wuhad: number crunching on group tier rate bonuses

in the past i did some number crunching to demonstrate that regressive tier leveraging was more advantageous than group donations. this set of data is to demonstrates the advantage for higher tier player to compound the benefits of regressive tier with the group land bonus. higher tier rates benefit disproportionally in comparison to lower tiers in terms of value for their money because the 10% group land bonus is compounded on exponentially growing land allowance bonuses of the regressive tier system. i used the the lowest tier as the base rate, though any arbitrary rate would show the same pattern

land traders use the inverted relationship to the one i have used here. land traders use USD/m2 in monthly fee costs because it needs to be accounted for in the margin in pricing land. for traders, the incentive is in terms of lowering operating cost. however for most players, it's truly an issue of more value for your money. this data is presented in those terms because most players think in terms of how much land they can get for their money, not how much money it costs for their land.

finally, it is not my purpose in this instance to state whether this is right or wrong. this is a LL sanctioned system and i encourage everyone to take advantage of it while it is still there. i simply want to demonstrate the disproportionate advantage of the group bonus compounded with the regressive tier bonus for the record.

You and I would make a good team. You have the mad excel skills, I know how to spell cumulative

spellcheck destroyed my english.

You have proven beyond doubt that if you do enough multiplication and division, you can create a bar chart with a really big bar on one side, and a really small bar on the other side.

The gist of your argument seems to be that the group tier bonus benefits large land holders disproportionately. Hogwash! A 10% flat rate bonus benefits everyone exactly the same - 10%. The group tier lets you get 10% more land than you could get otherwise. It isn't regressive at all; EVERYONE gets the same 10%.

Your spreadsheet doesn't reflect the 9.95 per month for the base account and the 512 m2 you get for that, or the additional 19.90 for the other two accounts (and the additional 1024 m2). I mention this only to point out that your analysis is not thorough, its merely convoluted.

Your argument is similar to the argument that a 10% tax cut across the board unfairly favors the rich, because their taxes go down by more dollars than a middle class person.

Another example would be a sales tax reduction benefits somebody who buys an expensive car more than somebody who buys a cheap car. Does that make a flat sales tax of 6% reduced to 5% a "regressive tax cut"?

If you are 40 and your daughter is 20, she is half your age. When she is 40, you will be 60, two thirds your age. So can we create a chart that proves that you are aging at different rates?

Large land owners get more extra m2 from the 10% group bonus than small land owners. That's because large land owners own more land, not because a flat 10% is regressive!

In fact, the 10% group bonus is available to everyone! You can purchase three premium accounts for $9.95 per month each, or $29.85 per month, and start benefiting from the group tier bonus. You need to spend $205 per month to get the top tier bonus, but only $30 per month to get the group bonus. That's targeting the rich?

If you want to champion the cause of the ordinary player, agitate for a flattening of the tier rate curve. THAT is the HUGELY regressive part.

Even though I think your reasoning is invalid, I agree that the 10% group bonus should be done away with. I just have different reasons.

Buster

buster,
because the group land bonus is compunded on the regressive tier billing system

in crelation to any arbitrary rate of amount of land given per dollar, in this case using the lowest tier as the base,

the lowest tier gets 10% more land for every dollar they spend
the highest tier gets 32% more land for every dollar they spend

convoluting the calculations with the cost of two basic accounts and the premium 512 land over a predetermined period of time will only give similar results with a lot more math.

my arguement is absolutely not the same as the tax cut in rl. look again. i am asserting that the tier system is set up as an incentive to get people to get more land by giving them greater (a bonus) land allowance per dollar spent. when the 10% group bonus is applied to that, it compounds upon the previous bonus.

btw, the tier system is clearly regressive. i think you have the two bonuses confused.

So then your real issue is with the tier discounts. 10% bonus only grows because the amount of land that you can get per dollar increases at a non-linear rate. If the land fee were based on a straight (landheld*rate = payment) then the 10% bonus would be just that, 10%.

Thanks for posting these data - the interesting part about this to me is the tier discount structure, which amplifies the benefit of the group bonus through compounding.

I can understand a regressive discount curve for bulk purchasers but I don't understand the double dip - see the inflection point at 8192 m2 tier level. Its like two different curves, one pasted onto the other. A constant rate would be a better incentive to landholders between 8192 and a full sim than the present structure.

And what about multiple sims? Why shouldn't there be a compounding of owning multiple sims with a similar stair-step discount structure up to hosting your own SL server? You'd think they would want to out-source some real operating costs at some point to in-world "partners"...

Finally, how about some cumulative benefits to cooperating groups in-world? Why shouldn't they layer onto the present group bonus progressively higher bonus rates for groups cooperating with one another? This would seem to be the other side of the "eliminate group bonus because its not working" argument. Apparently the Lindens can afford to allocate additional prims for good behavior in this manner...

Other thoughts?

If a person in the lowest tier contributes land to a group, the group can get 10% more land.

If a person in the highest tier contributes land to a group, the group can get 10% more land.

How do you get 32%?

I don't view the tier structure as a "bonus", its actually a "quantity discount". I think its far too regressive, and I think that the big increments are terrible. I hate paying for "unused tier". THAT's regressive! To use 2/3 of a sim, I pay the same amount as someone using one whole sim. That's fair?

If you want to focus the 10% group bonus to reduce the subsidy to large land barons without removing the incentive for group projects, you could do things like limit the 10% bonus to 65536 m2, per group or per group member or whatever. Or you could limit the 10% bonus to land in the same sim.

Although I would wonder why a resident would be advocating that. Could it be that there are residents who agitate for changes as a way of getting at people they don't like? Hmmm. Can't imagine that.

Buster

because you and i both know that it is not commonly used by a multitude donating tier, but by one player leveraging the regressive tier for the entire group and then compounding the bonus, or by land barons with two alts.you think of it as a quantity discount, but the big increments, and all or nothing tier brackets makes it more like a bonus, or "better value." it's like bulk buying at costco where you have to buy 4 of something for the price of 3 rather than just being able to 2 as you actually needed. tier up, and get twice the bang for your buck. i did think of what you are sayin and after a previous post, i worked out how i would like to see the tier system work. i've attached the table.
actually, i'm just presenting the numbers because some people continue to deny that there is a disproportionate benefit. there definitely is, i've demonstrated it, and i exploit it.

the real problem with it is that it's complicated to use and the lower incentive at low tiers vis a vis the cost of buying two alt accounts means it's a benefit not realized too often by low tier players and relatively new players. so why not just give the bonus to everyone?is that a reference to to linden favoritism and the crusade against aimee's panties, now? wrong thread...

I think, "I'm going to go down to Costco and buy a large amount and get a lower price per unit". Quantity discount, not bonus. And you are right, the tier jumps do work like bizarre bulk packaging. Its perverted to have "bulk packaging" for bytes. Truly bizarre.

I agree with the idea behind your table, but I would simplify it and have maybe two tiers, three at the most, such that you achieve the top tier at 32768.

Making the tier table incremental would initially cut LL revenue a little bit, becuase everybody with "unusued tier" would pay a little less. In the long run, I think it would average out because other people would add onto their land more readily. They might not now because they can't add 512 to 4096, they can only add 4096 to 4096. In my land dealings, I see that stopping people all the time. I also see people releasing 16 or 32 m2 to stay under tier, and then end up with a big griefer billboard in their face. All around, the big tier jumps are destructive, and the curve is too steep.



I continue to deny that there is a "disporportionate" benefit.

fact: 10 * 1.1 < 20 * 1.1

reason: 20 is bigger than 10. (Not because 1.1 is somehow disporportionate.)


no, I was referring to the crusade against crusaders. Nothing whatever to do with aimee's panties.

aimee rocks.

Buster

I disagree. It is incentive to get a customer to spend more money. The perception of a better value, at an increased overall expense. win/win

I wouldn't call that a true incentive as much as a penalty - what would you do if your credit card company calculated finance charges based upon your full credit limit amount rather than the actual balance in any month that you ran an outstanding balance?

Thats essentially what peak usage tiers in SL do to the average user. Its not a long-term viable business model really, more indicative of a cash-starved company than a growth opportunity.

You misunderstood the intent of my post. I was refering to the per meter discount offered to those who have a higher tier as a 'bulk incentive'. I am not at all opposed to finer granularity in the tier structure or a system such as Jauani proposed.

As far as being charged for peak usage, I see no other way for LL to implement a charge for land used.

I like your billing brackets idea, but I think if used it could be presented in a simpler way. I think rates that small will confuse people a great deal. It would probably work better just having each teir be a rate that gets smaller as you start going up the teir levels. Instead of having an initial cost, just use a meter2 / US$ fee. Like if you are under 512, you get somethng like 128 meters / US$1. Then if you are at the highest teir you get something like 300 meters / US$1.

As for the group bonus. I know there are groups out there legitimately with 3 people or more doing their projects. I'm not really sure how 3 people is automatically worth 10% more than 2 or 1 person however. I think it depends on the skill and time spent by the people. I mean wasn't GOM a two person operation, or was there more I didn't know about? The one benefit I see in it, is that it is an incentive for people to buy alts.

What you quoted was my view that the tier curve is a "discount", while the 10% for groups is a "bonus". The example of Costco *is* an incentive to get a customer to spend more money, as you say, and its a "discount", not a "bonus" in my mind. A bonus would be "buy two, get one free".

bonus = get extra
discount = pay less

Its just semantics, probably not worth nitpicking over, but I think these are two different concepts and its a bit of a misdirection to lump them together and attribute the sum to just one of them. I think its a false comparison.

I agree with Dark also that the schedule could be simpler.

Buster

Maybe a clearer alternative would be to charge for "actual" computing resource usage instead of "reserved" use? Maybe it makes sense to oversell prims against a 10% or 20% buffer per sim in a way that makes more efficient use of hw and maximizes revenue based on queing theory?

Maybe even a volume-weighted average or a daily average computed on a monthly basis would be a more accurate (and customer pleasing) mechanism for tier charges than a 30-day peak usage benchmark?

You must see these as viable, if not in your opinion optimal. alternatives?

I agree that you are describing the ideal situation. I think the one thing that will slow Linden Labs from doing such a thing has to do more with the work involved in changing to such a system rather than any unsoundness such a system might have. Right now they are keeping track of one variable, the peak amount of land owned. To have to keep track of the amounts of land owned continuously over time would need a complete overhaul of the current programs and new calculations of what the optimum pricing on such values would be. The programming part would probably be the easy side. The hard part will be deciding on the costs with a system that uses completely different variables when compared to the original system. Ecspecially if they switch to something as different as tracking the amount of CPU processing each person uses. The pricing wouldn't be anything like the pricing for land teir as the values are probably distirbuted completely different.