Inflation usually occurs because more gold is coming into the player economy than which is leaving. Gold enters the economy by drops from mobs and from quest rewards. It leaves the economy through payments to NPCs - gear repairs, griffon taxis, basic consumables, training expenses, auction house deposits and fees, and obvious gold drains like Epic Flying skill and Cenarion War Hippogryphs. Players paying money to other players doesn't remove it from the economy, it simply shuffles it around.
So here I am, working my way to Exalted with the Cenarion Circle. Amongst other things, I'm buying various items off the AH and handing them in for Cenarion Logistic Badges .. and it got me thinking that this is also making inflation worse.
I'm removing items from the economy, but the gold I pay out simply gets shuffled to another player. Consequently, while the amount of gold available in the economy has remained the same (ie. not increased), my actions are contributing to making things to spend that gold on more scarce. Which of course means higher prices for those things (ie. inflation).
So, while gold drains should be designed into the game to combat inflation, any item drains should also be carefully and cautiously planned given their effect on the economy. This is particularly important if your game includes item breakage for purposes of stimulating an active crafting ecosystem (not a problem in WoW, but often considered theoretically).
This has also set me thinking that perhaps NPCs could be set up to sell many more items, things which are normally farmed by players and sold on the auction house, things which players need as quest hand ins. A really smart system would have NPCs selling items at a dynamic price competitively undercutting the auction house, but in relatively limited supply. It would have to be a limited supply, otherwise no one would ever buy off the auction house, not ever. Say maybe a max of 2-5 units available, spawning every hour or so.
Now, what will likely happen is that the limited supply would be bought and immediately flipped on to market for a modest margin – the players that actually needs the item for crafting/questing purposes would probably not get the chance to buy it from the NPC. Since there are so many items that would need to be supplied by NPCs like this there would need to be multiple NPCs, each selling (limited supplies of) different items. I would fully expect some players would simply ride around from NPC to NPC, buying up stocks as they spawn, keeping themselves busy that way, flipping the lot onto the market.
While some players will grumble at the NPC farming, they are actually performing a service – they are doing all the tedious running about and gathering and consolidating all the stock into one convenient market place. Only fair then that they extract a modest fee from this process.
The neat thing about this process is that while it is actually a gold drain, the players buying from the NPC would actually be making a profit, and everyone else is benefiting from suppressed inflation and increased supply. Much nicer than slugging all players with a repair tax, or 5,000 gold flying lessons, and so on – all sources of player angst and whines.
Also, if the quantity of the limited stocks that spawn is randomised, as well as the respawn timer, then it's easy to gently fudge the random number generator and thus adjust the supply as the economy demands. During times of peak demand for specific items an increase in supply will keep prices reasonable as well as drain more gold faster. Later, as the server population moves on to other activities, the supply of those items can be scaled back to reduce the surplus from the market. It should be a simple matter of tracking how many of the items are churned through the market and how many are being handed in for quests.
