The economic effects of ship insurance

[Ged Bligh]

Isildur has said that the huge player economy was designed to function with 3 economic sinks.
At present we effectively only have one (ship loss) which has proved to be insufficient to stimulate the depressed economy & markets.

Ship insurance will effectively halve the only sink we have by reducing the cost of ship loss by 50%. We need more economic sinks not less.

hmm will the amount of ship loss double to compensate?

[EanK]

It'll make more PvP, it will cut out more grind, it will make it so we do have to participate in the economy even more to pump out materials since all you are given is the doubloon rate back. It will stimulate the economy if anything. With more PvP comes the need for more ship materials, more ships, more outfittings, more consumables, more ammo. With less grind, there will be more PvP and the game will be more intended as to how it should have been. Simple as that.

[Spinnaker Sam]

You are way wrong here. While it does reduce the cost of losing by half it also puts new doubloons into the pocket of the person who lost. Those doubloons are then used to buy things to replace what he lost, injecting more money into the system and into the hands of other players. So it lowers the cost of losing (which is a good thing) and increases the amount of goods being sold.

Example:

I buy a 4 durability ship for 70K doubloons. It cost the shipwright 40K to produce at cost.

I am at -70K, the shipwright is at +30K. 40K is removed from the system.

I lose all 4 durability and get 20K from insurance.

I am still -50K from where I started.

So I buy another ship from the same shipwright.

I am now at -120K, the shipwright is at +60K. Now 80K has been removed from the economy.

It did not make the cost of buying a ship change. 80K was still removed from the economy. The only thing that did change was me, the buyer, am out 20K less than I would have without insurance. I recieved 20K in bonus doubloons from my nation. That 20K did not come from the pocket of another player, it is more money being injected into the economy. If the cost of losing a ship is reduced, then more people are likely to risk their ships in PvP, this will increase the demand for goods since people will have more money to spend.

Another benefit to insurance is that people will be less likely to scuttle their old ships. Instead they will take those ship out and get them sunk (either by players or NPCs). Then they will receive insurance for that which gives them a bonus increase that they can then spend on more new ships.

[Ged Bligh]

i see what you mean but injecting money into the economy is the same as removing the economic sink, so yes you are right but i'm not way wrong.

btw i'm in favor of ship insurance but by not replacing it at the same time with eqivalent sinks is bad.

[Mousebot1]

I hope that this actually makes more PvP so we'll have more of a live sea than a dead one.

I still hope they will give XP for losing in some patch soon. It will definetly help me

[Shady McGrady]

I don't know. If everyone has more money in their pockets they will be more apt to spend it instead of saving it. That is the republic economic consensus here in the US. An example of which is the stimulus package they just gave out. Everyone spend it so it pumped more temporary money into the economy. Now let's not debate about real US economics. I just meant to point out that there is a train of thought in economics that says the more money people have the more money they spend and the better for the economy as a whole.

[Xavin]

I don't think we are close to the point where enough money is coming into the economy yet, so I don't think insurance will do anything but help. Wost case some of the bigger shipbuilders have to put more resources into building normal ships instead of bundles, which I think is a good thing. The economy was always intended to be labor restricted, not db restricted, and we haven't seen that yet.

Another benefit to insurance is that people will be less likely to scuttle their old ships. Instead they will take those ship out and get them sunk (either by players or NPCs). Then they will receive insurance for that which gives them a bonus increase that they can then spend on more new ships.

Scuttling a ship will give the insurance payout.

[Duke Suraknar]

Originally Posted by GB

Isildur has said that the huge player economy was designed to function with 3 economic sinks.
At present we effectively only have one (ship loss) which has proved to be insufficient to stimulate the depressed economy & markets.

Ship insurance will effectively halve the only sink we have by reducing the cost of ship loss by 50%. We need more economic sinks not less.

hmm will the amount of ship loss double to compensate?

New flavor of the week or what?

haven't we been discussing how the impact of loss needs to be lowered.

Don't you people get it? The economy and Contention in this game are closely intertwined.

Having both systems in the forefront has been tried and does not work, proof the people quiting this game.

So one has to take second place.

Lets see which one FLS chooses to put on second place, shall we?

I still think we need more economic fountains not sinks.

Besides, Isildur's plan from what I understand in his devlogs, was to make current ship loss Sink 1/3 of what it is today, since the other 2/3rds would be taken by two systems not in place yet.

Insurance lessens the cost by 1/2 still not low enough, therefore we don't need another sink at this point we need more economical fountains.

[Jean Gris]

Agreed, inflation should be about 5000 down on the list of concerns at this point. Maybe they could just add in some grinding missions that anyone can access, my NO doesn't have the faction for either Woes or UF.

[Ged Bligh]

Originally Posted by Duke Suraknar

haven't we been discussing how the impact of loss needs to be lowered.

Don't you people get it? The economy and Contention in this game are closely intertwined.

Having both systems in the forefront has been tried and does not work, proof the people quiting this game.

So one has to take second place.

Lets see which one FLS chooses to put on second place, shall we?

I still think we need more economic fountains not sinks.

Besides, Isildur's plan from what I understand in his devlogs, was to make current ship loss Sink 1/3 of what it is today, since the other 2/3rds would be taken by two systems not in place yet.

Insurance lessens the cost by 1/2 still not low enough, therefore we don't need another sink at this point we need more economical fountains.

The impact of PvP loss will be lowered with ship insurance.
Some may think of it as a fountain others may prefer to think of it as reducing the overall effective sink (less going out compared to what goes in)
Both would be right.

Linking the economic sink solely with PvP contention was a mistake & will never work, droves of players have quit over it. This is the No 1 issue in my opinion.

I can't see the Isildur plan making ship losses to be a 3rd of what they are today, they will still be the main eco-sink in my opinion.
After all this is still primarily & always will be a ship combat game.

The most worrying thing about Isildur's last two devlogs is that they ask more questions than they solve.