Gaming Commerce

A Commerce Journey — Episode 17 . Real economics, measured against live Hypixel Skyblock Bazaar data. You bought a Super Compactor. It cost 217,051 coins, it took a while to afford, and it sits in your minion turning raw material into enchanted material. Good purchase. Then you add a second one, so the enchanted material becomes blocks. And this is where a great many players, including me for a long stretch, quietly set money on fire. 1️⃣ The idea A sunk cost is money already spent that you cannot get back. The rule about it is short: it should have no influence on what you do next. Only future costs and future benefits belong in a decision. Everybody agrees with this when it is stated abstractly and almost nobody follows it, because it feels like waste. You paid for the thing, so you should use the thing. That instinct is the fallacy. It is worth being precise about why the instinct is wrong rather than merely inconvenient. The coins are gone in both ...

A Commerce Journey — Episode 16 . Real economics, measured against live Hypixel Skyblock Bazaar data. The production possibility frontier is the first diagram in most economics courses. Two goods on two axes, a curve showing every combination you could produce, and the whole point of the picture is that the curve bends. The bend carries the lesson. A straight line would mean giving up the same amount of one good for each extra unit of the other, forever. A curve means the trade gets worse the further you push, which is called increasing opportunity cost and is treated as a fact about the world. Skyblock lets you draw a real one. When I did, it came out mostly straight, and working out why took me somewhere more interesting than the diagram. 1️⃣ Why the textbook curve bends The standard explanation is about resources being unequally suited to different jobs. A country moving from making butter to making guns first shifts the workers and land that were bad...

A Commerce Journey — Episode 15 . Real economics, measured against live Hypixel Skyblock Bazaar data. Comparative advantage is the least intuitive idea in economics and the one that has held up best. It says two people both gain from trading even when one of them is better at everything, and that the worse player is still worth trading with. It is true, and Skyblock provides a clean way to check it. It is also, on the numbers below, mostly unavailable to the players it is supposed to help, and the reason is a cost the textbook version leaves out entirely. 1️⃣ The idea, quickly Two farmers. Ana is better at everything. In an hour she grows 3,200 pumpkin or 2,400 wheat. Ben in the same hour grows 800 pumpkin or 1,200 wheat. Ana beats Ben at both crops, so the obvious conclusion is that she has nothing to gain from him. That conclusion is wrong, and seeing why is the whole point. Ask what each pumpkin costs its grower, measured in the wheat they gave up t...

A Commerce Journey — Episode 14 . Real economics, measured against live Hypixel Skyblock Bazaar data. Vertical integration is the idea that you should own the steps above and below you. Do not buy the parts, make the parts. Do not sell through a middleman, sell direct. Every margin someone else was taking becomes yours. It is the most intuitive strategy in business and it has a long history of not working. Skyblock lets you test it properly, because the chain is short, every step is priced, and nothing is hidden. 1️⃣ The test Pick a chain with three tiers. Raw diamond, enchanted diamond, enchanted diamond block, where each tier is 160 of the one below. There are three ways to end up holding one block. Buy the block outright. Buy 160 enchanted diamond and compress them once. Or buy 25,600 raw diamond and compress twice, which is the fully integrated version where you own every step of the process. If the market were efficient these three would cost abou...