Friday, September 24, 2010

Opportunity Cost - My perpetual battle against idiocy

Opportunity cost seems to be one of those concepts that pops up in EVE frequently, but people really have comprehension of it at all.  In the last few months I've had to describe

1. How datacores you research yourself are not going to save you any significant isk over ones purchased from market.

2. Why asking inventors in the Uni to offer t2 ships at cost to other uni members is the equivalent of just asking them to give us a few billion isk each year.

3. Why having us build ships at cost for members is actually the equivalent of a small isk donation to everyone who uses the program.

Now, we are aware of the opportunity cost of some programs (#3) and accept it, but some people really don't understand the concept.  I've had to explain it so many times (often to the same people repeatedly) that I really want to beat my head against a wall sometimes.  As someone involved in the industrial side of EVE, people who have no understanding of opportunity cost are the bane of my existence. As someone who plays the market in EVE, it can lead to huge profits when people don't understand.


  1. Sounds like you need to direct some peeps to the local community college for an Econ 101.

    Don't worry, though you should be meeting these people irl all the time. I don't bother to tell anyone that I am an IT person because I know that the next time they have a problem they'll be on the phone asking for my "free" advice. Lets see, I can hang out with my kids, play Eve or help you?

    I hate to hang up on people, makes me feel like a bad person. (Ok, not really)

  2. Personally I don't explain opportunity cost to anyone anymore. I simply let them sell their manufactured T1 items for less than the mineral values, and continued to undercut each other. When the price is low enough, I simply buy up their stock, and reprocess it.