[MUD-Dev] (fwd) Re: MUD Economies

J C Lawrence claw at koala.kanga.nu
Mon Mar 15 00:24:41 CET 1999

-- forwarded message --
From: Geoff Wong <geoff at cs.eatspam.rmit.edu.au>
Newsgroups: rec.games.mud.admin
Subject: Re: MUD Economies
Date: 10 Mar 1999 00:32:31 GMT

Brandon A Downey <badowney at sprynet.com> writes:

>more difficult half of the problem, which is producing something less than an
>infinite supply of gold. (Typically, become sufficiently power, you can just
>rake in the gold, limited only by the amount of time you want to spend).
>I'm guessing reticent to make powerful things you can get with
>gold, as most mud economies are so out of whack in the first place.

This is pretty much the problem with virtually every mud I've seen that
has an economy. The supply of gold (coins/money/whatever) is
effectively uncontrolled and unlimited. The money is just *created* out
of nowhere and stuck on monsters (etc). Many methods have be suggested
in this thread for controlling the supply of money but they're all just
artificial restrictions on the economy which don't address the actual
problem of unrestrained gold creation. Or in the cash of "faucets" and
"drains" requires a tricky balancing act that is easily thrown out of
whack by clever players.

Money exists to facilitate the transaction of goods and effort between
players (NPCs/etc). If your money supply is uncontrolled then you
effectively have infinite inflation.  This is because there is
continually more units for money for the same amount of effort/goods;
money itself becomes worth less and less as there is more and more of
it created.  Fixed price shops (which many muds have) become more and
more out of date with each passing hour.  Player controlled pricing
goes some way to addressing the pricing problem; but not the infinite
inflation problems.

At Shattered World [1] we've been effectively running a "Loans Standard
Economy" [2] (or "zero-sum" economy) for many years now (6 or so years
- I forget now :). A key feature of this economy is all prices and all
transactions are controlled by players (ie. there are no fixed priced
shops, goods, properties, whatever  in the realm, players control all

The "Loans Standard Economy" can be described as a zero sum economy.
That is the total outstanding loans always equals the total amount of
money in use in the economy.  The can be simply stated as:

Bank Loans = Bank Deposits + Currency

This applies throughout the entire economy, in our case a mud.  Hence
the bank is in control of the money in the economy by controlling the
amount of money it lends (to players). Originally the bank loans were
controlled very strictly; but it required significant amounts of work.
Now bank loans are controlled by player owned banks and the only
"central" control we administer is setting the loan limits on the
player owned banks. Most of this is secured by the value of the
property owned by the loaning player anyway (especially the bank
itself).  Typically bank owners loan large amounts if it's secured
against a property or potential property purchase (they can reclaimed
and sold if loans are not repayed). Small loans are generally given to
reliable *real* players (not 2nd chars etc). Because an actual person
is assessing the risk (at their own risk); a reasonable job is done of
loaning money.

Effectively this means the money supply grows and shrinks according to
player demand for money. It is not inflationary because more money
isn't simply continually "printed" (created) as in most muds.  As all
prices are determined by players; money actually reflects the effort of
obtaining goods (and the goods themselves) within the mud. Shop owners
don't need to continually adjust their prices because there is not
run-away inflation (indeed there are regular periods of deflation).

This creates a give and take situation where the players circulate the money
by buying houses, shops and items to sell in those shops, with the aim of
making money. Other players buy items from these shops to get a flow
of money around the economy such that the money being paid out equals
the money being gained.  Wizards also participate in the economy as
banking entities for their creations. If a wizard wants a monster to
have cash (as a reward) then that wizard needs to collect cash in some
manner. If the wizard doesn't have the cash then the monster doesn't
get the cash either. Wizards also don't create items endlessly of out
of nothing; they purchase the items from shops in the realm (if the
prices are reasonable!).  This allows all creation of goods (except
unique magical items) to be also controlled by players too. This also
allows the establishment of a resource base and ecology to support this
goods creation.

Anyway - there are lots of interesting areas of implementation this
opens up. The first step to implementing this is to control the
creation of money. All money needs to be created (and monitored)
through a central bank (a simple server object in the mud will do). The
standard money object needs to be disabled so wizards can't just
created money, but need to use the central bank to do this. This allows
you (as the administrator) to monitor the flow of money; typically
you'll see lots of wizards going into debt. You can then encourage them
to actually collect as well as give out money; perhaps even cap their
maximum debt.

The second step is to scrap all fixed price shops and replace them with
shops which have buy/sell prices fixed by players.

The next step is to create a system where players can loan/borrow money
to actually "create" money in the economy. As players do this more and
more often; their becomes less reason for wizards to loan money (if
they're effective at collecting money; or rewrite their realms not to
give out cash). After this their are a number of steps that you may
take. Of interest is intergrating a resource/production model into your

Anyway - it's some work - but for us it has paid off handsomely saving
us lots and lots of economic headaches. It has also allowed us to
monitor what is happening in the world in a way that was not previously

Geoff Wong
aka Dredd at Shattered World

---- References.

[1] Shattered World - http://www.shattered.org

[2]  L.M. Goldschlager and R. Baxter, (1992), "The Evolution of a Pure
     Credit Monetary System", Monash University, Melbourne, Australia,
     presented at 21st Conference of Economists, Melbourne, July 1992.

-- end of forwarded message --

J C Lawrence                              Internet: claw at kanga.nu
----------(*)                            Internet: coder at kanga.nu
...Honorary Member of Clan McFud -- Teamer's Avenging Monolith...

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