RavenBlog

Real-world economics

Real-world economics in action! Goozex, a video game trading service that's now pretty much defunct, ran like this: a game has a value in 'points'. You can offer a game for its point value, or you can request a game for its point value. When there is both an offer and a request, the two are matched up, the points change hands, and the requester is also charged a "token", which costs a dollar. The seller pays for the shipping to the buyer, and ships the game. Also you can buy points.

For a while this model worked pretty well, games traded regularly, people were happy with it. Gradually, the request queues got longer, and there were no dangling offers to be found. And in talking about this, and what could cause it to have collapsed like that, I think I found the answer. And it's kind of interesting.

Imagine on a small scale, let's say there are 6 people. One of them buys 5000 points and 5 tokens. Each game costs 1000 points. The other 5 people all have a game they want to trade, so they sell their games to the first person. Now they each have 1000 points and the first person has no points and 5 games. Now in the system is 5000 points worth of demand, and zero supply. The guy who bought the games finishes them, decides to keep one, and sell the others. Now there's 5000 points worth of demand, and 4000 points of supply. The other users buy tokens so they can spend their points, and one of them buys a thousand points too. That one buys two of the games, two of the others buy a game, and two are left with their 1000 points and are in a queue. Now the original user has 4000 points, two users have 1000 points each, and there's no supply again.

This sort of trading can go on indefinitely, the point is, the demand never ever goes down - there will always be 6000 points worth of demand, or more if someone buys some points again. Supply can go up if people buy games for money and sell them for points, down when people make their trades, or stay the same when people make trades and then want to resell the game back in again. But anyone who has points won't want to buy games for money and sell them for points - they want to use their points to get their game, obviously, because cash is good for other things but points aren't. Demand can only ever go up, short of people dying with a points balance and no request queue. So it's inevitable, with this design, that the Goozex economy would fail. The prices were fixed, at first, but now they freed them up which has resulted in massive inflation as the prices go up to try to compensate for more demand than supply, but since there is essentially infinite demand, inflation can't fix it - all it does is make people mistrustful of the system so they try to cash out, making the problem even worse.

The funny thing is they could have solved this problem at the beginning, if they'd thought it through and realized this would happen - rather than charging a dollar for a trade token, they could have just charged a percentage of the points involved in a trade. That way the demand and supply would both 'soften' when a trade happens, preventing their current situation where there is literally no supply and nobody wants to provide any supply - it doesn't matter how many points you can get for your game if there's nothing you can spend points on.

On the other hand, maybe with a points-only system a different problem would arise - people would try to trade in games for more points than they could buy for the same amount of cash, and would refuse to pay cash for points because they would perceive that they could get a better deal. However, this problem would resolve itself - an oversupply of cheap games would reduce their point price (before trades are made since not enough people are buying those games for points) until that game's point value corresponds to the cash value of buying that many points. So in the end there would be no advantage to trading for points rather than buying them, unless you were trading games people actually want, in which case the system is working as intended!

There might be a problem persuading people that buying points is ever a good idea though, when they could just buy the game they want in the first place for the same amount of money. Tokens are a clever way of sidestepping that psychological issue. Alternatively, if the point value (including the transaction 'tax') is always slightly lower than the cash value of the game, then it would make sense to buy points if you don't have any, while still making sense to trade games in. [20:05] [comments]

arbitrary program

I just noticed a really obviously stupid thing about operating system design, mostly Windows but partly true in others as well. There's the concept of the "administrator account", that enables installing software, to prevent things from secretly installing malicious software. But here's the problem - every time we intentionally install something, we give someone's arbitrary program the permission to run as an administrator.

So basically every piece of software we ever use, at the very first point in its life cycle has administrator privilege. At that point, what good is that barrier even doing? I suppose it's useful for preventing buffer overflows and things from giving system-invading access, but those things are a tiny minority of infections - the usual vector is people installing something that has a malicious thing piggybacked on it. That malicious thing now has administrator privileges if it wants them, because it can grant itself them during the install!

It would make much more sense to have a single operating-system-owned "installer" program, and only install packages, globs of files with coded installation instructions. There would still be an annoying "are you sure you want to install this?" popup, and there would still be the possibility of installing malicious software that you might run at the user level, but there would only be an "are you sure you want to give an arbitrary thing administrator privileges?" warning if the installation package was specifically requesting that. The installer program could also have a separate warning for "are you sure you want to install a thing that will run at startup / immediately?" which would vastly reduce the risk of malicious software infections, since there isn't a lot malicious software can do if you have to actively elect to run it every time.

As an added bonus, this would warn you about Adobe and Sun's auto-updaters being jerks before you installed them, too. [17:24] [comments]

Facebook fiasco

Followup to my Facebook fiasco - I have now got back in by giving it Jessica's phone number. Somehow that is valid confirmation that I am me, while actually valid photo ID went completely ignored for three days. Well played, Facebook. (I then immediately deleted the phone number from my account because fuck you Facebook I don't want a phone number on my account, let alone someone else's phone number!) [14:56] [comments]

a second time

That's pretty messed up - a few days ago Facebook decided to accuse me of not being a real person, and challenged me to identify 5 friends from randomly selected pictures. That would be easier if half the pictures weren't indistinguishable baby pictures, and if Facebook hadn't aggressively encouraged me to 'friend' everyone I've ever met in the slightest capacity many of whom I have no idea what they look like today since I last saw them 20 years ago, but I managed to barely defeat the challenge, and regained access to the account.

24 hours later it decides to accuse me of not being real again, and this time it wants a phone number to confirm that I'm a person. So I give it a phone number. "We're going to send a text now, okay?" Well, no, that phone number can't receive a text, and I don't have one that does. "In that case just scan and send us some government-issued photo ID!"

What the hell? This isn't a high-security dealy like a bank account, it's Facebook, and there wasn't any valid reason for the accusation in the first place - the only reasons I can conceive of for this happening are either that I have a funny name that has matched some new no-fake-names algorithm, or someone has decided to report my account as a fake and Facebook just arbitrarily takes someone's word about such things a second time even after the accusee has jumped through hoops to show the accusation to be false less than a day earlier.

But it's worse than that, because Facebook has become such a ubiquitous thing that many sites have a "log in using Facebook" button - so Facebook deciding to randomly cut you off from your account isn't just cutting you off from their service, they're cutting you off from an unknown number of other services too.

And it's worse than that too, because the remedy "send us photo ID", which I'm willing and able to do because they do say "obscure any parts that aren't relevant", and I have a scanner and am okay with Photoshop (what the hell would my mother in law do with this situation?) ... this remedy isn't actually processed in a timely manner, so even if you're willing and able to jump through hoops you're still cut off from whatever accounts you use Facebook to log in to for an arbitrary amount of time.

Yet another reason why I wish "log in using Facebook" buttons were replaced with "log in using singlepassword.com", a hypothetical nonexistent service for which you would create an account as anonymous as you like and use it to log in to any other accounts. [16:43] [comments]