Basic Roles of Economy

[rifft]

In our economy (and from what I remeber from those courses, yes I took some courses about econ, both macro and micro) we essentially consider our resources infinite. It isn\'t our absolute production that\'s important it\'s comperative advantage (if we look at it from the microecon perspective) So for example person A can produce 50 swords or 40 daggers, another person can produce 10 swords or 30 daggers or some balance in between. Person A can produce a greater overall amount of goods. But if he chooses to buy daggers from person B to supplement his own production and sell some swords, both will end up having a greater production. So Person A produces 40 and 8 daggers sells ten swords and buys 15 daggers, whereas person B only produceses daggers, we then have both players at an advantage.

Anyway it makes more sense if you draw it, or google it. The point is, though you can make everything better than the other guy, it doesn\'t mean you should. However, most people don\'t understand this and just call people who can\'t produce much n00bs and brush them off. However, I digress. Econ in itself is not entirely useful in an MMORPG since people don\'t always act in their own best interest. And collusion is much easier to maintain. Anyway all these things break down a free market economy. So in order for the economy to work, dfryer is right, you need to keep cash moving. If people horde it, then it simply doesn\'t affect the game economy.

So introducing at least the possibility for checks and balances is always a good thing. For example you could start out with some stable economy, and let players run from there. If the economy remains stable and sufficiently normal then you don\'t really have to do anything. However, if there is major problem if you don\'t have anything to deal with this possibility your screwed. If you do, then it\'s all good. Allowing NPC to set price margines is a good way to control an economy for some amount of time, maybe have traveling traders that show up in times of trouble.

Anyway, just my two cents, hope I didn\'t get too off topic...

[Aeterus]

You brought up a lot of good points rifft. (and you didn\'t go off topic )

You have said money has to be in constant circulation - circulation obviously being the whole purpose of a stable economy. (therefore i have pointed rule number one, which forces crafters to depend on each other, even if it\'s depending upon npc crafters, the point is it avoids a powercrafter which craft goods from scratch thus resulting in obvious negative economy effects). however it seems you have talked about circulation in a player-run economy.
The question is why should the economy be completly player run in any point ?? this is nice to view, but it serves no purpose other then rendering it instable.
Forcing border prices doesn\'t force the prices themselves, it\'s only a safety mechanism to keep the economy standing.

The reason i\'m repeating this, is because i have played in numerous games where the economy was half or completly player ran, and the results were always disasterous, if it was a real world it might have been nice to have the best weapon in a game dropped to 2% of the original price, but being a game there has to be ranges or people become too powerful which makes the whole thing lose purpose.

I\'m sure you all seen games like runecrap or such, where very low characters ran around with plate+ armor, if the crafting system would be more demanding (making the plate crafting long, requiring large number of ingots, and having each ingot requiring a lot of ore to make) it wouldn\'t happen.
And since in player run economy there is no one to sell the extra wares to, the items drop to ridiculous prices.
Sooner or later, everyone get surplass wares, the demand  is never enough.

[dfryer]

Kuiper7986, you raise an important point (cornering the market for a rare good), but it is the rare goods that we have to worry the least about.  The tendency is for everything to drop in price as the economy gets flooded, so the occasional \"attempted monopolist\" will actually be a moderately stabilizing force.  

In addition, controlling the supply of something makes for interesting guild activity.  If it is a necessary item, there will almost always be somewhere else to get it, but I don\'t think monopolies will destroy the economy.

[rifft]

At this point I have to say MOO! Well ok, not really, but we are all I think talking past each other. Everyone would like to see a stable economy where uber item X is not worth 1 penny, and we wouldn\'t want to see the oposite where shitty item Y is worth 3 million.

Though I think fluctuation in the economy is good, hyper inflation, or price crashing is not.

So for the sake of argument, if we allow trade only between npc\'s and pc\'s and not between pc\'s and pc\'s, in a game where players can craft items, that mechanism achieves nothing. Player can still trade outside the system by trading cash for items or services. However, if instead of burring our head in the sand we introduce some sort of control mechanism (with border prices maybe). I think we could contol such things.

When I mean player run economy, I mean player influenced, items vary in price depending on availability, but not above or below the roof and ceiling prices.

Anyway, I haven\'t really had time to think it through, just some ideas I picked up and put together. In essence we all agree that we want price variation but not crashing or hyper inflation. So what we have to achieve is system that would enforce such guidelines.

[Aeterus]

Originally posted by rifft
At this point I have to say MOO! Well ok, not really, but we are all I think talking past each other. Everyone would like to see a stable economy where uber item X is not worth 1 penny, and we wouldn\'t want to see the oposite where shitty item Y is worth 3 million.

Though I think fluctuation in the economy is good, hyper inflation, or price crashing is not.

So for the sake of argument, if we allow trade only between npc\'s and pc\'s and not between pc\'s and pc\'s, in a game where players can craft items, that mechanism achieves nothing. Player can still trade outside the system by trading cash for items or services. However, if instead of burring our head in the sand we introduce some sort of control mechanism (with border prices maybe). I think we could contol such things.

When I mean player run economy, I mean player influenced, items vary in price depending on availability, but not above or below the roof and ceiling prices.

Anyway, I haven\'t really had time to think it through, just some ideas I picked up and put together. In essence we all agree that we want price variation but not crashing or hyper inflation. So what we have to achieve is system that would enforce such guidelines.

Ye it really seems we talk past each other ^^
Well i totally agree with what you said here, i just thought people here meant a completly player run economy. (aka no npc\'s)
i hope there will be proper division in the game, so people will depend on each other - i just hate to see powercrafters who do all the different phases of crafting, from fetching/creating materials up to the final product.

[Krissanasli]

Economists in the traditional sense rarely tried to impose their own systems - we have examples like Monsanto trying to impose patented seeds on farmers, leading to what might eventually become an iron grip over the world\'s food industry, or the bolshevik communists trying to design their economy from the top down, with disasterous results. Most of them just tried to analyze the economic landscape (and, for this reason, theorized that such things as the linux movement would be impossible to bring about). These two perspectives on economy - analysis and enforcement - are typically applied to MMORPGs as well. Usually, the smaller the things you analyze and change, the less the effect on the economy. A naturally stable economy (like the one people had in the middle ages) shouldn\'t be tampered with too much, but a MMORPG economy, which has about as much of a future as my first SimLife critters had.

I should mention that an unbridled capitalist economy naturally degenerates into state planning - just look at all the mergers that have been taking place in the last fifty years. If this trend goes on for long enough, the number of corporations will grow smaller and smaller... In the end, there can only be one. Nobody wants that to happen in the game world, where the individual player is supposed to have full economic freedom. Most attempts to imitate a capitalist or free-market economy have led deep into disaster - for good reason, as it has been pointed out. First, they were unsuited to the kinds of economy they were trying to emulate, and second, these kinds of economy shouldn\'t have been fully emulated in the first place.

The solution is to make an economic system that doesn\'t crash *because* of the way the gameworld is built, not *in spite* of it. For that, the whole economic process we encountered needs to be analyzed as well as changed.

Let\'s look at the typical ORPG: you get out of town, pick up a few rocks from the quarry of infinite supplies (getting skill points for it) and sell it to a stonecrafter. That stonecrafter builds a dashing stone club out of it, gets skill points and sells the club to an adventurer. That adventurer goes out and (to gain skillpoints) kills stuff, whose furs he then sells to the tanner, who makes a pretty leather armor, all for the adventurer. This way, even if no money were involved, the whole economy would rely on the poor adventurer, who has to get bigger and bigger clubs, tougher and tougher armor to justify the work of everyone else. Meanwhile, the quarryman is mass-producing rocks because it gives him skillpoints; the stonecarver is crafting clubs because it gives him skillpoints, and the tanner accepts furs because - you guessed it - it gives him skillpoints. Some products get through the system, but not all of them, and once they used up, they become part of the waste.

If nobody needs the end result of a process, but that process is useful for some reason, waste results are going to pile up. At this point, you might as well add a junkyarder profession, which can magically convert any sort of item into skillpoints... Throw in currency and an NPC market, however, and you get a convenient way for players to dump their extra resources and further destabilize the economy.

Problems in this setting:
-there\'s infinite supply, finite demand for goods. When every adventurer has a stone club and leather armor, that\'s it for sales. Suppose, though, that the player later wants to buy a stone club of stoning, as he\'s gone up in his skill and can finally use it... That still doesn\'t make the demand infinite - he\'ll only keep buying better and better club until he gets his hands on the best club in the world. By then, there will be mountains of clubs in the streets, piled up and waiting for the scavengers to show.
-there\'s infinite demand for skillpoints. If we lived in a world where ore was plentiful and easy to obtain, and if work wasn\'t so damn hard, we\'d craft sword after sword after sword to get better. This is no good. If, instead of twenty skillpoints in blacksmithing, a top-notch sword needed the joined effort of twenty blacksmiths to create it, we\'d see a lot more socializing and a lot less dumping.
-As it has been pointed out in countless economy books, the world\'s true currency is effort. In this case, it\'s very easy to produce, which leaves few deterrents for players. Some people in the ALFA PW argued that producing anything should be a necessary challenge, which you don\'t want to go through just for fun... People typically have few reasons to work in the real world; in most MMORPGs, people have few reasons *not* to work. In other worlds, real economics operate on the principle that nobody wants to work. While I disagree with this, it *is* partially true.
-When you throw in money, you\'re creating the equivalent of an infinite golden chain that comes out of a wall. Players can just tug and tug at it, with the miners at the end of the chain and the smiths at the front, until the whole room is flooded in gold (instead of clubs and leather armor). Money is nothing more than a more convenient waste product. Remember, as long as even the item-based economy heavily produces waste, the option of converting items into money won\'t make it any less wasteful.
-Everyone wants the Biggest Club. To make the Biggest Club, you need to waste a lot of resources on smaller clubs, which end up lying around or get converted into piles of gold. Why not simply introduce a recycling element, by which you can \"infuse\" the essence of smaller clubs into a bigger one, to give it bonuses of some sort, or a stacking element, by which a big club is made up of several small clubs? (this is impossible to pull off in a  world like Planeshift.)
-The whole economy relies on the adventurer. This itself makes it profoundly unbalanced, but even if a repertoire of items were designed for crafters to own, the mounds of gold wouldn\'t stop growing - in fact, they would probably grow even faster.

Let me go over your ideas, Aeterus.

Proper Division - It takes four or five years, at most, for people to become decent at a complicated craft. For some, it only takes two years. The reason there was no homo universalis in the typical medieval village is because no one had the time to learn new skills. You had to work all day at your craft, and the harder you worked, the more prosperous (i.e. less starving) you were. In Planeshift, though, the characters\' lifestyle is leisurely enough for them to afford to take time off and enjoy themselves.

Minimizing mass production - by this, you mean *slowing down* mass production. It\'s still not quite effective... If you want to take away the player\'s ability to make 500 swords every day, just set a cap to the effort he can make, or make the production process viciously long. A crude shortsword might take an in-game day or so to make, while an elaborate one would need a week. One method I suggested in another thread is the use of \"labor\" points, determined by the character\'s endurance: for 10 labor points, you might pull a chunk of rock out of a wall. For 200, you might make a sword. Suppose that you only gained 50 a day... You would have to wait four days, or work in a team of four people, to make that sword.

(note: this system would also encourage people to hire workers of inferior skill... Throw in a rule that you need a skill level equal to the number of labor points left to be able to invest labor points yourself. So if you have 200 skill points, you can spend your fifty labor points in the sword, dropping the number to 150 - at this point, your buddy with a skill of 162 can pick up and lower it to 90, so his buddy... Well... You get the point. This system can really help out new players and spread money around, but doesn\'t truly solve the overall problem of mass-production.)

You\'re also not taking the players\' needs into account - if you want them to stop making so many swords, make it pointless for them to do so. Keep smiths from gaining skillpoints whe they\'re crafting something they already crafted before, or take away their option to sell to NPC merchants.

forcing market rates - this still means the golden chain keeps getting pulled out of the NPC economy. Sooner or later, people end up with too much gold on their hands. The only difference is that the whole thing\'s regulated, so that *everybody* ends up with the same ammount of too much gold.

large value difference between better items - again, this might only slow down the process to a certain degree. It certainly doesn\'t eliminate it.

While it might be pointless to discuss here, let me show you an interesting economic model: the githzerai economy. Basically, you have a certain number of \"materialization points\", which get higher every level and which you can use to create items - from shortswords to healing potions - based on your level. Once you\'ve devoted mat. points to building an item, they\'re gone for as long as that item remains in existence. You can destroy any item you hold in your inventory to reimburse its owner with the item\'s full cost... However, you cannot destroy your own items if they\'ve been dropped or placed in other players\' inventories. This makes trading a political affair: you want to give  because it will somehow help you, or because you are coerced, or because you believe it will serve a greater cause (arming your champion and sending him off to battle, for instance). It\'s a remarkably simple and robust system that does away with most of the problems found in an ORPG, simply because it avoids the trappings of a real-world economy. There is only one resource - yourself.

The only two problem I can forsee with this system are players leaving with an item and never returning - in this case, a decay system that resets whenever the holder logs in would work most of the time.

Since we\'re playing the RPG to escape real life, I think it would be counter productive to deal with all the headaches of real life.

Who says everyone\'s playing it that way? If I want to escape real life, I\'ll just jump off the nearest bridge. A far more noble purpose for online games would be to *enhance* real life - provide experiences that we could later draw upon or give us something to ponder. Anyone who\'s playing games just to forget himself is missing out on a lot of good stuff.

Actually, I\'m almost tempted to start a new thread... \"Why do we play games, and why should we?\"

[Aeterus]

Originally posted by Krissanasli
I should mention that an unbridled capitalist economy naturally degenerates into state planning - just look at all the mergers that have been taking place in the last fifty years. If this trend goes on for long enough, the number of corporations will grow smaller and smaller... In the end, there can only be one. Nobody wants that to happen in the game world, where the individual player is supposed to have full economic freedom. Most attempts to imitate a capitalist or free-market economy have led deep into disaster - for good reason, as it has been pointed out. First, they were unsuited to the kinds of economy they were trying to emulate, and second, these kinds of economy shouldn\'t have been fully emulated in the first place.

duh.

Originally posted by Krissanasli
The solution is to make an economic system that doesn\'t crash *because* of the way the gameworld is built, not *in spite* of it. For that, the whole economic process we encountered needs to be analyzed as well as changed.

Let\'s look at the typical ORPG: you get out of town, pick up a few rocks from the quarry of infinite supplies (getting skill points for it) and sell it to a stonecrafter. That stonecrafter builds a dashing stone club out of it, gets skill points and sells the club to an adventurer. That adventurer goes out and (to gain skillpoints) kills stuff, whose furs he then sells to the tanner, who makes a pretty leather armor, all for the adventurer. This way, even if no money were involved, the whole economy would rely on the poor adventurer, who has to get bigger and bigger clubs, tougher and tougher armor to justify the work of everyone else. Meanwhile, the quarryman is mass-producing rocks because it gives him skillpoints; the stonecarver is crafting clubs because it gives him skillpoints, and the tanner accepts furs because - you guessed it - it gives him skillpoints. Some products get through the system, but not all of them, and once they used up, they become part of the waste.

You miss the point that every crafter = adventurer in most mmorpg\'s including PS in the future, which kinda makes that paragraph pointless.
I judge you\'re not talking about environmental waste ...

Originally posted by Krissanasli
If nobody needs the end result of a process, but that process is useful for some reason, waste results are going to pile up. At this point, you might as well add a junkyarder profession, which can magically convert any sort of item into skillpoints... Throw in currency and an NPC market, however, and you get a convenient way for players to dump their extra resources and further destabilize the economy.

If you haven\'t read my \"Basic Rules of Character Development\" thread, it points out a rule which links with the economy rules, players should never use a skill only in order to improve it.
If this rule breaks (like in all games), you\'ll get waste products, because people aren\'t crafting (for example) for the products/money, it means they don\'t need it.
hence there should be a need for money, always something better to buy for everyone, and/or daily expenses.

Originally posted by Krissanasli
Problems in this setting:
-there\'s infinite supply, finite demand for goods. When every adventurer has a stone club and leather armor, that\'s it for sales. Suppose, though, that the player later wants to buy a stone club of stoning, as he\'s gone up ...
...profoundly unbalanced, but even if a repertoire of items were designed for crafters to own, the mounds of gold wouldn\'t stop growing - in fact, they would probably grow even faster.

Well, sooner or later people become rich, you can\'t escape it, and it\'s not all that bad if it happens after a year or two. that\'s why i would personally prefere to live in that kind of world than play in it - we have no reason to turn off the hyperspeed these games move by, because it\'s not the only thing we\'re doing in our life.
so a developer can control the time it will take to finally get the best equipment in the game (for your class), so with proper planning this can be changed from 2 weeks to half a year or so, and that\'s one of the purposes of a well-thought of economy.

Originally posted by Krissanasli
Proper Division - It takes four or five years, at most, for people to become decent at a complicated craft. For some, it only takes two years. The reason there was no homo universalis in the typical medieval village is because no one had the time to learn new skills. You had to work all day at your craft, and the harder you worked, the more prosperous (i.e. less starving) you were. In Planeshift, though, the characters\' lifestyle is leisurely enough for them to afford to take time off and enjoy themselves.

Your point is ??
I did not write these rules to make the game more realistic, i wrote them concerning economical stability.
The rule of proper division helps to ensure players relay on each other, and work flow accours.

Originally posted by Krissanasli
Minimizing mass production - by this, you mean *slowing down* mass production. It\'s still not quite effective... If you want to take away the player\'s ability to make 500 swords every day, just set a cap to the effort he can make, or make the production process viciously long. A crude shortsword might take an in-game day or so to make, while an elaborate one would need a week. One method I suggested in another thread is the use of \"labor\" points, determined by the character\'s endurance: for 10 labor points, you might pull a chunk of rock out of a wall. For 200, you might make a sword. Suppose that you only gained 50 a day... You would have to wait four days, or work in a team of four people, to make that sword.

(note: this system would also encourage people to hire workers of inferior skill... Throw in a rule that you need a skill level equal to the number of labor points left to be able to invest labor points yourself. So if you have 200 skill points, you can spend your fifty labor points in the sword, dropping the number to 150 - at this point, your buddy with a skill of 162 can pick up and lower it to 90, so his buddy... Well... You get the point. This system can really help out new players and spread money around, but doesn\'t truly solve the overall problem of mass-production.)

You\'re also not taking the players\' needs into account - if you want them to stop making so many swords, make it pointless for them to do so. Keep smiths from gaining skillpoints whe they\'re crafting something they already crafted before, or take away their option to sell to NPC merchants.

no, i meant minimizing as in scale.
It doesn\'t matter what method you take, the end result is the same, the *better* the item is, the more time it will take to make it.
In proper division i have broken the steps of crafting into several actions, in your system these people do not really work together (but rather pick up the working after each person cannot work farther), so it\'s sorta plastic workflow, in my system each person works on another element in the making therefore it emulates how a real workshop would look like.
Farther more i did not really tried \"solving\" mass-production, because if a guild wishes to mass produce an item, i think it\'s part of the game, the rule is it won\'t be as easy as in most of today games, but will require a lot of players, time, materials, etc ...

Read my other post regarding skills, where a player need to produce something which is close to his skill level in order to improve it. (therefore a good blacksmith making a lot of daggers won\'t get any skillpoints)

Originally posted by Krissanasli
forcing market rates - this still means the golden chain keeps getting pulled out of the NPC economy. Sooner or later, people end up with too much gold on their hands. The only difference is that the whole thing\'s regulated, so that *everybody* ends up with the same ammount of too much gold.

large value difference between better items - again, this might only slow down the process to a certain degree. It certainly doesn\'t eliminate it.

Did you read the other posts here before posting your own, because it certainly seems you didn\'t.
NPC rates help ensure borders in items prices, therefore making sure item prices don\'t drop below a certain value (thus collapsing the market for a certain item), and don\'t get an uber value (items which are very hard to make, skill and time wise, can be exploited by the crafter to sell them at ridiculous prices, even if it\'s realistic it will still make him too rich)

Yes large value difference between items slows down the process instead of eliminating it. than again if you eliminate it, it means you\'ll never get the good items. (and that\'s what you want right ? a game with good items, where nobody can get them ... )

Originally posted by Krissanasli
While it might be pointless to discuss here, let me show you an interesting economic model: the githzerai economy. Basically, you have a certain number of \"materialization points\", which get higher every level and which you can use to create items - from shortswords to healing potions - based on your level. Once you\'ve devoted mat. points to building an item, they\'re gone for as long as that item remains in existence. You can destroy any item you hold in your inventory to reimburse its owner with the item\'s full cost... However, you cannot destroy your own items if they\'ve been dropped or placed in other players\' inventories. This makes trading a political affair: you want to give  because it will somehow help you, or because you are coerced, or because you believe it will serve a greater cause (arming your champion and sending him off to battle, for instance). It\'s a remarkably simple and robust system that does away with most of the problems found in an ORPG, simply because it avoids the trappings of a real-world economy. There is only one resource - yourself.

The only two problem I can forsee with this system are players leaving with an item and never returning - in this case, a decay system that resets whenever the holder logs in would work most of the time.

You know, an economy can stay alive without making it so extremely artificial ...

Originally posted by Krissanasli

Since we\'re playing the RPG to escape real life, I think it would be counter productive to deal with all the headaches of real life.

Who says everyone\'s playing it that way? If I want to escape real life, I\'ll just jump off the nearest bridge. A far more noble purpose for online games would be to *enhance* real life - provide experiences that we could later draw upon or give us something to ponder. Anyone who\'s playing games just to forget himself is missing out on a lot of good stuff.

Actually, I\'m almost tempted to start a new thread... \"Why do we play games, and why should we?\"

Everyone has its own reason to play a game, you are misintepetrating the word escaping to its physical meaning.

you are contradicting yourself by saying that we aren\'t playing games to escape into a setting we enjoy but rather enrich our own lives with this experience. (which is basically the same thing, they both bring joy to the person, so the only difference is the point of view of the person to what he does)

If a game would be exactly the same as real life, nobody would have a reason to play it, therefore we play games to achieve things we cannot in real life (be it through things which don\'t exist, are forbidden, immorall etc etc ...), and to have a environment which doesn\'t have things we hate (taxes, criminals, abusers, etc etc ...).
While some people would like to play a very realistic game which only has a different world (be it fantasy), some would like to play without worrying about deseases, taxes, crappy work pays, annoying people, disgusting behaviours, etc ...
And going back to the main subject, this means the majority of people (in a game where economy is stable, and getting rich is a matter of a year and not a few weeks) wouldn\'t like to spend tax money if the \"government\" isn\'t actually using it.

[Krissanasli]

You miss the point that every crafter = adventurer in most mmorpg\'s including PS in the future, which kinda makes that paragraph pointless.

Not really. People have different playing styles - one might want to focus on crafting, the other on adventuring. You\'re right in saying that everyone will want a shiny new club and leather armor, although the problem of finite demand still stands. It might be enlarged, but it\'s still finite.

Also, waste means clubs, money, whatever. If anything\'s not used, it\'s waste.

hence there should be a need for money, always something better to buy for everyone, and/or daily expenses.

Struggling for supremacy in a \"closed\" socioeconomic medium is better than struggling in an \"open\" one, because once you\'re at the top, you can\'t keep pushing higher and stay farther ahead. That allows you to concentrate on other things, like role-playing.

Now, getting rich can mean hoarding a lot of clubs or a lot of gold - it\'s still waste. Unlike other items, gold can\'t really be used up (unless you decide to melt it into a suit of armor, but that\'s beside the point), so if it comes out of the NPC economy, there should be a number of ways to throw it back in or remove it from the players\' pockets. Otherwise, if no NPC markets existed, gold would still be a waste product (it would have absolutely no use, although it could be traded around) and something like food, magical reagents, etc. would be best used as standard currency.

Associating every item with a one-shot effect might sound like a good, if wild, idea at first. Sure, if you could eat gold for mana, it would cut down on the number of GPs clinking around in players\' pockets... But that won\'t stop people from wanting to make a profit, and they\'ll still be able to hoard their cash.

players should never use a skill only in order to improve it.
If this rule breaks (like in all games), you\'ll get waste products, because people aren\'t crafting (for example) for the products/money, it means they don\'t need it.

It\'s not just the issue of improving the skill - if players gain an overall profit out of making two swords per second, they\'re going to keep doing it. In most MMORPGs, making a sword is almost always profitable, especially if it can be sold for a profit to an NPC market. Players should be prevented from constantly performing actions that provide a permanent benefit, be it cash, skill points, whatever...

\"Prevention\" can mean a penality or outright limitation. If you have to sacrifice as much as you gain in order to craft a sword, you\'ll think twice before doing it, especially if *you* make a sacrifice as well as your character. Again, in the real world, the reason people don\'t work all the time in real life is that they want to save their time and energy for more exciting things.

Well, sooner or later people become rich, you can\'t escape it, and it\'s not all that bad if it happens after a year or two.

Of course you can escape it! Even my teeny little githzerai economy can escape it. And I see no reason to assume that delaying a crisis is a way to solve it.

Let me give you three examples of economies that work a lot better than the typical pseudo-capitalism we find in most ORPGs: a communist/military economy, a pseudo-parecon and a democratic economy. In the former, most of the economy is invisible; you are told to work in a certain field (build X items of type Y, hunt X monsters of type Y), present the object of your labor to your administrator and get payed in coupons (mostly for perishables like food). Your ranking was based on how much you produced, and the equipment you were issued was based on your ranking: kill a lot of monsters for the month, and you\'ll be offered to trade in your measily cudgel for a fancy mace. However, if you slip up next month, you\'d have to hand over your mace and receive a cudgel again, simply because you\'re not fancy enough anymore. For things like custom equipment, you could requisition it, but you\'d have to pay a lot of labor for it, especially if you asked to own it for several months or a year. In this system, no one owns anything forever; what they own depends on how hard they work, but they can\'t stockpile anything. When you reach the top, you\'re compelled to stay on top by working just as hard... But there\'s no incentive to go further, because \"further\" doesn\'t exist.

A communist/military economy would have no need of money. There would be a bit of bartering, and favors might be traded around, but overall, nothing can be hoarded (not even coupons, unless the game allows you to forge them). If a c/m econ coexisted with a standard one, and the commisars/lieutenants didn\'t bother checking whether anyone was smuggling \"imperialist\" merchantise, the c/m econ would barely suffer a scratch from standard-econ influence.

A pseudo-parecon would work like this: you scribble down what you want to have at the end of every month. This can include furniture, a new house, food, whatever. The total gold value of this is calculated, and this value will be both your \"consumption quotent\" and your \"production quotent\". Namely, if you want to get your hands on a lot of stuff, you\'re going to have to produce just as much, or sell some of the stuff you already own back to the system. If you overproduce, you would either get some of your \"production quotent\" deducted from for the next month, or (more appropriately for an ORPG economy) some political benefit (like an extra vote). If you underproduce, then the \"production quotent\" will rise for next month, and you might end up not receiving some of the things you wanted.

Now, the public is going to be shown a list of how many new food items, houses, etc. are needed. Obviously, there will be too few blacksmiths to make enough swords, and too many potters for the ammount of pots needed. This interesting situation actually *requires* that people shift from one position to another and have a variety of skills, as otherwise, they might end up being useless for the economy.

In a democratic economy, everyone voted how resources would be distributed. The hard currency was votes, and economic power was political power. Crafters are still given a quota, and they have to follow it to the letter, because they\'re not given more materials than they need (presuming that all crafting processes were successful and resource efficiency was the same across the board). Waste would still exist, though it wouldn\'t be as excessive as in a standard economy.

Your point is ??

It would be against role-playing and realism to keep players from learning new skills. Lessons of any sort are actually quite fun when you\'re not herded into a classroom and told to absorb everything your teacher says.

The rule of proper division helps to ensure players relay on each other, and work flow accours.

Labor division would benefit role-playing, provided that the laborers would all be working together in the same workshop. I can\'t see how it provides any advantage to the economy, though, unless you take out the NPC element. Suppose you had no miners, only blacksmiths; suppose you could mine ore from the walls of your workshop, and you could sell your swords for fewer gps (to compensate the cash you had to pay for the ore). Nothing would change... Sure, there would be more blacksmiths in the world, but the same ammount of gold (waste) would be drawn from the magical NPC economy. The cash that used to be divided between a blacksmith and a miner is now divided between two blacksmiths.

I agree that there\'s potential for interaction when you can haggle, but otherwise, there\'s no beneficial effect on either the economy or the players when work is separated into mining and smithing (at least, if an NPC market selling iron ore exists).

There are lots of ways to encourage team play without forcing people into strict roles. Actually, as I pointed out in another thread, if you divide a task into several processes that must be well-synchronized, a single player won\'t be able to carry out these processes efficiently. It doesn\'t matter who runs which process, but people have to work together.

NPC rates help ensure borders in items prices, therefore making sure item prices don\'t drop below a certain value

They also provide \"welfare\" for those who overproduce, as they can give a lot of gold (waste) for a lot of useless items (note, also, that gold waste is lighter and more convenient to carry than item waste). Thanks to this economy, instead of trying to sell his uber sword of doom for an insane price, the average crafter will either mass-produce it and sell it to NPC markets, or (if the costs are too great) avoid making too many and settle for the most profitable thing. Sure, it doesn\'t boost his blacksmithing skill, but who needs blacksmithing skill when gold can buy you anything at the NPC market?

Yes large value difference between items slows down the process instead of eliminating it. than again if you eliminate it, it means you\'ll never get the good items.

There are plenty of better ways to get good items than building up your gold reserve by crafting, fishing or whatever. I can discuss them, if you wish (but it seems this post is already getting too big for its own good).

You know, an economy can stay alive without making it so extremely artificial ...

What would be so artificial about this economy? It\'s probably the most natural one anyone could foresee. Currency, NPC markets, these are artificial...

you are contradicting yourself by saying that we aren\'t playing games to escape into a setting we enjoy but rather enrich our own lives with this experience.

I\'m not. Joy and experience are vastly different (though not incompatible) things. Drugs can give you joy. A book can give you experience. The first is a means of escaping your life; the second is a means of enriching it. A bit of oblivion can help you trudge on through life with the same mental baggage, whereas what you learn from a book can promote and even determine your way of thinking, as well as your way of approaching different situations.

If a game would be exactly the same as real life, nobody would have a reason to play it

I\'ll answer this in the new thread. The title might be \"Is fantasy dead?\" or something like that, as I plan to discuss a variety of issues. Until I finish it, here\'s an exercise for you: Ask yourself why people would play a game that was identical to real life, and show me your answers. The only reason you haven\'t found any yet is that you haven\'t tried to.

I\'ll note here that you made a \"straw man\" fallacy: you took the scenario in which virtual reality is almost identical to real reality. It\'s not. You can\'t feel anything, smell anything or taste anything in the virtual world; you can\'t die in the virtual world (though your character can, if there\'s any permadeath); your reflexes aren\'t the character\'s; few if any of your ideals and beliefs come from the virtual world; you might not care about getting diseased and PKed all the time, because you\'re usually just logging on to chat; etc.
What all this means, among other things, is that you\'ll treat your character as something distinct from yourself. A lot of people I know laughed at their characters\' failures, and grinned whenever he got into trouble. Others enjoyed watching their poor character repeat \"I\'ll never tell you anything!\" while he was being tortured, well though he was suffering tremendously. Even if you want nothing more than pleasure, and aren\'t willing to RP or do anything beyond what the game directly offers, a \"tragic\" world can still satisfy you.

[Altharion]

i just came to this thread and i am WAAAY to lazy to read all this crap so could someone give me a summary?

 

[phervers]

Hi there, i wanted to add some of my thoughts. There is one game (hell i\'m talking about it again) where economy problem seems to be solved. Everything is based on some interesting rules, which fullfill most of the points you have stated.

1. It is very difficult to get rich, actually most of the players are very poor, and it\'s hard to afford proper equipment. And when leveling you continously need new equipment.

2. Mass production is non existent because of supply rarity, to craft uber items you need some very rare items. Crafting simple items is not very profittable and it gives you low xp.

3. Some uber items have prices which are unimaginable for a new player. Example, at lvl 50 you get about 20-30k credits for completing a mission. There are items that cost like 10-20 million credits. Most powerful items in game cost like 800 mil for an armor. So you\'re not likely to get best items in game, and if you want to try it will take you a long long time, like year of playing. Then you can start new character.

What i would like to see is player based economy, with large player base it should be possible to create such an economy. We need thousands of players to achieve that, but i think planeshift has a potential.

[BrotherCaine]

I personally hate the artificial floor-ceiling methods created by NPCs because they only work while your economy is simple, or until player-player trading reaches a certain point (p2p trading I think goes up exponentially with number of players).

There are programmatic methods that can be used to force economic balancing.  

1) inflation/devaluation:  Monitor the ratio ( total cash in system / number of characters + NPCs )  devalue currency with inflationary pressures when it gets out of whack (NPC prices go up)

2) entropic forces:   Infinite economies will always scale out of control without these.  Want to make sure that raw materials are expensive?  Make mining use up rock picks.  Too many swords being smithed?  Use up hammers.  Too much monster loot?  Weapon damage that costs money/materials to repair.  Too easy to repair weapons?  Have weapons degrade in effectiveness as they are repaired, and/or raise the costs for repair materials.  Eventually, good but rare weapons will only be pulled out to destroy monsters that you couldn\'t kill with your day-to-day weapon because repair costs will be to high unless the loot drop matches.

3) adaptive drops:  To encourage scarcity of high-power items, come up with the ratio of items/characters you think fits, and only let rare items drop when that many characters have been created.  Allow a more favorable ratio for common weapons.

4) adaptive pricing:  Drop prices for ultra-common items, and raise it for scarce items.  Track both NPC2PC sales and PC2PC trades for your economic data and use it to adjust pricing.  Have NPCs raise or lower their prices for scarce or common items.   If an item is too common, it\'s \'new\' price should drop below the cost to repair it.  Eventually the economy should effectively discard enough broken items to balance out the surplus (have NPCs buy the item for scrap value).