First, go take a look over the 1/15/2008 post in this thread.
Now, several times in that post, Linden Labs appears to take a very anti-interest stance. This is quite curious to me. Interest is usually something considered fairly tame. Precise, but tame.
I happen to be an interest ninja. Not a ninja master, perhaps, but I've done some pretty hard material dealing with interest. I can confirm for you all, after nearly wearing out the decimal point button on my calculator, that interest is not evil.
I think Linden Labs is banking on the idea that the market will not exist if it doesn't have a way to pay itself. That's the only idea I can come up with for a reason to specifically target interest. The line of reasoning must be that if you take away the payout, the money inflow will shrivel up as well.
The question on many people's minds, including my friend Maelstrom, is how much money inflow is leaving SL now. The financial markets brought a lot of cash flow to Second Life, but quantifying that will not be easy. These graphs don't look pretty, though - especially the one about USD spent in Second Life. It's a pretty sharp decline after the gambling ban, and I doubt the banking ban will make things look any prettier when the newest statistics come out.
I don't think Linden Labs will let Second Life die so easily, however. Should incentives be necessary, however, I'll bet LL has a few tricks to play. What I'm wondering is if one of those tricks will be to loosen the Linden Dollar against the USD, and therefore if now would be an opportune time to cash out whatever Lindens can be spared. Thoughts?
Whatever the case, Linden Labs needs to learn a lesson that economists learned centuries ago: markets will not be thwarted. If someone wants to have interest on a loan, they'll have interest on a loan. They might call it something different, or set it up to be sneaky, but it'll happen. Heck, I still get invites to poker tables (I always turn them down, of course). If there are willing buyers (borrowers) and sellers (lenders), the market will find a way to carry on business as it sees fit, no matter how much wrangling it has to do to get there.
Subscribe to:
Post Comments (Atom)
3 comments:
Guardian, forgive my economics for the following, it has been a few years.
The most interesting thing I saw was the graph on US Dollars spent. I reminds me of a marginal product graph in Micro-econ. If i remember right, once the marginal product has hit it's "peak" then the only thing that can turn the company around, or to return it to it's path of entrepeneurialship (is that a word?) is move to a higher technological/innovation level.
Now is the question, does LL have to move to that level or do the residents of SL have to move to that level?
I don't have any answers, it is just an observation.
Feel free to "disavow" anyhting that i have said, even if it makes any sense.
Thanks.
Are you thinking of something like this? It does look like this graph because of its negative parabolic shape.
However, the USD spent is a time series graph, aka data over time, whereas the marginal product graph has units of input on the x-axis. This makes the two graphs very different in nature.
I'm not completely confident that I'm understanding your reference, though. Could you find a picture of the marginal product graph you're thinking of?
The blue line in your picture is what I was thinking of. The US Dollars spent reminded me of the overall shape of that. The tangent is the point of diminishing returns as you show.
I agree that the two graphs are different in nature and that it was a stretch to compare units of input to the time series.
It just had such a nice "shape" I just thought I would toss it out as a thought. :)
Thanks for the clarification.
Post a Comment