[MUD-Dev] Economic model..

[Michael Sellers]

Thomas Clive Richards wrote:

> Also, you have to look at the ways wealth is entering and exiting
> the system. Wealth enters the system in once via raw resources
> (trees-> wood, plants -> potions, monster drops etc. etc.), and
> leaves via used items (whenever a player eats food, drinks potions
> etc.), and NPC trades (NPC's don't spend the money they receive,
> it dissapears). Depending on how much money is in active
> distribution within the system (being spent, rather than hoarded),
> the rate of raw materials entering the system fluctuates.

What you've described is a closed economy.  Nothing inherently wrong
with it, except that the task of finding sufficient ways for
resources to exit the economy equivalent to all the resources
entering the economy is a wicked problem.  This is especially true
when you have many PCs making it their business to gather as many
resources as possible from the environment -- and this is made
*much* worse when monsters and such start dropping gold or other
high-value resources.

Too many resources (aka "faucets") pouring into the economy and too
few ways to "drain" these out of it quickly leads to an
over-abundance of resources, and thus hyper-inflation, as seen in
just about every MMP game with an economy to date.  The solutions of
having things break or need to be replaced often helps with this,
but is also exceedingly tedious for the players.

> Basically, the system aims to do several things:

>   - Keep players from extreme poverty or extreme wealth.

>   - ...at the same time, don't make the system unbeatable (this
>   makes it really really boring).

>   - Keep prices realistic, based on supply and demand. Generally,
>   items gathered from dangerous areas will sell for more, because
>   their supply is less (providing of course that the demand is
>   there also).

Keeping prices realistic and based on supply-and-demand is virtually
impossible in a closed economy for the reasons I stated above.  One
solution to this is to open the economy in two different ways.

First, assume a 'shadow' economy of NPC townspeople and the like.
So if an NPC vendor has a certain good on one day, it may be gone
the next, even though no PC bought it -- a "virtual" NPC bought it,
effectively draining that resource out of the economy.  This same
can apply to PC-run vendors too: while only three PCs might visit
your store on a given day, your take from the day includes some
"virtual" sales from NPCs who came in and bought things while you
weren't looking.  Among other things, this makes it difficult for a
group of griefers to put a PC out of business by making sure no one
buys from him; these invisible virtual NPCs will always get through
with at least a few sales.

Second, and probably more important, institute an import/export
market.  The boardgame analogy for this can be found in the 2:1 and
3:1 ports in "Settlers of Catan."  In MMP terms, you set up NPC
agents that represent external buyers and sellers of resources.
These agents will always buy any resource for a certain price, and
sell it for a higher price (but they always take out of the economy
what they buy, sending it "overseas" -- so there may be lag in what
they have to sell vs. what they want to buy).

This effectively establishes the floor and ceiling of a price range
for the resource.  This means that if no one will buy the brooms you
crafted, you can always go sell them on the export market for 1gp
each (or somesuch).  And likewise, if no one will sell you a
broadsword, you can always go buy one on the import market for
100gp.  Thus no local seller will (typically) be able to sell their
broadswords for more than 100gp, and no local maker of brooms will
have to sell theirs for less than 1gp.

These floor/ceiling knobs are significant, as you can tweak them on
an on-going basis to simulate gluts and runs in the economy, and to
soak up extra resources without having to endure either price
crashes or hyper-inflation (both of which hurt gameplay).  Instead,
if everyone is, say, making lizard-skin armor, you can set the
export price to drop slowly as the market gluts, giving people both
sufficient reward in the short-term and sufficient warning in the
long-term to get out of the market.  This model removes the reward
for maniacally making (or macroing) ten thousand shirts or whatever,
and helps forestall hyper-inflation or artificial (especially
griefed) resource shortages.

This model also helps remove the incentive for easy arbitrage, where
an item is bought for one price in one place and sold at a much
greater price someplace close by, without adding any value to the
resource.  This effect along with hyper-inflation has been the bane
of in-game economies going all the way back to Habitat.

Hope this helps spur some ideas!

Mike Sellers
Online Alchemy
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