<p>No, there is no inflation.</p>

<p>Inflation is caused by a relative increase in the amount of currency, relative to the amount of scarce goods and services available.</p>

<p>As you note, there is a continuous increase in the amount of "currency" here - reputation.</p>

<p>However, reputation is not spent on <strong>scarce</strong> goods and services. There is no meaningful limit on the number of people who can attain any given rep-based privilege. So the rep-level for a given privilege does not need to increase, when the number of people with high rep increases.</p>

<p>The rep-level barrier for privileges is to ensure that on the whole, the people who attain a specific privilege are familiar enough with the workings of the site, and have shown enough good behaviour, to wield it responsibly. This is not affected by the number of other people who have also reached that specific rep level.</p>

CC BY-SA 4.0
2019-04-15T07:23:37.627Z
2019-04-15T07:23:37.627Z
410 gone
<h3>Yes, there is inflation.</h3>

<p>StackExchange was created in 2008. Anybody who had 5,000 (arbitrary value) reputation points in 2009 would have been perceived as an outstanding member. Now, having accumulated 5,000 points in ten years of participation on a much expanded site looks less impressive. Thus, achieved respect per reputation point has decreased.</p>

<p>The respect is not related to the absolute number of reputation points but to belonging to some top percentile of active members. As the necessary threshold increases, the value of an individual reputation point diminishes. I would call this inflation.</p>

<h3>P.S.:</h3>

<p>KennyLJ has commented that he conscientiously ignored <em>consumption externalities</em> and <em>positional goods</em> because they are tricky and generally ignored in Economics. If I interpret his comment correctly, these aspects should not be considered in the context of questions about inflation like this one.</p>

<p>However, I think that this <em>"consumption externality"</em> is the key element for understanding StackExchange. It's not an externality, but the product itself. Badges and privileges are secondary.</p>

CC BY-SA 4.0
2019-04-15T19:51:22.413Z
5,000 rep can still be pretty impressive on a site in beta.  For example, SE.Quantum computing just [celebrated its first year](https://quantumcomputing.meta.stackexchange.com/questions/387/), with the post specifically listing the users who had 2,000+ rep (of which there were only 8).
Nat
CC BY-SA 4.0
2019-04-15T23:46:56.940Z
@nat it's possible then that inflation is relative to the site being used
Jodast
CC BY-SA 4.0
2019-04-15T12:35:27.217Z
2019-04-16T08:30:07.823Z
2019-04-16T08:30:07.823Z
Frank from Frankfurt
<p>Yes, there is some kind of inflation on Stack Exchange.</p>

<p>As pointed in other answers and in comments, reputation can be seen as a currency to buy privileges. Newer sites have lower thresholds for several privileges - for practical reasons - and those thresholds rise as the site expands. For example, being able to create tags "costs" 150 reputation in Economics SE, 300 reputation in Cross Validated SE and 1500 reputation in StackOverflow. Therefore, privilege prices are subject to inflation as sites grow.</p>

<p>However, it should be noted that the economy of privileges is not a free marked one but a planned one, because privilege prices are not related to demand but set by a central authority in order to allocate the desired number of privileges.</p>

<p>Interestingly, bounties economy is indeed a free market one, and it would be interesting to study the evolution of the bounties offered.</p>

CC BY-SA 4.0
2019-04-15T16:09:11.413Z
It's not a purchase because you still have the reputation after you gain the privilege - there's no exchange involved, Stack Exchange gives it to you by virtue of you having it. Also, you can gain reputation far in excess of the amount of privileges you could possibly acquire. In a "normal" economy, you could (in principle) continue to purchase goods as you acquire more money - for example, I just purchased several thousand dollars of stock this morning, but the fact that I purchased stock today doesn't mean that I've gotten closer to some limit of goods I can acquire.
EJoshuaS - Stand with Ukraine
CC BY-SA 4.0
2019-04-16T08:06:53.630Z
@KennyLJ - In your answer you claim that prices have not changed from 2013, which I assume to be right, but you can't use that to claim that prices have never changed. As far as I can see, sites in beta state have some differences compared to normal sites and those sites have some differences with StackOverflow. I assume that some changes happen as sites grow - maybe automatically when they leave beta state.
Pere
CC BY-SA 4.0
2019-04-15T12:22:49.050Z
2019-04-15T12:22:49.050Z
Pere
<p><strong><em>tl;dr</em>–</strong>  Sure, we can say that rep undergoes inflation/deflation.  However, like the US dollar or any other currency, we'd need to qualify what <a href="https://en.wikipedia.org/wiki/Market_basket" rel="nofollow noreferrer">market basket</a> we're comparing it to, as claims about inflation/deflation are meaningless without a reference.  In the case of StackExchange rep, the relevant market basket is less obvious, so it'd need to be qualified for a claim about inflation to make sense.</p>
<hr />
<h2>StackExchange rep can be said to undergo inflation if the meaning of the claim is established.</h2>
<p>Even US currency doesn't experience inflation ideally.</p>
<p>For example, <a href="https://www.in2013dollars.com/us/inflation/1950" rel="nofollow noreferrer">this website</a> claims that <span class="math-container">$1\,\text{USD}_{1950}$</span> (i.e., <span class="math-container">$\\\$1$</span> from 1950) would be <span class="math-container">$10.55\,\text{USD}_{2019} .$</span>  Presumably that means that <span class="math-container">$\\\$1$</span> back in 1950 could've bought about <span class="math-container">$\\\$10.55$</span> worth of similar products today.</p>
<p>Except that isn't true for technological products.  <span class="math-container">$\\\$1$</span> will get you far cooler stuff today than it would've in 1950!  If we look at <a href="https://en.wikipedia.org/wiki/FLOPS#Cost_of_computing" rel="nofollow noreferrer">the cost of floating-point operations per second (FLOP/s) over time</a>, it'd seem that the US dollar has undergone wild deflation.</p>
<p>The trick behind discussing &quot;<em>inflation</em>&quot; seems to be to put it up against a reasonable <a href="https://en.wikipedia.org/wiki/Market_basket" rel="nofollow noreferrer">market basket</a>.  We can then say that inflation between two times <span class="math-container">$t_{\text{start}}$</span> and <span class="math-container">$t_{\text{end}}$</span> would be<span class="math-container">$$
\left[\text{inflation factor}\right]_{t_{\text{start}} \to t_{\text{end}}}
~ \equiv ~
\frac{
\displaystyle{\sum_{\forall \text{items}~i}{w_i \, P_{i}\left(t_{\text{end}}\right)}}
}{
\displaystyle{\sum_{\forall \text{items}~i}{w_i \, P_{i}\left(t_{\text{start}}\right)}}
}
\,,
\tag{1}
$$</span>
where</p>
<ul>
<li><p><span class="math-container">$w_i$</span> is the weight of market-basket item <span class="math-container">$i ;$</span></p>
</li>
<li><p><span class="math-container">$P_i\left(t\right)$</span> is the price of market-basket item <span class="math-container">$i$</span> at time <span class="math-container">$t ;$</span></p>
</li>
<li><p>the inflation-factor describes the span from a start-time, <span class="math-container">$t_{\text{start}} ,$</span> to an end-time, <span class="math-container">$t_{\text{end}} .$</span></p>
</li>
</ul>
<p>I assume that <a href="https://www.in2013dollars.com/us/inflation/1950" rel="nofollow noreferrer">this website</a> claimed an inflation of <span class="math-container">$\frac{10.55\,\text{USD}_{2019}}{\phantom{0}1.00\,\text{USD}_{1950}}$</span> because it was looking more at stuff like food than FLOP/s.</p>
<p>Say a newscaster gets on TV and says that the US dollar is undergoing wild deflation, implicitly referring to a basket composed of stuff like FLOP/s.  They'd probably get a lot of flack for false reporting, right?  People would find it deceptive to speak of inflation in that sense since it's not what's normally meant by it.</p>
<p>Likewise, we can say that reputation on StackExchange has a changing value over time.  Presumably a bounty for <span class="math-container">$+500\,\text{rep}$</span> would have less power to entice <a href="https://stackoverflow.com/users/22656/jon-skeet">@JonSkeet</a> now than it may've at StackOverflow's inception.</p>
<p>Then if we judge inflation of StackOverflow rep by its power to entice @JonSkeet to deliver some service, e.g. answer a question about how to write a <code>for</code>-loop in C#, then that inflation would be<span class="math-container">$$
\left[\text{inflation factor}\right]_{\text{2009} \to 2019}
~ = ~
\frac{
P_{\text{answer}~\texttt{for}\text{-loop question}}\left(2019\right)
}{
P_{\text{answer}~\texttt{for}\text{-loop question}}\left(2009\right)
}
\,,
$$</span>which might have some value, like... I dunno.  I mean, how much rep would it take to entice @JonSkeet to answer a relatively simple question on an average day – I'd bet he'd do it today for a trillion-rep, if for no other reason than because it'd be funny, but we'd have to ask him!</p>
<p>But say that we look at the inflation of StackExchange rep with respect to how many downvotes it'll buy.  Then, in the context of non-Meta answers, that cost has been constantly <span class="math-container">$1\,\text{rep}$</span> for a while, so it'd be something like
<span class="math-container">$$
\left[\text{inflation factor}\right]_{\text{?} \to 2019}
~ = ~
\frac{
1\,\text{rep}
}{
1\,\text{rep}
}
~ = ~
1
\,.
$$</span>
Or we can look at the inflation of the cost to view the website's homepage, which is (and I assume always has been) <span class="math-container">$0\,\text{rep} .$</span>  So then,<span class="math-container">$$
\left[\text{inflation factor}\right]_{\text{?} \to 2019}
~ = ~
\frac{
0\,\text{rep}
}{
0\,\text{rep}
}
~ = ~
\left[\text{indeterminate}\right]
\,,
$$</span>which is <a href="https://en.wikipedia.org/wiki/Indeterminate_form" rel="nofollow noreferrer">indeterminate</a> because the definition doesn't clarify how to resolve <span class="math-container">$\frac{0}{0} .$</span></p>
<hr />
<h3>Conclusion.</h3>
<p>To sum this up:</p>
<ol>
<li><p>Inflation is relative to a market basket.</p>
</li>
<li><p>Unlike in casual conversations about the US dollar, StackExchange rep doesn't have a standard market basket that someone'll assume you to be talking about if you make a claim about it.</p>
</li>
<li><p>So, you <em>can</em> make claims about StackExchange rep having inflation/deflation, but since it's subjective to an unassumed market basket, you'd need to clarify what the reference basket is for the claim to make sense.</p>
</li>
</ol>

CC BY-SA 4.0
2019-04-16T03:32:15.560Z
Fun fact:  In order to link @JonSkeet's actual user profile, you have to pass a Will save.  If you fail, you must instead link Chuck Norris memes.
Nat
CC BY-SA 4.0
2019-04-16T16:25:15.540Z
Jon Skeet has inflated reputation all on his on.  He is John Cena in disguise
Jodast
CC BY-SA 4.0
2019-04-16T03:31:00.983Z
2022-08-15T06:01:15.890Z
2022-08-15T06:01:15.890Z
Nat
<p>As most active users of this site know, the way the reputation system works is that everyone starts out with 1 reputation and a user can earn more reputation by asking good questions and writing exceptional answers (as well as other methods), and a user can lose reputation by writing bad questions and answers.  This way, users can make a profit or take a loss without taking/giving currency from/to another user.  Can inflation happen with a system like this?  As more reputation is gained, does it mean less?</p>

CC BY-SA 4.0
2019-04-15T10:17:17.730Z
It's not really a currency because it's not really a medium of exchange; it occasionally gets used for bounties but that's about it.
pjc50
CC BY-SA 4.0
2019-04-15T10:29:00.687Z
The reputation levels for several privileges are different across StackExchange sites. Aren't those changes related on how many people are on different sites and how much reputation they have? Haven't those levels changed with time as sites developed? All answers here are assuming that those levels (prices) are fixed, but I'm not sure that they are.
Pere
CC BY-SA 4.0
2019-04-15T11:47:24.713Z
@Pere indeed, new sites have lower thresholds for several moderation privileges, simply because there are too few people that could otherwise use them.
JAD
CC BY-SA 4.0
2019-04-15T12:01:44.420Z
Therefore, there is some kind of inflation on price of privileges, although its behavior can be very different from inflation in "real" economies.
Pere
CC BY-SA 4.0
2019-04-15T17:41:15.850Z
So then @pjc50 it is a medium of exchange
Jodast
CC BY-SA 4.0
2019-04-16T09:15:45.950Z
Besides the minor tangible uses (bounties), reputation points also have value in showing reputation, and that might be subject to inflation over time. For example, if a recruiter saw that a job candidate has 1000 reputation in 2013, he'd value that more highly than if he did in 2019.
Jonathan
<inflation><currency><money>
Can inflation occur in a positive-sum game currency system such as the Stack Exchange reputation system?
Jodast
# Can inflation occur in a positive-sum game currency system such as the Stack Exchange reputation system?

(Asked by: username_0 on 2019-04-15)

As most active users of this site know, the way the reputation system works is that everyone starts out with 1 reputation and a user can earn more reputation by asking good questions and writing exceptional answers (as well as other methods), and a user can lose reputation by writing bad questions and answers. This way, users can make a profit or take a loss without taking/giving currency from/to another user. Can inflation happen with a system like this? As more reputation is gained, does it mean less?

**Tags:** inflation, currency, money

> **Comments:**
> **username_1**: It's not really a currency because it's not really a medium of exchange; it occasionally gets used for bounties but that's about it.  
> **username_2**: The reputation levels for several privileges are different across StackExchange sites. Aren't those changes related on how many people are on different sites and how much reputation they have? Haven't those levels changed with time as sites developed? All answers here are assuming that those levels (prices) are fixed, but I'm not sure that they are.  
> **username_3**: @username_2 indeed, new sites have lower thresholds for several moderation privileges, simply because there are too few people that could otherwise use them.  
> **username_2**: Therefore, there is some kind of inflation on price of privileges, although its behavior can be very different from inflation in "real" economies.  
> **username_0**: So then @username_1 it is a medium of exchange  
> **username_4**: Besides the minor tangible uses (bounties), reputation points also have value in showing reputation, and that might be subject to inflation over time. For example, if a recruiter saw that a job candidate has 1000 reputation in 2013, he'd value that more highly than if he did in 2019.  

---

## 4 answers

### Answer by username_5 on 2019-04-15. Score: 9

No, there is no inflation.

Inflation is caused by a relative increase in the amount of currency, relative to the amount of scarce goods and services available.

As you note, there is a continuous increase in the amount of "currency" here - reputation.

However, reputation is not spent on **scarce** goods and services. There is no meaningful limit on the number of people who can attain any given rep-based privilege. So the rep-level for a given privilege does not need to increase, when the number of people with high rep increases.

The rep-level barrier for privileges is to ensure that on the whole, the people who attain a specific privilege are familiar enough with the workings of the site, and have shown enough good behaviour, to wield it responsibly. This is not affected by the number of other people who have also reached that specific rep level.


---

### Answer by username_6 on 2019-04-15. Score: 9

### Yes, there is inflation.

StackExchange was created in 2008. Anybody who had 5,000 (arbitrary value) reputation points in 2009 would have been perceived as an outstanding member. Now, having accumulated 5,000 points in ten years of participation on a much expanded site looks less impressive. Thus, achieved respect per reputation point has decreased.

The respect is not related to the absolute number of reputation points but to belonging to some top percentile of active members. As the necessary threshold increases, the value of an individual reputation point diminishes. I would call this inflation.

### P.S.:

KennyLJ has commented that he conscientiously ignored *consumption externalities* and *positional goods* because they are tricky and generally ignored in Economics. If I interpret his comment correctly, these aspects should not be considered in the context of questions about inflation like this one.

However, I think that this *"consumption externality"* is the key element for understanding StackExchange. It's not an externality, but the product itself. Badges and privileges are secondary.

> **Comments:**
> **username_7**: 5,000 rep can still be pretty impressive on a site in beta.  For example, SE.Quantum computing just [celebrated its first year](https://quantumcomputing.meta.stackexchange.com/questions/387/), with the post specifically listing the users who had 2,000+ rep (of which there were only 8).  
> **username_0**: @nat it's possible then that inflation is relative to the site being used  

---

### Answer by username_2 on 2019-04-15. Score: 5

Yes, there is some kind of inflation on Stack Exchange.

As pointed in other answers and in comments, reputation can be seen as a currency to buy privileges. Newer sites have lower thresholds for several privileges - for practical reasons - and those thresholds rise as the site expands. For example, being able to create tags "costs" 150 reputation in Economics SE, 300 reputation in Cross Validated SE and 1500 reputation in StackOverflow. Therefore, privilege prices are subject to inflation as sites grow.

However, it should be noted that the economy of privileges is not a free marked one but a planned one, because privilege prices are not related to demand but set by a central authority in order to allocate the desired number of privileges.

Interestingly, bounties economy is indeed a free market one, and it would be interesting to study the evolution of the bounties offered.

> **Comments:**
> **username_8**: It's not a purchase because you still have the reputation after you gain the privilege - there's no exchange involved, Stack Exchange gives it to you by virtue of you having it. Also, you can gain reputation far in excess of the amount of privileges you could possibly acquire. In a "normal" economy, you could (in principle) continue to purchase goods as you acquire more money - for example, I just purchased several thousand dollars of stock this morning, but the fact that I purchased stock today doesn't mean that I've gotten closer to some limit of goods I can acquire.  
> **username_2**: @KennyLJ - In your answer you claim that prices have not changed from 2013, which I assume to be right, but you can't use that to claim that prices have never changed. As far as I can see, sites in beta state have some differences compared to normal sites and those sites have some differences with StackOverflow. I assume that some changes happen as sites grow - maybe automatically when they leave beta state.  

---

### Answer by username_7 on 2019-04-16. Score: 3

***tl;dr*–** Sure, we can say that rep undergoes inflation/deflation. However, like the US dollar or any other currency, we'd need to qualify what [market basket](https://en.wikipedia.org/wiki/Market_basket) we're comparing it to, as claims about inflation/deflation are meaningless without a reference. In the case of StackExchange rep, the relevant market basket is less obvious, so it'd need to be qualified for a claim about inflation to make sense.

---

## StackExchange rep can be said to undergo inflation if the meaning of the claim is established.

Even US currency doesn't experience inflation ideally.

For example, [this website](https://www.in2013dollars.com/us/inflation/1950) claims that $1\,\text{USD}\_{1950}$ (i.e., $\\\$1$ from 1950) would be $10.55\,\text{USD}\_{2019} .$ Presumably that means that $\\\$1$ back in 1950 could've bought about $\\\$10.55$ worth of similar products today.

Except that isn't true for technological products. $\\\$1$ will get you far cooler stuff today than it would've in 1950! If we look at [the cost of floating-point operations per second (FLOP/s) over time](https://en.wikipedia.org/wiki/FLOPS#Cost_of_computing), it'd seem that the US dollar has undergone wild deflation.

The trick behind discussing "*inflation*" seems to be to put it up against a reasonable [market basket](https://en.wikipedia.org/wiki/Market_basket). We can then say that inflation between two times $t\_{\text{start}}$ and $t\_{\text{end}}$ would be$$
\left[\text{inflation factor}\right]\_{t\_{\text{start}} \to t\_{\text{end}}}
~ \equiv ~
\frac{
\displaystyle{\sum\_{\forall \text{items}~i}{w\_i \, P\_{i}\left(t\_{\text{end}}\right)}}
}{
\displaystyle{\sum\_{\forall \text{items}~i}{w\_i \, P\_{i}\left(t\_{\text{start}}\right)}}
}
\,,
\tag{1}
$$
where

* $w\_i$ is the weight of market-basket item $i ;$
* $P\_i\left(t\right)$ is the price of market-basket item $i$ at time $t ;$
* the inflation-factor describes the span from a start-time, $t\_{\text{start}} ,$ to an end-time, $t\_{\text{end}} .$

I assume that [this website](https://www.in2013dollars.com/us/inflation/1950) claimed an inflation of $\frac{10.55\,\text{USD}\_{2019}}{\phantom{0}1.00\,\text{USD}\_{1950}}$ because it was looking more at stuff like food than FLOP/s.

Say a newscaster gets on TV and says that the US dollar is undergoing wild deflation, implicitly referring to a basket composed of stuff like FLOP/s. They'd probably get a lot of flack for false reporting, right? People would find it deceptive to speak of inflation in that sense since it's not what's normally meant by it.

Likewise, we can say that reputation on StackExchange has a changing value over time. Presumably a bounty for $+500\,\text{rep}$ would have less power to entice [@JonSkeet](https://stackoverflow.com/users/22656/jon-skeet) now than it may've at StackOverflow's inception.

Then if we judge inflation of StackOverflow rep by its power to entice @JonSkeet to deliver some service, e.g. answer a question about how to write a `for`-loop in C#, then that inflation would be$$
\left[\text{inflation factor}\right]\_{\text{2009} \to 2019}
~ = ~
\frac{
P\_{\text{answer}~\texttt{for}\text{-loop question}}\left(2019\right)
}{
P\_{\text{answer}~\texttt{for}\text{-loop question}}\left(2009\right)
}
\,,
$$which might have some value, like... I dunno. I mean, how much rep would it take to entice @JonSkeet to answer a relatively simple question on an average day – I'd bet he'd do it today for a trillion-rep, if for no other reason than because it'd be funny, but we'd have to ask him!

But say that we look at the inflation of StackExchange rep with respect to how many downvotes it'll buy. Then, in the context of non-Meta answers, that cost has been constantly $1\,\text{rep}$ for a while, so it'd be something like
$$
\left[\text{inflation factor}\right]\_{\text{?} \to 2019}
~ = ~
\frac{
1\,\text{rep}
}{
1\,\text{rep}
}
~ = ~
1
\,.
$$
Or we can look at the inflation of the cost to view the website's homepage, which is (and I assume always has been) $0\,\text{rep} .$ So then,$$
\left[\text{inflation factor}\right]\_{\text{?} \to 2019}
~ = ~
\frac{
0\,\text{rep}
}{
0\,\text{rep}
}
~ = ~
\left[\text{indeterminate}\right]
\,,
$$which is [indeterminate](https://en.wikipedia.org/wiki/Indeterminate_form) because the definition doesn't clarify how to resolve $\frac{0}{0} .$

---

### Conclusion.

To sum this up:

1. Inflation is relative to a market basket.
2. Unlike in casual conversations about the US dollar, StackExchange rep doesn't have a standard market basket that someone'll assume you to be talking about if you make a claim about it.
3. So, you *can* make claims about StackExchange rep having inflation/deflation, but since it's subjective to an unassumed market basket, you'd need to clarify what the reference basket is for the claim to make sense.

> **Comments:**
> **username_7**: Fun fact:  In order to link @JonSkeet's actual user profile, you have to pass a Will save.  If you fail, you must instead link Chuck Norris memes.  
> **username_0**: Jon Skeet has inflated reputation all on his on.  He is John Cena in disguise  

---

