[MUD-Dev] DESIGN: Active and Inactive currency

[Castronova]

Real economies have inactive currency: money stuffed under the
mattress, and cash sitting in piggy banks or pockets. There's
actually a lot of it. It's called the 'currency drain.' So long as
it is basically constant, it's not an issue.

Even money in the RL bank is considered inactive to some degree,
because it's not being spent to buy anything. But in RL, the banking
system releases that money back into the system through
loans. Policies that inhibit bank lending practices - reserve ratios
and so on - are the RL levers by which the banking system sets the
line between active and inactive currency. The term period of loans
is another - money that you can borrow for 30 years is more active
than money you have to pay back in 30 days. The basic point is that
the 'activity-ness' of money is kind of a gray area.

That ambiguity should remind us that the focus of economic policy
and design isn't the money per se (or it shouldn't be) - it's the
economic activity itself. People don't have fun with money, they
have fun with the things that money allows them to have or do.

If I were watching an online economy, I wouldn't measure inflows and
outflows at all. I'd measure these things:

  1. Price level, by character level. What does a typical basket of
  player goods cost?

  2. Average earnings per hour of play, by level. How much loot is
  the average person getting? (Get the median of this figure too, so
  that twinking doesn't mess it up.)

  3. Average spending per hour of play, by level. How much money is
  the typical player actually spending? (Again, using medians
  purifies the data of twinking effects.)

There are some other things, and also, since I've never actually run
a world, I'm sure these are not exactly right. But the point is:
measure the economic situation of the player first. It's much more
relevant to design issues than the various money sinks and holes and
faucets, which are only indirectly related to player experience.

Edward Castronova
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