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Runescape economics

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2/12/2016 8:00:38 PM
Posted: 3 years ago
About a year ago, Runescape introduced something called a bond. What this means is that a player can pay Runescape six dollars to receive a tradable item that can be redeemed for 14 days of membership. This bond can then be traded to other players for a profit. This serves two purposes: it allows people to "buy" in-game currency with real money without inflating the money supply, as well as lets people pay for their membership with in-game resources. In order to prevent people from manipulating the price of these bonds, Runescape made it so bonds cannot be resold without paying a "tax" equal to 10 percent of the bond's market value. I have two questions. First, it seems like the price of Bonds should always be increasing, because the average Runescape player is continually getting richer (there's more and more gold coins chasing roughly the same number of bonds in relation to the number of players wanting to purchase them). Yet, this is not happening. For a long time the price of bonds was steadily increasing, but then suddenly their price started to fall. Graph of their price: Does anyone have any idea as to why this might be happening? Second, I'd like to know what the effect of the 10 percent resale tax is likely to have. My theory is that it makes the price of bonds more unstable over the short term. If players could freely buy and sell bonds, then a dip in the price would prompt merchants to buy them so they could sell them later at a profit (assuming that the dip was merely temporary). This would mean that the short term price would more accurately reflect the "essential" price trend. Since it's very difficult to make a profit merchanting bonds, the only people who buy bonds are players looking to consume the bonds themselves.