Okay, time for a pop quiz!
Question: what's worse, a bag that pays out 1M gold, or a bag that pays out 100K gold?
Answer: you can't tell.
You see, what is entirely relevant is the expected outcome, which is basically the probability of all events multiplied against each other. So, let's say that you have a 1M bag that pays out 1% of the time, or a 100K bag that pays out 50% of the time:
1000000 * 0.01 = 10000 expected payout
100000 * 0.50 = 50000 expected payout
So, even though the first bag has a higher maximum payout, it has a much lower expected payout.
The Bag of Win has a maximum payout of 1M gold, but the chance of that payout is vanishingly small -- much, much less than 1%.
Question: If it's so low, how come so many people won 1M gold?
Answer: What we're running into here is perceived probability vs. actual probability. People come running to the boards when they win, and other people read that, and then decide that they win, and they hear about their friend that won 2M in 5 bags...
but this ignores the number of people that bought 10 bags and only ended up with clothing items, or bought it off the marketplace and got less than they paid, so on and so forth.
So: we've taken a look at the payout charts, and the expected gain, and we're pretty sure that this won't have an inflationary effect. You'll hear about people that won 1M gold, but remember for every 1M gold winner there are thousands of people who didn't win that 1M gold.
Question: If the bag isn't worth that much, how come the price is so high in the marketplace?
Answer: We've seen this behavior before. When items first come out, they tend to come out higher than a rational expectation would place them; after a while, they will drop to their actual value. The Bag of Win will drop quite a bit in the marketplace in the next few weeks.
Actually, more on this: whoever is paying 35K for these in the marketplace is nuts!
Question: So how much gold is flowing in and out?
Answer: Hard question to answer, because there is a lot of data to try and aggregate.
But, basically: the 2% marketplace tax generally covers gold generated by DC / commenting / page refreshes / whatnot. (Which reminds me that I would love to make the marketplace tax variable, modifying it up and down as the economy demands -- but that will probably never happen).
You'll note that we've been doing a fair number of gold sinks lately: new store releases, putting CAPTCHA on comments, so on and so forth, which all make less gold enter the system. Also, a number of the events that we have planned will have some pretty compelling gold sinks built into them.
Now, in theory, any amount of gold entering the system is a bad thing. But in reality it all depends on the size of the available money supply. That is: if you add 1M to an economy that has 10M circulating, then you will hurt the economy quite a bit. But if you add 1M to an economy that has 10B, then it is really a drop in the bucket, and the Gaia economy is much larger than that. If we sold this item indefinitely, and it sold well, then it would hurt the economy: you can't add gold indefinitely. But this is an extremely limited run item, and the total amount of gold added to the economy will be a fraction of a percentage of the total money supply.
Also note that there is some nominal payout from Cash Shop purchases anyway. You could, if you were incredibly lazy and short-sighted, buy a Cash Shop item and immediately turn around and sell it to the store. However, it's better for you to sell it on the marketplace -- you'll get a better price -- and when treated that way it is a deflationary force (more goods, same amount of money). However, popular Cash Shop items also drive more marketplace transactions, which means more money gets taken out by the 2% tax... it's all complicated and interwoven, but on the whole the Cash Shop has been a force for deflation.
Question: If this isn't causing inflation how come the price of (some item) jumped yesterday?
Answer: I think much of it is irrational. The prices for Bags of Win is too high, and the prices of some other coveted, expensive items have also increased, but they are above what they should be -- given the total percentage of money influx, there is no way that you should be seeing 20% increases in price.
This is an interesting question to me -- if someone has some particularly good examples of items that seemed to increase overnight, let me know in the comments. I would like to find out if it is an AI manipulation.
Without price controls, we can't/won't prevent irrational behavior. Some prices will increase for no good reason. However, I expect prices to dampen out once the furor dies out.
Question: You pulled the bags!
Answer: Is that a question?
But, yes, we pulled the bags. A couple of factors went in this decision:
- the bag was always meant to a limited release item
- sales of the bag were somewhat higher than projected
- negative community reaction
- marketplace fluctuations were higher than we like
Negative community reaction was a definite factor. Which is not to say that we won't stay the course if we think something is the right thing to do (i.e., the 2% marketplace tax), but we definitely pay attention to community reaction.
Marketplace fluctuations are something not easily predictable, since it depends on you. For example: I've seen the payoff charts, and there is no way the bag should be selling at 40k; that value is many multiples of the expected payoff. Similarly: the amount of gold added to the economy should not have caused drastic prices in some of the items mentioned in the comments, given the amount of gold and the existing size of the economy, but it did.
There are some aspects to the bags that I think were favorable: for example, the idea that someone new to the site could, through luck, become rich. A lottery is one way of accomplishing this, but I think we would structure it so that it is a net gold sink. (i.e., if you have to pay 100g to win 500k, then your chances of winning must be less than 1 in 5,000).
Question: No, really, Staff of Angels shot up.
Answer: I have a 9am meeting tomorrow, and I've spent a couple of hours at a SQL prompt at 3 in the morning. Sigh. Anyway, here's the price graph for Staff of Angels:
The dots are the average sale price, and the red line is the number of bid cancels or creations, scaled to fit within the same range as the price. Some really interesting things about this:
- other items do not have such a marked inflationary effect
- there are natural price fluctuations over time, with the most marked increase being today
- most of the people that bid high hadn't won large amounts with a Bag of Win
- many of the bidders had purchased a Staff of Angels recently -- i.e., the purchases seemed to be speculation and not for personal use
All of this is not conclusive (since I didn't do a second order analysis), but it does seem that this is a temporary run on the market, and will dampen out shortly. I'll look at it more this weekend.
I realize that this is a sensitive issue, and one that a lot of people in the community are worried about; please place your questions / comments below.
I don't really get why people are making a big deal about this. 
Community Member
no matter what happens, it seems things like these are always going to be released and cause issues on gaia, its the same when the infinity hats came out, the omg boxes and even when the additional mc's were added.
thanks for addressing the main issues.