The real problem with trade
Printed From: Illyriad
Category: Miscellaneous
Forum Name: Suggestions & Game Enhancements
Forum Description: Got a great idea? A feature you'd like to see? Share it here!
URL: http://forum.illyriad.co.uk/forum_posts.asp?TID=666
Printed Date: 17 Apr 2022 at 12:55
Software Version: Web Wiz Forums 12.03 - http://www.webwizforums.com
Topic: The real problem with trade
Posted By: HonoredMule
Subject: The real problem with trade
Date Posted: 16 Jun 2010 at 18:06
|
A lot of people have made suggestions trying to solve the problem where trade seems to be dead, and most are blaming lack of sufficiently large trade centers, travel time, inability to determine the value of resource types, etc. That last one is close, but still not quite it. It's the value of gold itself. The basis of currency is that some resource have a stable value against which all other fluctuating values can be compared and traded. Gold intuitively makes sense but is actually utterly useless as a base of trade. All the resources are infinitely renewable, but gold is the fastest growing of them. Gold income increases almost exponentially compared to the other resources as population rises, putting "inflation" through the roof. In order for trade to have a base currency, that currency needs to be limited to a maximum quantity based on total world population. It can't be something that as many players as wish it can just endlessly accrue faster than they can throw it away on blow and hookers. For gold to have value, it must have constraints that conform it to the traditional 0-sum game, where one man's success must be connected to another's failure. To establish that, spent gold has to go somewhere, and that somewhere has to be able to run dry when its supposed to come back. Such a system would not be computationally cheap, I know. Everyone's gold income would have to be capped or scaled according to availability, and availability would be a calculation based upon the town's percentage of world population, the world-total military/diplomatic upkeep, and the (possibly negative) global stockpile size when not all gold is in circulation. "All gold" would itself be a periodically changing number based on population, and therefore the stockpile amount could be negative when population drops and gold in circulation is already over-extended. To be a little more specific with a very simple (and of course untested) model: wpop = world's aggregate population wgold = sum of all saved gold in the world wkeep = world's aggregate upkeep // should be updated at least hourly, and cascade to updating all town incomes tcut = town's population / wpop stockpile = 100 * wpop - wgold // could be just updated daily, can be negative, which means negative inflation town income = min(tpop * taxation * wkeep, current income calculation) + tpop * stockpile In theory the above will put the gold in circulation through a negative feedback loop trending toward the population-based limit, and at the most expense to players with the highest spending (upkeep). It could instead cause the stockpile size to flip daily (or however often the stockpile is recalculated) by ever larger numbers causing wild fluctuation and break the whole system, or have some other balance issue. But if so, it's just a matter of finding some altered version that maintains the balance properly (and could be as simple as making world upkeep and world stockpile always update at the same time). This formula only serves as a theoretical starting point. At any rate, such a system properly tuned would create a much more realistic economic balance where inflation is bound to the actual growth of the game, and the ability to keep gold will no longer be more valuable than its usefulness in trade. The amount of gold in circulation could even be manually controlled based on market analysis by the devs to help maintain that balance and foster trade. If they were to publish the total amount of gold, or tie it automatically to population, players chart out the actual global inflation themselves, lend their expertise as economists to the devs, and start more advanced financial operations such as investing in shares/stock and venture capital. ---- Once the currency problem is fixed, many other noted problems would solve themselves within the existing mechanics. Gold would more meaningfully limit war operations without rich backing by non-militaristic support. The herald could start publishing meaningful economic information based upon the "daily close" of trading and state of the new metrics being used/managed. People who wish to run shops could set up regular supply lines, invest in futures, sell stock/shares to fund startup, etc. As a direct result of the increase in middle men, the "insurmountable" distance problem would dissolve. It would then be prudent to allow offering "perpetual trade offers," by which I mean a trader puts up an offer which when accepted is automatically replaced with another identical offer so long as the caravans and resources being sold are available. When the potential profit in running trade operations becomes realizable, the people who then devote themselves to trade will finally gain enough experience to start establishing market pricing. When gold starts to hold its value, it becomes worthwhile to run banks and offer loans for wars or venture capital for startups. People will start trying to stockpile gold for something other than saving it for a rainy day (the eventual short-term growth of armies to upkeep well beyond reasonable taxation). Fix the currency, and trade will become the rich and rewarding facet of the game as it should be, finally able to rival war as a meaningful first-class mechanic within the game. |
Replies:
Posted By: waylander69
Date Posted: 16 Jun 2010 at 18:56
|
Very good post HM as something does need to be done about the trade system, however i think this one might prove hard to put out to everyone, for instance what happens if some people just hoard the gold, this would create a shortage therefore would increase its value, people who have 2 accounts running with a large number of cities would not need gold as much for trade as they would just trade between their own cities for the resources. A base system needs to be put in place where people cant ask for thousands of resources by offering just 1 gold as we see almost every day. Not an easy one to work out by any means.....
|
Posted By: GlyphGryph
Date Posted: 16 Jun 2010 at 19:00
|
I disagree - the problem with trade is simply that is hands down less effective than making your own items. Construction Infrastructure is cheap and relatively quick - trade is expensive and extremely long. |
Posted By: waylander69
Date Posted: 16 Jun 2010 at 19:16
| That all depends on what your after, im sure 99 sets of plate armor cant be made in a day but it can be traded for...... |
Posted By: GM Stormcrow
Date Posted: 16 Jun 2010 at 19:37
|
A very interesting post, HM. Here's what we're thinking, currently: Illyriad's Economy Needs To Be Monetised Illyriad's Economy is currently a barter system. We're looking to monetise the economy, where everything is bought and sold (for Gold) at Trade Hubs spaced around the kingdom, replacing the current barter system entirely - which will cease to be supported via ingame mechanisms (though players can always trade directly with one another, ofc). We're examining all sorts of additional options around this; from crafting (bonus-giving items to equip commanders, divisions, armies and possibly even towns with) to directly selling units and/or hiring units as mercenaries - all to be conducted at these hubs. There will be *many* new skills, new caravans, new caravan upgrades, new units and all manner of wonderments including new items (and item classes), including crafting components. We believe there will be considerable price differentials between the hubs, and we will therefore provide various mechanisms for players to take up the lifestyle of being a trader/hauler/market manipulator. We also believe that NPC Factions will have a strong role to play in these Trade Hubs. ---- Just thought I should mention the above as it will have some serious ramifications on, well, the whole game; and it'd be wrong to look at Trade as it currently is without some forewarning of where we're going to take it. Regards, SC |
Posted By: GM Stormcrow
Date Posted: 16 Jun 2010 at 19:40
|
Oh, and I should add that we're acutely aware of the infinitely inflationary pressures on resources and gold; however these can be managed if we get the balance between faucets and sinks broadly correct. |
Posted By: HonoredMule
Date Posted: 16 Jun 2010 at 20:46
And why is it less effective?  I posit that it is because all of the previously identified issues with trade, and that those issues are symptoms of lacking a stable currency. "cheap" and "relatively quick" are in fact both very relative, and constrained enough that a healthy market would change that tune. I have 7 cities (one of which at max possible food production and unable to grow further) and I can tell you there is actually great need for trade, but everyone is a buyer and not a seller. Population is limited by food upkeep, which in turn limits advanced resource production well below what one city can consume in unit production. It takes around 2 cities to supply one for constant war production, and needs change with unit queues (diplo/military/siege). Every powerful player would love that second support city to be someone else's so that as many barracks as possible can be kept in constant production. But one of the symptomatic problems is that everyone is interested only in advanced resources, unwilling to trade away the ones they have as they need all they can produce and more besides. Level 20 buildings still don't bring a city to within self-supplying that resource, let alone overage for trade. Population limits prevent having level 20 buildings for resources outside of the city's specialization, except maybe on the 7-food-plot tiles. Merchant players can't ask for gold because they can't use gold to re-stock when it's not a valued resource, especially for the smaller players who are more likely to be willing to produce equipment for others. If gold held value, militaristic players would spend it even long distance for equipment, and possibly trade resources locally for gold to fund that spending and upkeep instead of supplying growth to new cities, but there's currently way too much variance between resources and equipment for players on both sides to believe they're getting a fair deal. Currently no one will trade base resources for equipment until they cannot expand their empire any more, and that's a long way off for everyone.
I'm pretty sure hoarding gold cannot be a problem for several reasons: - No matter now much gold is hoarded, every city gets its cut of the steady flow back into the system from military and diplomatic upkeep (and gold cost of resource/unit production should also go back into the global stockpile). Growing famine hits the hoarder harder than the spender, who must keep reducing his upkeep to maintain positive income else allow the system to re-distribute some of his wealth. The spender on the other hand built his army when gold was worth less, and though he has fewer liquid assets, he has greater wealth in military assets. - Hoarders will find that gold sitting in stockpiles only increases military cost. The longer and harder you hoard gold, even without attracting attacks, the further behind you will find yourself against those who invested it wisely in either business ventures or putting troops in the field to earn their upkeep. - When gold becomes truly valuable, hoarding it and the requisite limits put upon upkeep makes you a juicy target, as that big gold stockpile is now worth the costly effort to thoroughly plunder. Military spenders gain the advantage but by upkeep are the biggest re-distributors of wealth, and their exploits of opportunity will limit the ability for gold to stockpile. - High taxation for hoarding means low resource production which should also limit equipment production. If it does not, the solution is to start increasing secondary resource production time according to taxation, further forcing the tradeoff between military and economics. Thus handled, gathering more gold requires spending more gold to build a protecting army and the value of equipment also stabilizes and forces the hoarder to spend. - Trade score can switch to measuring wealth/income like real economic markets, rather than focusing entirely on the somewhat meaningless metrics it follows now. As a result it will help identify player stockpiles and targets of opportunity. Bottom line, if it's a zero-sum game, it works precisely like all the real-world currency does, and must by necessity actually work like real-world economics which are well established and understood. Wealth will not distribute evenly, but it will continue to redistribute and no one is safe from losing it by military OR economic means. Everyone's income comes out of everyone's expense, and on a global scale that's actually a very hard balance to tip. He who succeeds only makes an enemy of the entire impoverished world, but he really CAN'T succeed. His ability to gain and maintain a lead is constrained by his GDP (gross domestic product, in this case population) and every other player in the game can eventually match that, especially as players start hitting practical growth limits.
Except as a mechanism for asking mates for a handout, I find this behavior reprehensible, but not problematic. It has no impact if people don't fill the requests, and if they do so accidentally, they can recover their losses in blood...a fair risk to the people using this to exploit carelessness and therefore unwilling to return the resources. |
GlyphGryph wrote:Posted By: HonoredMule
Date Posted: 16 Jun 2010 at 20:56
Thanks for the input, SC. This sound like ultimately a much more complicated and delicate system with regard to accommodating continued addition of features that impact the mechanical sinks and sources. I fear it may not be capable of actually solving the inflation problem, as moving money around doesn't create any new global sinks unless NPC trade serves that role, making it a hard component to balance against gold-reducing needs and player-competition for trade. Of course you have more data to mine for balance metrics than I. I shall watch the outcome with interest.  The non-quoted new uses for gold (particularly mercenaries) are in my opinion a very welcome addition not closely related to economic balance.Waylander, I forgot to mention one point: hoarding will probably not be able to keep up with inflation caused by continued world growth in any form of stabilized value system, which means people will actually fall behind in wealth if they do not find more effective means of accruing gold than simply keeping it. |
Posted By: GlyphGryph
Date Posted: 16 Jun 2010 at 21:11
|
"directly selling units and/or hiring units as mercenaries" It may seem odd, but you don't know how much I've wanted something like this! Especially if you can "rent" them instead of just "selling" them (like actual mercenaries) |
Posted By: col0005
Date Posted: 17 Jun 2010 at 01:59
|
I just want to say that trade hubs with infinit resources but prices that fluctuate are probbably being explored too. If crafting of magic items requires a LOT of gold and hiring mercinaries requires a lot of gold and there is a sifficinetly large gap between buy and sell prices at trade hubs then money will regain some value. Gold transport may have to become easier though. The idea of changing the mechanics of how gold is obtained is a terrible idea in that new players will be even more severely disadvantaged as older players will certainly have large stockpiles saved up, (that is unless all accounts are re-set to zero). How much gold is saved up in the coffers of the White or harmless alliances? however if say 10,000 gold can be transported by the first caravans (gold is small) and so 400,000 by each caravan at top levels then gold can once more be used as a form of trade. |
Posted By: HonoredMule
Date Posted: 17 Jun 2010 at 07:46
|
Why do you think being able to transport more gold is going to help?
The very desire for such is only indication of how much gold's value has
plummeted, and it needs value restored, not perpetually allowed to
spiral further downward by moving ever greater quantities. Gold is not small. Gold the same size in units as every other resource, and being defined arbitrarily as a number like every other resource, does not need to complicate transportation systems. It is however worthless, which makes us think of gold units as being some tiny quantity. How small does a unit of gold have to be that it be deems worth less than a unit of wood? Gold is normally worth far more whether compared by mass, volume, shininess, or the gleam in a gold digger's eye. But how can gold be valuable at any relative size when we have so much of it? The other basic resources are spent far more, yet gold is the resource we can gather the most by at least an order of magnitude. It won't matter how much we can move or spend it unless the desirability of spending it actually exceeds our ability to harvest. (Remember that by natural, intuitive cost-benefit analysis, as we gain more of the things for which we can spend gold, the price we are willing to pay for more decreases--and more so when currency supply dwindles. Equilibrium is not reached until our strong appetites exceed our ability to sate them. Income has to be matched by expense before we find the prices too steep.) Given how much taxation can increase income, that would be one heck of a continuing long term expense. Even the desire to hoard a resource dissipates when we realize it doesn't hold its value anyway. No one is hording gold though--why would they? I have a ton, and I'd gladly spend it on everything under the sun because I have so much and it is useful only as a means to an end. But of course no one wants it because it's as worthless to them as it is to me. At the quantities I'd have to spend to gain anything of worth, I might as well just keep it for upkeep buffer on a rainy day, like if I'm besieged and suffer a major population drop. But that's not the same as hoarding. Consider mercenaries as a spending option. At ten times the gold upkeep, I wouldn't use them regularly. At 20 times the gold upkeep, I wouldn't use them ever. But after weeks of constant production, I could still easily double my army and handle the upkeep without a negative balance. To me--one of the largest players (top population) in the largest alliance with the highest potential income--hiring mercenaries is the least necessary. But you smaller players are welcome to halt your economic growth to fund a war against me while I continue to grow and match your armies with drastically lower taxation. And if I do get in a pinch, maybe I'll hire 10 times as many mercenaries as you for a short-term operation. I'll even take fewer losses having my force concentrated into a single attacking army. If you want to lessen the imbalance between players, increased spending options will do the exact opposite. Scaled income will do neither. A self-balancing system like I propose is pretty well guaranteed to work (by which I mean set a slow-moving and very reliable value for gold, based whatever is defined as the per-unit population circulation) and does not alter the existing range of variance in player incomes, regardless of existing stockpiles. A system based on increased opportunities to spend gold into circulation sinks might work on its own as well. Possible side effects include breaking other balanced constraints, particularly turning military equipment into unlimited* resources for everyone developed enough to stop building a city and crank up taxation...that would kill trade like nothing else possibly could. *by unlimited I mean able to be acquired faster than it can be spent on unit queues and without aid from other players or supporting towns, making every developed city fully self-sustaining without specialization. ---- I should also note: scaled income as the balancing economic factor wouldn't have nearly so large an impact on current incomes as you seem to think, col. In fact it would even increase incomes if the balance point isn't reached yet, and it quite possibly isn't. Let me paint the picture a little differently. Suppose everyone has upkeep and normalized production expenses equal to their income. This is an unrealistic state of perfect balance, but my point is that at this state, with a current world population of 2,314,975, everyone can have their cut of the world's global supply of 231,497,500 gold as an operational buffer. Assuming perfect distribution, that means a 6,000 population player has 600,000 gold to smooth out market fluctuations. That's probably actually too much and perhaps the gold/population factor should be more like 20 instead of 100 (giving a 6k pop player 120k gold). The more I think about it, the more convinced I become that you cannot have a proper economy without a properly limited resource. Until you know with reasonable accuracy and consistency how much gold is in the world, you don't know what a given portion of that gold is worth. Anything else is just a perpetual arms race, and people don't trade during an arms race--unknowns aren't trade-able, and producing your own is always fastest. |
Posted By: col0005
Date Posted: 17 Jun 2010 at 13:21
|
look you may be right, however I know that I have had a large sum of gold stockpiled and i'm not even a large player. I'm sure a lot or even most large player have over 10,000K gold, if gold is made slightly harder to come by this will lead to further inequality. With your theory of infinit available resources killing trade then your wrong. If everyone only buys from the trade hub then eventually no player will want to, as the price will become too high. If your caravans had infinit capacity for gold and it took almost no time to trade yet cattle cost 100K each how would you buy? or would you be more likely to sell for that price? The idea was that as an item is bought then its value in gold will increas, as it is sold its value will decrease. |
Posted By: waylander69
Date Posted: 17 Jun 2010 at 13:26
| Gold may be small but it weighs a lot......i value gold in favor of 2 to 1....i offer 6K of gold for 3K of resources...works for me as all my trades go... |
Posted By: Thexion
Date Posted: 17 Jun 2010 at 13:54
|
Higher upkeep with troops in when towns grow bigger and when the city number grows because of corruption. That is the Civ style solution is anyway to excess cash flow. How in practise that would work I don't know. When rightly balanced.. maybe. |