[MUD-Dev] DESIGN: Active and Inactive currency

[John Buehler]

Jeff Freeman writes:
> From: John Buehler
>> Jeff Freeman wrote:

>>> It seems to me that the problem there isn't the faucet at
>>> all. But how do you address it?  All crafters will take any cost
>>> or drain that you throw at them and use that to establish a base
>>> price, charging everyone else that plus a little more, and
>>> therefore accumulate cash.

>> 1. Competition and anti-trust laws.

> This won't address the problem of cash 'pooling' on cookie-makers.
> Even with reasonable/fair prices, all the money in this example
> flows to them and stops.  The only way to make money flow the other
> direction would be to force the cookie-makers to sell cookies for
> less than it costs to make them.  I think players would refuse to do
> that.

Yeah, we don't want businesses to fold every time they start.

>> 2. Don't make cookies a mandatory consumable.

> I think that would only slow the rate at which money is flowing to
> them, since it'll swirl around a bit before it gets there.

Slowing is good.  If we can push player businesses down to razor-thin
margins, then the pool size stays relatively small.  After that, it's a
matter of coming up with incentives for the players to do something with
that cash.

Well, how about vanity purchases?  Or just purely fun stuff?  That will
cause players to spend their cash.

But, you immediately say, players will incorporate the cost of those things
into their prices.  I disagree with that becuase these are truly
discretionary purchases.  The other businesses may not place the
same value on those discretionary purchases.  So he can drive his
prices lower than the guy who insists on keeping prices high enough
to support his mountain-climbing habit.

>> Consider the oil industry.  Oil is the lifeblood of western
>> civilization.  Without it, we're toast.  There are only a few
>> companies that are cranking out petroleum products in volume. If
>> they acted in collusion, they could extort arbitrary amounts of
>> money from us.  Except that we have laws against that sort of
>> thing, so theoretically they are in competition.

> Right, but if we pass laws that force them to sell oil for less
> than it costs to produce, they'll just quit doing it.  What
> prevents them taking a lot of money out of the economy (making it
> inactive) is that they invest it (or bank it, and the banks loan
> it back out).

> Competition and anti-trust laws don't prevent them from making
> *some* profit.  In a game, most of that profit would be converted
> to inactive currency.  Essential acting as a drain, removing money
> from circulation.

All this is true, except for the implication that there isn't a way
to solve the pooling problem.  It is discretionary expenditures that
make the difference.  Players need to have things that they can buy,
organizations that they can give to, support and so on, that will
inspire them to spend their ready cash.  If they are too flamboyant
with their spending, competition will kill them because they can't
just arbitrarily raise their prices.

>> Something that I want to stress is competition comes in many
>> ways. It's not just two companies making cookies head to head.
>> Cookies provide something to people.  It might be the energy
>> boost. It might be social status.  It might be taste.  Whatever
>> it is, it might be something that can be provided by other goods
>> and services.  So competing with cookie-makers for taste might be
>> the bread makers. Competing with cookie-makers for energy boosts
>> might be the chocolate-makers.  Competing with the cookie-makers
>> for status might be the coffee shops.  And so on.

> They're all still collectively, "where money ends up".  And since
> we don't have banks re-investing the money, it's not just where
> money ends up, but where money *ends*.  So instead of pooling on
> 15 cookie-makers, it pools on 5 cookie makers, 5 coffee-grinders
> and 5 bread-bakers.  Competition and anti-trust rules can keep the
> prices reasonable, but it won't stop the money from flowing
> one-way, pooling, and going inactive.

Business is business.  Money does flow out of a business again, of
course.  Businesses have overheads, costs and so on.  If these
outflows are not uniform everwhere and for everyone, there is
another challenge facing the businesses - optimizing their prices
versus their costs.

One business may have to operate at razor-thin margins because his
suppliers aren't as good as another business's.  He can't raise his
prices because he has the same customers as the other business.  And
so on.

> My conclusion: The Crafter in a game performs the role of economic
> drain, by removing money from circulation.

That's the same conclusion that the designer of every game I've ever
played has come to.  I don't care for the economic models that
result.

My conclusions:

  1. Competition keeps pooling down, and incentives to spend drain
  those pools.

  2. The use of faucets and drains as a methodology for designing an
  economy is inherently flawed and leads down the wrong road.

Said another way, cash in an economy just needs to be kept on the
move.  No single person should WANT to hang onto cash because it's
more fun to spend it than it is to pile it up.  When players are
providing the outlets for that free cash, the money keeps floating
from player to player.

Lastly, businesses are the ones that SHOULD be pooling money in a
game.  The people who should get money are the ones that are
providing services to the rest of the player community.  That's WHY
we pay each other with our valuable money, after all.  You have
something that I want, whether cookies, bread or coffee.

I think designers make the mistake of rewarding players with cash
and prizes for killing things, when the entertainment of killing
something should be the reward.  Unfortunately, killing things isn't
very entertaining.  Thus the problem; cash and prizes go to players
who aren't doing anything to add to the entertainment value of the
game for other players, and the whole game economy goes
inflationary.

Perhaps games need more types of currency than coins.  Maybe
prestige and
trophies for the killers.  Ranks and titles for the politicos, etc.

JB
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