Part 3: Global Economics

An economy in which money flows freely is a healthy economy. An economy in which people are afraid to spend is not.

Suppose you have 5 people in a room, each with 5 dollars and 5 trinkets. If these people decided that the trinkets were worth 1 dollar each and bought and sold them amongst each other they could theoretically do this forever, amassing hundreds of thousands of dollars of sales using just the 25 trinkets and 25 dollars. This could be considered a healthy economy.

Suppose though, that they decided that the trinkets were cheap plastic and only worth 25 cents each. In this situation the money can keep flowing, but it will go much slower, people will be less willing to buy and sell.

Suppose also that the trinkets were valued at 5$ a piece, the money wouldn't move much in this situation either.

Lets make the room more interesting, each 15 minutes five of the one dollar bills are randomly selected by serial number and taken away and each person is given one new dollar. How would this change the activities and selling and buying? What if the same was done with the trinkets and new different trinkets were introduced into the room?

The economics within the Entropia Universe work the same way. In order for any of the professions (hunting, mining, crafting) to truly be "professions" there needs to be buying and selling of the good produced. The more that people are willing to buy and use, the more that will be produced, which means the same 1 PED travels around a lot more before it vanishes into the developers pockets.

For the economics in the game to be "healthy" there needs to be a balance between all the professions and all of the goods produced and consumed. This balance is partially done by the developers themselves who choose the ratios in which certain items and resources are found or looted by players. A large part in the balance though is the "market price" for these same items and resources. The game and the economic balance is always shifting. As one resource or item comes into higher demand or becomes more rare, this in turn increases the price people are willing to pay for it. Since people are willing to pay more for it, then more people are likely to be willing to do the activities required to get these items and then sell for a potential profit. The cycle ends or begins anew when enough people have taken advantage of the increase in price to start producing enough that the demand is satisfied and the price drops back down again.