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Neopia's Fill in the Blank News Source | 25th day of Running, Yr 21
The Neopian Times Week 127 > Articles > The Economics of War

The Economics of War

by rimrocka13

BATTLEDOME - War time in Neopia is similar to war time in the real world, in that both cases results in a change in the economy. However there are major differences for one very simple reason. In a real war the economy is affected by those who do not participate in war. In Neopia, the larger part of the population participates in the war because, let's face it, the Battledome is one of the greatest aspects of the whole game. Nonetheless, the economy is still changed by rumors or news of war.

Weapons Prices: Inflation

It is obvious to most people that a Neopian war changes the prices in weapons. Weapons' prices begin to rise. To some battlers, the thought of selling when everyone needs it incurs a large profit. However, the selling of one Battledome item usually leads to the need for buying another to replace it. The idea of selling and getting more Neopoints for your Battledome weapon is correct. But some people tend to forget it costs more to buy a new weapon during war, as well. At the same time the opposite occurs. Some people save a lot more to buy weapons in times of war because they plan for inflation. They forget that selling their current weapon will result in more profit.

The idea is that if you plan to sell one weapon and replace it with another. You cannot forget that in both cases, the weapons will cost or sell for more during war. Do not become short-sighted and see that your weapon will sell for more, while forgetting that you must pay more for a new weapon.

Healing Potions

It is widely believed that healing potions will rise in price, just like weapons. However ,with healing potions it is much more different. Healing potions do not increase by 100K or even 10K because healing potions are given out at the Healing Springs. Weapons are not as quickly generated and restocked in Neopian shops. Another healing potion appears from the Healing Springs and put out on to the market every two seconds. This causes the price to stabilize. The thousands being generated and the demand for them sort of cancel each other out. So the healing potions don't really increase in price.

Why are healing potions needed? Most people think to themselves, "Well, I don't need healing potions, I could just fight Punchbag Bob and heal myself with a scorchstone or a healing ability". That works very well when there is no war. But in times of war all other 1-Player Battledome challengers are disabled. So that means no more healing from Punchbag Bob.

The price of healing potions remain stable, usually. In some cases so many healing potions are stockpiled ahead of time (because some people believe it will rise in price) that healing potions aren't needed by the masses. However, again, due to the huge number of healing potions and the huge number of Neopians, healing potions don't really escalate or deflate in price.

Stockpiling

A very risky move in times of war is stockpiling. Usually stockpiling occurs while war talk is just rumors and not official yet. Basically, stockpiling is the idea of collecting a large amount of a few items in hopes that they will rise in price due to war. Now, I'm not saying buy every last one of an existing item, because that is self-inflation and it is against Neopets rules. I'm talking about collecting a large sum of one item and selling it when the price is raised, naturally. Such items that commonly skyrocket in the price in times of war are codestones, faeries, snowballs, muffins and other cheap one time use items that pack a lot of damage.

In writing this, it may cause massive inflation of those above mentioned items. However, I must warn, stockpiling is a risky game. It is always a gamble because there is no guarantee that, that item will rise in price. If the item does in fact rise in price, and you have some stocked away it is a nice profit.

So why do these items rise in price exactly? It's simple, they are in demand. Prices of things rise when they are in greater need. The one-time use weapons are especially in greater demand because they disappear after one use so there is always a need to replace them.

Deflation of Everything Else

Now this aspect of war doesn't always hold true. In theory, this is what usually occurs. When there is talk of war people start saving for weapons and training. This causes a recession. A recession is basically when the economy is hurt because no one is buying anything so no Neopoints are in circulation. Because all the Neopoints are going into training and weapon purchases, the cost of other nonessential items begin to decrease. Furniture, toys, gardening, gifts, they all begin to plummet in price. This is caused by the lackluster of sales in that category. When an item sits in a shop for a long period of time, the owner usually lowers the price, if this process occurs over and over again, the price drops dramatically.

Deflation After War

Weapons prices after the official end of war usually drop slightly. It is never enough to make weapons insanely low in price. I am not suggesting that Hidden Tower items will go to 500K, I am merely suggesting, some weapons may drop 100K or so because there is a rush to get rid of the weapons. For everyday battlers, they hold on to their weapons. For people who only battle in war and has no need for weapons, they are the ones who cause the prices of weapons to lower slightly.

Stabilizing

A few weeks after war and the prices of everything begin to settle. The inflated items deflate and the deflated items inflate. This is caused by the need to get rid of inflated items and a larger desire for those items that were not essential during war.

So in summary, war changes how the economy works in Neopia. Prices fall and rise based on what the people believe will happen. Some points in this article might not hold true during the next war but it is a generalization of all wars. If there are any questions or comments you could Neomail me, rimrocka13.

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