[MUD-Dev] Economic Growth (Was: [STORY] Story and population size)

[Daniel.Harman at barclayscapital.com]

> -----Original Message-----
> From: Koster, Raph [mailto:rkoster at soe.sony.com]
>> -----Original Message-----
>> From: Daniel.Harman at barclayscapital.com

>> You certainly aren't going to be modelling a trade opportunity in
>> lesser kysk if you can't import berry wine from foreign climbs.

> If there are no foreign climes because travel is easy, then
> everyone will do it constantly, levelling away any differences. :)
> I don't see any way around the fact that if you want caravans,
> travel has to be difficult and carry a risk of economic loss. Then
> you have to localize, as you say, production of particular goods.

> Now, if what you're talking about the Elite-style model where you
> have distinct locations each with a produced good or two and an
> artificial shortage or two, sure, you can do that. Just remember
> that the game in Elite and its ilk was making it through the space
> sector without getting blown up.

There needs to be distinction between player travel and bulk
shipments of goods. Just as in the modern world, I can hop on a
train and get to the other side of the UK in short order. If however
I want to move 3 tonnes of perishables, its a tad harder. A lot of
the problems you mention with this type of system seem to be
predicated on assumptions that have so far been part of these games.

>> In fact players only tend to value items they can get direct
>> utility from, which whilst pragmatic, makes for a pretty
>> uninteresting trading game.  I don't want the economy to be
>> selling farmed magic_sword_of_flaming_uberness to gimp_y, I want
>> people to be able to set up trade routes and hire caravans.

> To me the answer is to make all the items provide direct utility
> of some sort. Don't have useless goods in your game and then
> ascribe inflated values to them. You want berry wine to have
> value. You have two choices. 1) make it actually valuable or 2)
> subsidize, even if only locally. The Elite model is built on
> localized subsidies.

Going back to what I posted in reply to your other post. The concept
of dropping items as indirect money is pointless. Once thats
removed, you can hand out money directly when money is what you want
to hand out. If you want to give them something that has economic
susceptibility, you can hand that out too. They aren't mutually
exclusive.

>> Furthermore, if npcs don't partake, you are harming the liquidity
>> of the economy. People play these games for fun, and with limited
>> time to play there are very few people who want to spend most of
>> that trading.

> It's worse than that--people who can actually turn a profit at the
> merchanting are rare because it does demand a real-life skill. So
> you run the risk of having a lot of people who dabble in a
> playstyle and do not get the monetary feedback of success, and
> thus do not have fun.

> The answers there, to my mind: provide other forms of feedback (#
> items sold) and downplay thge money losses. After all, players
> losing money is good for our game economies. ;)

As I see it, there are two types of player merchants :

  a) the guy who got a decent item whilst in a dungeon and wants to
  sell it.

  b) the guy who spends all his play time in the market area trying
  to arbitrage.

Right now a) tends to get regularly taken advantage of due to three
factors.  Lack of market knowledge, lack of patience and finally
because thats how b) makes money.

With a more intelligent economy, a) will get a fair return and b)
can make money by doing the elite style trading and not sitting in a
zone spamming hot keys all the time.

>> Sure, you can go the automated vendor route, but in isolation
>> that has the potential to add ridiculous volatility to the
>> economy as players sell gear at way below market value because
>> its now *too easy* to partake in the economy.

> Pshaw--the traditional alternative is that they drop the item on
> the ground, give it to a newbie, or leave it in the donation
> room. Talk about volatile.  ;)

Hmm more often they put the items in the bank until they have enough
to make the torture of trying to sell balance the reward. Or until
their bank is full.

> Seriously, though--I have not seen such volatility develop in UO,
> and it's been running with a vendor-driven economy for years now.

The volatility I speak of is when you introduce them, I don't
believe it will persist although prices will drop globally by about
50% I imagine.

>> NPCs partaking act a a damper on this behaviour. Whether or not
>> my thinking on this volatility is accurate is hard to prove,
>> although I think we will have a good example when EQ implements
>> this feature soon. There is a lot of gear in people's banks, and
>> its going to be dumped into the economy when they add the
>> automated player vendors. I contend that non-active traders will
>> have a huge negative impact on people who like to trade, because
>> they outnumber them and will sell too cheaply.

> EQ is a very bad example because goods do not flow out of the game
> except when corpse recovery fails. The player-player trading in EQ
> is purely dependent on players advancing and having need for
> higher-level items.

So let the players convert these items into money. Sure its
inflationary, but inflation is part of an economy. The only reason
its deadly in muds is because the vendors don't recalibrate their
prices to take this into account.

>> The best thing about npcs partaking is that they are
>> deflationary, if they are taking a 20% margin, thats money coming
>> out of the economy. Furthermore, you have a self correcting
>> economy - if you accidently patch in an item thats easily farmed
>> and initially worth way too much, its not going to stay that way
>> for long as the vendors wise up.

> The problem is the expectation management. Your game has then been
> set up in such a manner that players expect that item to be worth
> something, and will base their whole playstyle around harvesting
> it. If you do not persuade them that hours of playing for zero
> reward is fun, they will put a pox on both your houses and stomp
> off. I've been there--UO's NPCs tracked demand for goods, adjusted
> prices accordingly, refused to buy stuff when there was no demand,
> they could run out of money (though we replenished them
> artificially), etc. Players were actively pissed off because they
> had created a glut of *everything* obtainable from spawns or
> crafting. And the entire market fell into depression because there
> was a surfeit of goods nobody wanted.

I don't think there is anything wrong with the odd depression as
long as it corrects itself. Hell the smart people can buy up stock
cheap, kick start the market and make a killing when it
recovers. The fact that UOs limited economic model went into a death
spiral isn't surprising to me. If a market in one town became
overloaded with something, then thats an opportunity for the traders
to move equip to another town where there is still demand. This will
equalise the price between the two areas. You only had one global
economy - there was no way for this correction to kick in. If you
totally screw up and production just outways global demand across
all micro-economies, then its just not profitable for more people to
enter the market making that product. That works fine if their is a
barrier to entry to producing something. If you want to produce
grain, you have to cough up to buy a farm and wheat and then take a
chance on the harvest (note both start up costs and maintenance
costs, most player trade systems don't have the latter). The reason
things get so damaged is that its entirely too easy to learn a trade
skill so everyone does it. If there is a real cost associated with
starting up, people aren't going to flood the market as there is no
potential for profit. If you aren't making money on something thats
costing you to maintain it, you either stick with the market hoping
for it to pick up or get out. Its not the same situation as when
4million people learn you games jewelry skill and the only potential
for profit is at the top, because it costs money to enter the
market, stay in the market, and leave the market.

>> Surely an evolved economy is based on the trade orientated
>> players making money from higher volume lower margin trades, with
>> less active traders trading less and earning less.

> High volume low margin means ongoing consumption of small
> goods. Typical stuff like this in the real world is consumables,
> things that spoil, small breakable commodities, etc. Mud economies
> have almost none of these things (spell components is one example,
> arrows another, if you track them).

> Again, a lot of it boils down to having amore balanced and
> realistic item suite, where all items have reasonable uses and
> there is an ongoing need for just about all of them.

Agreed, I just don't believe it has to continuously be player
need. An npc town of 4000 people needs a certain amount of food and
resources.

If I were to cover a few items that I think these economies need to
evolve:

  a) Multiple currencies. Creates arbitrage opportunities and allows
  for development of financial markets. Whilst I wouldn't propose
  the introduction of something like futures initially, it would
  certainly be nice to have an environment condusive to this type of
  instrument.

  b) NPC demand. I want cities to have localised demands for
  products based on their current situation. If they are threatened
  by their neighbour, they are probably more interested in arms and
  less so in silk pyjamas. Likewise if they are prospering, luxury
  food and pyjamas are going to be desireable.  Likewise with all
  types of consumable etc.

  c) Caravan + ship based trade. One needs to introduce a
  distinction between what a person can carry, and bulk trading at
  the npc/city demand levels.  Nothing works if you can carry 6
  weeks worth of food items around on your back. By introducing
  caravans, you can tax the transportation and introduce risk
  without having to trample player movement. As I mentioned in my
  other example, think about it in terms of hopping on a train or a
  plane vs hiring a truck. You aren't going to make much economic
  impact on a city if you are importing handluggage sized quantities
  of anything.

  d) Farming + mining - To produce bulk consumables. Currently games
  that allow resource harvesting do so with minimum investment, one
  could expand this by making people buy farms+mines in the same way
  people buy houses in these games (albeit with more utility than
  the latter). You can then allow them to pick
  crops+livestock+location. Hell you could even have a surveying
  skill so that people can judge the fitness of an area for a given
  activity.  There's a lot more that could be done with this, I
  haven't really thought about it too much yet.

  e) Secured loans. With both players and npcs knowing the value of
  items, this is now a possibility. Want to form a farming coalition
  with your friends? Great, everyone put down some security and lets
  buy that farm.  Unsecured loans won't work as people will just
  exploit them.

  f) Going back to e) somewhat. Player produced goods need to have
  barriers to entry, maintenance and exit so that it never
  trivialises any of these decisions. You can even apply these
  principles to tradional mud fare such jewelry skills whereby
  maintenance is predicated on paid membership to a guild - if not
  supply of gems is going to be scarce (hmm what about a black
  market?).

Now I realise this is starting to sound more like civilisation 3
than a mud, but thats the point. Muds suck at this type of thing and
until this changes that will continue. None of these ideas are
intrinsically complicated, however they will interact and exhibit
more complex behaviour. The only risk is if one forgets to model an
essential mechanism ;) (what have I missed lol?)

Dan
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