:20 In actuality, the whole discourse is a fraud. The actual monetary gains made by doing this is negligeble compared to actually doing the mining itself.
Depends when and where it's done.
I'm pulling numbers out of thin air here, but say it would give 10 Mil profit an hour (and a considerable investment) to constantly blow up a BS at Jita prices. One would argue that's a pretty crappy profit.
But insurance is there. Suppose mineral, and therefore ship, prices dropped to a third of their present value. Giving, say, 60 Mil an profit an hour for blowing them up. That's decent profit and you'd see the ships being bought up for that purpose. High demand for ships means high demand for minerals, and the mineral prices would raise again, until the profits in the action are once again debatable.
The insurance does put a floor in the mineral basket price.
Originally by: Rediar Etile I mean I can insure my expensive stereo in a vehicle in RL but not that T2 fitting on my BS! Why Not?
Because it's a game, and arguments that I can do it in RL have no basis here. What you desire is free, no-loss PvP, which is not CCP's desire.
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cosmoray
Bella Vista Holdings Corp
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Posted - 2009.12.30 21:01:00 -
[30]
I would love to be able to SELL/BUY insurance on the market.
e.g.
1. have a market tab for insurance 2. Click on Hulk insurance 3. Choose platinum insurance 4. I place a deposit to cover the 70% payout if ship pops, and I sell a 3 month policy on the market for whatever price I like. When insurance runs out I get the deposit back, or the insured gets it when their ship goes pop.
Result:
1. If the insurance runs out, I would make a profit on whatever I sold the insurance for 2. If the ship goes pop, the deposit to cover the payout get paid to the polciy owner. I lose Deposit - selling price
This way cost of say covetor or raven insurance is really cheap, while combat ships is expensive. System becomes entirely player run.
note: insurance fraud hasn't been available for nearly 2 years as the mineral price has been much higher than now.
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