It's possible that population differences may exist between the servers which might influence the balance between the supply and demand for goods.

The populations on the server may also spend their money and time (or not spend it) in different ways which can influence behavior.

For example, I do not have ESO+. So, whenever I get excess of materials I sell it because I only have so much space. However, someone with ESO+ is not going to run into any storage challenges so they aren't as likely to be in as much of a hurry to sell. You'll routinely find when threads about wealth come up that many of the people on ESO+ have most of their net worth tied up in the materials they have because they don't bother to sell because it doesn't eat up inventory space for them.

It's similar to real life, I'm not an economist so I don't know the answers, but why is Poland 39% cheaper then it's next door neighbor Germany? And how much would the difference be if each country was isolated and couldn't trade with any other country?

chessalavakia_ESO wrote: »

It's possible that population differences may exist between the servers which might influence the balance between the supply and demand for goods.

The populations on the server may also spend their money and time (or not spend it) in different ways which can influence behavior.

For example, I do not have ESO+. So, whenever I get excess of materials I sell it because I only have so much space. However, someone with ESO+ is not going to run into any storage challenges so they aren't as likely to be in as much of a hurry to sell. You'll routinely find when threads about wealth come up that many of the people on ESO+ have most of their net worth tied up in the materials they have because they don't bother to sell because it doesn't eat up inventory space for them.

But more people selling smaller amount of materials should drive material prices down I say as you have to sell cheap to sell fast.

Now guild trader fees is an major gold sink in ESO, say an trader cost 20 million, that is an 40.000 gold each member down the drain.
If the major trading guilds make an cartel they can agree not to fight each other and therefor limit the biding war to the up coming guilds and trader fees is lower. PC-EU had this before multi bidding but think multi bidding destroyed it.
So much more gold goes to trader fees and is removed from circulation.

Traders fees is else an excellent gold sink as its mostly hit rich traders and is pretty self regulating.

When I first started playing on PC/EU in 2016, prices on PC/EU were much higher than what they were on PC/NA.

Now, 7 years later, it's the opposite. Prices on NA are usually around 2x higher than prices on EU, and for some items, they might be even 10x higher.

Why did this change? I don't know, so I can only speculate. One tantalizing clue is that crown prices are higher on EU. So not only do crowns cost more gold on EU, but that gold has more buying power in terms of materials and other in-game items that gold can be traded for.

So on EU, 1 Dreugh Wax can buy you 10 crowns (20K/wax, 2K/crown), whereas on NA, 1 Dreugh Wax can buy you 40 crowns (40K/wax, 1K/crown).

This suggests to me that there are more people on NA buying crowns with IRL money, and fewer people farming in-game for things, whereas there are fewer people on EU buying crowns with IRL money and more people farming in-game for things.

And this could be a cultural/economic thing. Where people on NA are more likely to open IRL wallets for convenience in-game and less likely to grind for things in-game. One thing that changed since 2016 is the introduction of Crown store gifting, and since then, it's become a disturbingly large industry on NA where the most prominent Crown gifting cartel, TCE, embeds themselves all over with things like partnerships with major guilds. It's really quite disgusting, and I like to think that this is a major contributor to the runaway inflation problem plaguing NA, because I don't see nearly this level of encroachment of crown selling on EU.

zaria wrote: »

Buying crowns for gold does add or remove gold from the economy it just moves it.
Yes they likely move it from an rick player who sit on the money to someone who will use it buying everything from materials to furniture driving up prices.

It adds gold to the circulation, which is what really matters.

For example, I have over 150M on NA, but I never spend it because I have all the mats that I ever need from doing writs and I prefer to earn items through gameplay rather than buying them. That 150M might as well not exist because it's going to sit in my bank until the end of days. Think of it as the carbon in coal. It exists, but it's sequestered away.

Then came crown trading, and a lot of people who would otherwise not buy things with gold suddenly had a reason to pull that gold out of sequestration. One friend of mine has gotten tens of thousands of gold mats through writs and makes an effort to earn things through gameplay (resorting to buying with gold only to finish off, say, the last few pages of an event style). This is someone who basically would not need to buy much from players. But he's spent over 300M on crown gifting on NA. That's gold that, without crown trading, would've been sequestered like my gold and kept out of circulation.

So returning to the analogy of sequestered gold being like coal, Crown trading, effectively, is like a coal power plant, causing people to dig out otherwise-sequestered gold and dumping it into economic circulation.

To clarify, the root cause of inflation is the lack of good repeatable gold sinks in the game.

Let's say you did thirty clothing writs, and you got 20K gold and 8 Dreugh Wax out of them.

If you spend the wax to upgrade a piece of gear, that wax is consumed and gone from the game. If you buy a Dreugh Wax with the 20K gold from another player, that gold may have left your hands, but it's still in the game, in the hands of another player.

So over time, as the materials get consumed and the gold is just passed from player to player, there is an ever-growing discrepancy between the gold in the game and things in the game.

This is the root cause of inflation, and the way for ZOS to fix this is to add repeatable gold sinks. For example, they can put up a NPC vendor that sells Dreugh Wax at 20K each. That will cap the price of wax, but more importantly, when you buy wax from this NPC vendor, your gold disappears instead of just being handed off to another player.

One mitigating factor that helps tamp down inflation is that there are people who effectively take gold out of circulation by accumulating gold but never using it. They act as gold sinks of a sort. And what crown trading has done is to weaken this sequestration effect, and my claim here is that the differing inflation levels on NA and EU is caused in large part by crown trading.