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Thread Statistics | Show CCP posts - 1 post(s) |

Jessica Danikov
Clan Shadow Wolf Fatal Ascension
424
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Posted - 2014.12.03 20:48:08 -
[1] - Quote
Only took CCP 3 months to say anything about this, despite repeated prodding. |

Jessica Danikov
Clan Shadow Wolf Fatal Ascension
424
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Posted - 2014.12.03 20:51:16 -
[2] - Quote
X ATM092 wrote:I agree with any reductions to the huge isk faucet that is insurance.
Anyone who doesn't appreciate that Insurance is a huge ISK faucet doesn't deserve to comment on insurance. |

Jessica Danikov
Clan Shadow Wolf Fatal Ascension
425
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Posted - 2014.12.04 13:24:38 -
[3] - Quote
Lucius Uta wrote:I wish all the people who claim that insurance is an ISK faucet would explain how you can actually earn money using insurance. I must be doing something wrong since payout costs for me (even with platinum insurance) are always lower than the hull's value. Yes I know it makes me pay less for the ship than it's actually worth, but I could accomplish similar results with buy orders, so might as well remove those too.
We're talking about the EVE-wide economy, not your individual wallet. When you buy a ship, all you're doing is trading currency for a hull (a assembly of raw components). Very little currency is destroyed (only market fees and such) in the process; none if you do a direct trade.
Insurance purchases are an ISK sink: that money spent goes nowhere and is removed from the universe.
Insurance payouts are an ISK faucet: the money comes from nowhere and is magic'd into existence. However, due to the fact the process is intrinsically tied to the destruction of a hull and tied to hull value indices, you could also think of it as a mineral -> ISK conversion process. By paying upfront with insurance, you make that conversion more efficient. However, with regards to ISK alone, it's still a faucet.
Overall, insurance payouts are far greater than purchases, so the net effect of both makes insurance an ISK faucet.
If you look at the Economics presentation at FanFest, they usually cover Faucets and Sinks and you can see just how big a faucet insurance payouts are (IIRC it's in the top 5, but one of the smaller 5). |

Jessica Danikov
Clan Shadow Wolf Fatal Ascension
425
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Posted - 2014.12.05 12:14:45 -
[4] - Quote
We could get rid of ISK payouts entirely and have wrecks drop more than just rig salvage, but actual components based on insurance level (which really tickles as, if you lose, the benefits of said insurance remains on the field, which is a nice, risky cost/benefit choice). |

Jessica Danikov
Clan Shadow Wolf Fatal Ascension
425
|
Posted - 2014.12.05 13:01:42 -
[5] - Quote
Lucius Uta wrote:Good explanations from Senyu and Jessica, but can ISK caused from insurance really cause inflation when money added to the economy from insurance payouts doesn't come without coverage, but it's being tied to a value of another item (which itself has coverage)? Won't it just reduce the effective value of the said item? From what I know, inflation is caused when money is printed without coverage. Or it will just cause smaller inflation than it would in case the supply of ships were endless?
If anything, this amplifies the inflation-like effects of insurance. Not only are you destroying commodities, you're creating new currency, unlike, say, bounty payouts that purely generate ISK. ISK's value is derived relative to its purchasing power of mineral-based goods (PLEX is entirely irrelevant as it merely facilitates the movement of ISK), so if the supply of ships were endless, the entire system would be devalued. The whole point is that both ISK and ships are limited in rate of supply. |
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