[MUD-Dev] D&D vs. MMORPG "complexity"

[Dave Rickey]

From: "Jeff Cole" <jeff.cole at mindspring.com>
> From: Dave Rickey

>> Define value, then.  "The value of a thing is what it will bring"
>> is the definition I'm most comfortable with, this would seem to
>> pre-suppose demand.

> That definition is fine.  Why doesn't that also pre-suppose
> supply?  Beyond begging the question, why is it useful to
> pre-suppose demand but not value?

Because from this side of things, supply is *not* a given, in an
online world supply exists only if it is created by the designer.

> Consider an item with a given value based upon its supply and
> demand.  If you increase the scarcity (decrease the supply) while
> maintaining demand, you increase the value because as the price
> rises above some consumer's reservation prices.  However, you can
> achieve the same increase by increasing demand while maintaining
> supply.

Not quite, increased price reduces demand to match supply.  But,
yes, the equation is symmetrical, at least in theory it makes no
difference if you increase demand or decrease supply.

> You're supply-biased analysis lends strong support for my
> assertion that developers ignore demand as an effective economic
> management tool.

> The response to that, of course, is "How can we directly manage
> demand for items?"  If your economy is solely (or, even, mostly)
> based on big-ticket items like armor and weapons, then this is a
> very legitimate concern.  The only way to increase demand is to
> implement item decay and increase the rate of decay; but players
> are likely to resent such a move.  I do not argue that for
> big-ticket goods, demand-management might not be an option.

Demand management as you define it was part of the development
process, but it was mostly aimed at getting a decay rate that the
players would accept.  It's too blunt an instrument for economic
fine-tuning.

>> But we've pretty solidly established that scarcity *alone* can
>> create demand (in the case of rarities).

> I am very interested in how scarcity actually creates demand.  I
> am not sure I understand the mechanism.  I infer that you mean a
> situation in which an item is desired simply because it is scarce.
> I would argue that the while the scarcity might create demand for
> the given item, it does not create the demand for something
> scarce.  For example, my ranger in DAoC looted Red War Paint ages
> ago.  It is equippable and the graphic is a loot bag (we called it
> the "Loot Bag o' Doom")--the only other one of which I am aware on
> Hib/Lance is owned by a guildmate.  I would equip it while I was
> crafting and got offered quite a bit of money for it.  I suppose
> you could correctly argue that it's scarcity created demand in the
> object itself, but I am not sure that such a concept is useful.
> It seems that the demand that is creating the value is the desire
> to distinguish oneself from the other players.  That is, the
> demand which a developer would seek to leverage is the general
> desire of players to distinguish themselves from other players--to
> have something that others do not.  Is it useful to distinguish
> between player Demand to be different from demand in something
> different?  I suppose scarcity can create the latter (little "d"
> demand), but certainly does not create the former (big "D").  Am
> interested in your take.

Take dyes in Camelot.  In absolute terms, there was no reason for
one dye to be more expensive than another.  They all did the same
thing, assigned a tint to the item.  But black and strongly
saturated tones were arbitrarily assigned high costs.  These dyes
indicated high value strictly because they had high prices.  You
could argue that this was from some higher aesthetic value for
stronger colors, but then you'd have to explain how exactly the
opposite ocurred in The Realm, where black and primary colors were
cheap and pastels were the most valued.

>> However, demand alone cannot create value, we all demand a
>> constant supply of air, yet it has no value.

> Or: "However, scarcity alone cannot create value, there is only
> one mug from which I drink my coffee (mostly, except when the gf
> wants to make a point first thing in the morning), yet it has no
> value."

Your coffee mug might be worth nothing, but what about Napoleon's?
That's why collectibles are all about provenance.

> Something for which there is no demand can be the scarcest of
> scarce and no "value" will attach.  Likewise, something that is
> fungible and freely available can be utterly essential to a
> consumer and no "value" will attach.

Go check out eBay or "Antiques Roadshow" and tell me that there is a
rational demand for many of those items.  This one is *not*
symmetrical.

>> If people really reacted rationally to marginal value, yes.  They
>> don't, small increments of utility at the top end are assigned
>> value far beyond those of an "efficient" market.

> Please explain how consumer rationality implicates market
> efficiency.  I do not disagree that consumer rationality can
> impact market efficiency, but I am not sure the nexus is quite as
> extensive as you suggest.  However, if you *force* your players to
> make market decisions irrationally, it seems a bit disingenuous
> then to argue that players don't act rationally.  Without more, I
> cannot meaningfully comment.

How is anyone forced to make an irrational decision?  I point to the
$15,000 couch again.

> In EQ, you saw the increase in supply of substitute goods decrease
> the value of other goods all the time.  I used to spend entire
> afternoons in the tunnel just buying low/selling high just to see
> what item I could acquire.  Start with a modest bankroll (few
> hundred plat, a forest loop, batfang earring ...) and just buy and
> barter.  That is something that has never occurred in Camelot.

In EQ, what happens is very similar to what happens with computer
hardware: Price points don't move, but goods steadily slide down the
curve.  At any given time, there are only three classes of
equipment, those that are extremely powerful and hard to get
(usually from the latest expansion), those that are common and
reasonably acceptable for use (usually from the last expansion), and
junk (everything else).  Anything you hold is constantly being
devalued, so everyone is encouraged to keep trading in hopes of
outrunning inflation.

>> I am not aware of a MMO*/MUD that has manages its economy through
>> dynamic management of demand for its resources.

>> Camelot does, but through a deliberately indirect method.  Rather
>> than floating the cost of making things through manipulation of
>> ingredient amounts or some such means, I took advantage of the
>> irrational response to small increments of utility value at the
>> high end.

>> <snip>

>> It is my belief that any effort to *directly* moderate supply and
>> demand is the equivalent of central economic planning: The
>> natural "irrational" response of the economic participants will
>> completely invalidate your efforts.  But if the moderating
>> effects are "organic" to the system, and a byproduct of the
>> participants own actions, the system will stabilize with a
>> minimum of fuss.

> Suffice to say that I am unimpressed with the concept of "economy"
> as implemented in Camelot.  If Camelot's economy is especially
> susceptible to irrationality it is because, by design, it forces
> players to irrationally value items and not because all economies
> per se are so susceptible.

Again, explain to me how Camelot forces irrational behaviour.
Explain to me how any economy can force irrational behaviour, for
that matter.  Economists generally assume that all economic
participants are rational, and that any apparent irrationality is
simply the result of inadequate information.  I'm arguing that the
irrationality is inherent, that when the participants are fully
informed they will make sub-optimum decisions even though a rational
person would have to know they were doing so.

> Once developers shift the economic bases from "necessary" goods to
> goods/services that support and complement such "necessary" goods,
> then developers can more directly manipulate both demand and
> supply.  Resource sources and sinks can be managed more
> effectively *and* from the players' perspective, organically.  Not
> to mention an increase in the possible "professions" that players
> might undertake.

Okay, I read that 5 times, and it still didn't make any sense.  What
are you trying to say?

--Dave


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