# Economic System - Your thoughts?

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Hey guys, I've been thinking about how the economic system I want to implement in my MUD. I was thinking of using a pyramid idea for the currency. Let me explain this, because I know "pyramid idea" is not descriptive. What would happen is, whenever new currency is needed (more than X players register, everyone is poor, I feel like it), raw materials, such as a valuable ore, will be added to the world. A certain player class is responsible for mining this ore. After being mined, it can be refined (by another class), further refined (by another class), then made into coins (by another class). This system would not only allow players to interact in the economy, but it would heavily encourage it, as players are responsible for creating the money in the economy. However, I realize there are several pitfalls with this system. To prevent these, there will NPC's who are willing to buy/trade the raw materials. However, using the NPC's will be less profitable than collaborating with other PCs. To allow the economy to be somewhat dynamic, the NPCs will each offer different prices from each other and for each type of material. This amount will change occasionally, to simulate market conditions. I realize a very careful balance with supply vs demand will need to be found to keep this system in check, but I figure that being able to regulate supply (through sinks and fountains), as well as value (through the NPCs), should allow me to keep the economy pretty stable. Thoughts/Comments/Criticism?

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 Original post by samozI was thinking of using a pyramid idea for the currency. Let me explain this, because I know "pyramid idea" is not descriptive. What would happen is, whenever new currency is needed (more than X players register, everyone is poor, I feel like it) raw materials, such as a valuable ore, will be added to the world.

Being poor is relative, also so is being rich. If you flood the world with valuable items that everyone can access everyone is going to become rich, which will leave them once again poor.

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 A certain player class is responsible for mining this ore. After being mined, it can be refined (by another class), further refined (by another class), then made into coins (by another class).

This is called the multiplier effect in economics. Keep in mind that any work people are doing and getting paid for is a service they are offering, will there be enough demand for their services. Also could demand be relatively to great compared to cost of the service.

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 To allow the economy to be somewhat dynamic, the NPCs will each offer different prices from each other and for each type of material. This amount will change occasionally, to simulate market conditions.

To simulate market conditions the NPC's should be paying based upon recent local transactions for the goods. (The past transactions for price reference can be between PC and NPC or PC and PC, it doesn't matter, but should average over a few past transactions if possible otherwise prices will swing too fast.)

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You could just let supply and demand sort it out.

More coins, ceteris paribus, means inflation. This devalues the currency. This makes minting coins less attractive (more expensive in nominal terms for the same nominal output). Thus, price levels will be kept roughly in check naturally so long as minting is not too cheap in terms of resources.

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 This is called the multiplier effect in economics. Keep in mind that any work people are doing and getting paid for is a service they are offering, will there be enough demand for their services. Also could demand be relatively to great compared to cost of the service.

That's not the multiplier, that's merely different stages of production. The multiplier effect is AD/GDP rising/falling by more than the net change in injections/withdrawals that causes the change. Totally different things.

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 To simulate market conditions the NPC's should be paying based upon recent local transactions for the goods. (The past transactions for price reference can be between PC and NPC or PC and PC, it doesn't matter, but should average over a few past transactions if possible otherwise prices will swing too fast.)

Basing it on PC to PC transactions is open to abuse and simply failing - players often sell things at uncompetitive rates.

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Original post by Captain Griffen
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 Original post by moomin

That's not the multiplier, that's merely different stages of production. The multiplier effect is AD/GDP rising/falling by more than the net change in injections/withdrawals that causes the change. Totally different things.

It is exactly the multiplier effect, and for the reasons you stated. He is putting in an investment (the valuable ore) and due to his multi-tiered system (the ore being refined) the increase to AD is the value of the ore (from the original sale) plus any the value of any further services performed on the ore, of which, he stated many.

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 Basing it on PC to PC transactions is open to abuse and simply failing - players often sell things at uncompetitive rates.

That simply doesn't make sense, people do not sell things at uncompetitive rates. Firstly, uncompetitive means they are selling at rates too high and so not selling - i.e. not competitive. If they are selling to high then they won't shift it and will likely revise their pricing. If they sell something cheap (i.e. competitively) it has no value to them. If they sell it under the going price (read: competitively) that is fine, it does bring down the value of the item, but that is the value of them item and means there is a greater consumer surplus. Players will sell the item at its value (the value to get the item) as if they over price they can be under-cut, and if they under price they will lose wealth due to opportunity cost. Making NPC's buy items for inflated prices is fine, but it does not simulate an economy.

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Original post by Moomin
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Original post by Captain Griffen
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 Original post by moomin

That's not the multiplier, that's merely different stages of production. The multiplier effect is AD/GDP rising/falling by more than the net change in injections/withdrawals that causes the change. Totally different things.

It is exactly the multiplier effect, and for the reasons you stated. He is putting in an investment (the valuable ore) and due to his multi-tiered system (the ore being refined) the increase to AD is the value of the ore (from the original sale) plus any the value of any further services performed on the ore, of which, he stated many.

That's not the multiplier. The multiplier would be the additional extra increase to AD due to the circular flow of income, rather than simply in the production of money.

The valuable ore isn't investment - it's additional land being utilised.

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 Basing it on PC to PC transactions is open to abuse and simply failing - players often sell things at uncompetitive rates.

That simply doesn't make sense, people do not sell things at uncompetitive rates.

I'll stop you there, since the rest of it is based on the presumption that people are profit maximisers in MMORPGs.

They aren't. Some mugs will always buy way above the realistic price, or simlpy because they are in a hurry, and people sell things at below market prices to their friends - transactions such as that shouldn't really be included.

The bigger point would be selling things between themselves at insane prices (since it is within a closed group, it costs them nothing), then selling it to the NPC at the same price, making vast amounts of money.

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Well when I was talking about having dynamic NPC values, I was assuming that the NPC value would keep the price in check to an extent. Obviously, if a player can get it cheaper from an NPC than from a PC, he will. But to make it interesting, the NPC's won't have unlimited supplies, unlimited money, and not all NPC's will have all items.

This would make fluctuations occur depending on NPC supply and location of the player.

And an interesting point has been raised, regarding how profitable it is to mint money vs. how much a coin is worth. That will be a point that needs to be balanced...

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 That's not the multiplier. The multiplier would be the additional extra increase to AD due to the circular flow of income, rather than simply in the production of money.The valuable ore isn't investment - it's additional land being utilised.

It is an investment into the economy, because it wasn't there before - he's adding it. Also it is the multiplier effect because AD increase by the value of the ore and the value of the multiple services that he stated would be demanded.

This is because the original finding of the ore will result in more income for the player. The player then has more money which increases the flow of income.

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 I'll stop you there, since the rest of it is based on the presumption that people are profit maximisers in MMORPGs.

Nope I'm not making that assumption. As I said, uncompetitive prices are prices too high that people can't afford. Read the rest of my post and try writing something that makes sense.

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 They aren't. Some mugs will always buy way above the realistic price, or simlpy because they are in a hurry, and people sell things at below market prices to their friends

Exactly which will average out to the items real price. This all happens in the real world to you know ...

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 The bigger point would be selling things between themselves at insane prices (since it is within a closed group, it costs them nothing), then selling it to the NPC at the same price, making vast amounts of money.

An algorithm to accurately set the market price for goods would be very complex. Finding an accurate price for a good is a very hard task, especially new goods to the market, so there is always going to be pitfalls. My example was just a simple solution, one that could easily be improved upon to work more effectively.

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Original post by Moomin
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 That's not the multiplier. The multiplier would be the additional extra increase to AD due to the circular flow of income, rather than simply in the production of money.The valuable ore isn't investment - it's additional land being utilised.

It is an investment into the economy, because it wasn't there before - he's adding it. Also it is the multiplier effect because AD increase by the value of the ore and the value of the multiple services that he stated would be demanded.

This is because the original finding of the ore will result in more income for the player. The player then has more money which increases the flow of income.

Yea, which will set off a multiplier effect (albeit probably a small one, given the high marginal perpensity to withdraw in most MMORPGs). It is not in itself the multiplier effect, though. This isn't important for what we're discussing.

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 I'll stop you there, since the rest of it is based on the presumption that people are profit maximisers in MMORPGs.

Nope I'm not making that assumption. As I said, uncompetitive prices are prices too high that people can't afford. Read the rest of my post and try writing something that makes sense.

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 They aren't. Some mugs will always buy way above the realistic price, or simlpy because they are in a hurry, and people sell things at below market prices to their friends

Exactly which will average out to the items real price. This all happens in the real world to you know ...

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 The bigger point would be selling things between themselves at insane prices (since it is within a closed group, it costs them nothing), then selling it to the NPC at the same price, making vast amounts of money.

An algorithm to accurately set the market price for goods would be very complex. Finding an accurate price for a good is a very hard task, especially new goods to the market, so there is always going to be pitfalls. My example was just a simple solution, one that could easily be improved upon to work more effectively.

Not really. You'd need something considerably more complex, and it would still be foolable. A better approach would be using players' own initiative to keep NPC prices in check, and base it on NPC-PC interactions only. (This would only work if the number of players and transactions were large enough, which is a fair assumption to make.)

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 And an interesting point has been raised, regarding how profitable it is to mint money vs. how much a coin is worth. That will be a point that needs to be balanced...

Balancing that is very easy. It will balance itself out eventually, and the balance that is there will determine the worth of currencies. Roughly where normal profit results from mining+minting (so it will depend on how profitable other uses of time are, etc.).

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In MMOs gathering raw materials is usually very easy and cheap. This means that no matter what you set the price at (without constant retuning), it will always devalue to the cost of producing it. Since this is not much effort, the price of these raw materials will drop.

Now, if you made gathering these raw materials harder and more expensive, then the cost will not drop as far.

In real life we assign values to gold and other rare items beyond what it realistically takes to produce them, because they are rare and in demand.

So the value of an item is based on the cost of production and an artificial assignment based on desirability and rarity (unique items are by definition extremely rare).

Mines that produce identical objects (minerals) will not have this rarity factor and so will tend to devalue to the cost of production.

Many implementations of mining try to introduce a rarity into mining simply by not having it spawn as often. This is bad, as all it takes is enough people to go out and gather and horde it and it then devalues because it is no longer rare. So an artificial rarity will not work in the long term.

What you need is a negative feed back loop to control the rate at which players will seek out the resources. What you need to do is introduce a cost to the extraction process. Also, make a chance that they can loose their investment in that extraction. This cost, not the rate of respawn will direct the value of mined resources.

Imagine two different resources that respawn at the same rate and have the same amount in the game world. We will call the first one Alphernium and the second Betaite.

Alphernium has no real cost to gather other than the time taken to go out and get it.

Betaite on the other hand cost around 10gp to extract and you have a 50% chance that the extraction won't produce anything.

Players can freely exchange these resources for other good and services and the prices of these are not set by the game designers, but by the players themselves (think of an auction house setup).

Which of these two resource would end up being the more valued one?

What would the value of Alphernium settle on? (it would settle at less than 10gp and most likely settle close to 1gp - assuming that 1gp is the minimum value that something can attain)

What would the value of Betaite settle on? (it would settle at greater than 10gp and would end up being around 15gp to 20gp. Any less than this then there would not be enough to warrant gathering it, any more and the demand would encourage people to go out and get it which then reduces the demand and reduces the value).

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So your suggestion is to make resource gathering/processing more expensive.

Here's an idea then. Since I want people to get better as they level up, I could make a player under level X only be able to gather resource A, and only with a 50% chance of getting a usable sample. However, as the player progressed, they would get a better chance at gathering usable samples. Also, they could gather different ores. Since only higher levels could gather these resources, this would give them value. Making the higher levels of resource more difficult to gather, even for high levels, could also make things more valuable.

This policy could carry over to the other stages of production. Higher levels can refine resources more efficiently. A level 1 character may only get 30% efficiency when refining materials, but a level 10 character may get 50% efficiency (or something like that.)

Thoughts? Would that pose a problem with higher level characters flooding the market with currency though and then making it impossible for low level characters to do anything?

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I think basing mining on level is a mistake. You don't have the same level of control of how many characters are at each level as you do the amount of resources left in a spot. It also makes high level characters more self-reliant, reducing the incentive to interact with and help newbies.

I think forcing players to spend resources to mine is a good idea, though. It can be direct, say, spend one pickaxe for every 200 gold collected, or it can be done by making the place hard to reach.

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What about tools deteriorating faster/slower depending on level then?

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 Here's an idea then. Since I want people to get better as they level up, I could make a player under level X only be able to gather resource A, and only with a 50% chance of getting a usable sample. However, as the player progressed, they would get a better chance at gathering usable samples. Also, they could gather different ores. Since only higher levels could gather these resources, this would give them value. Making the higher levels of resource more difficult to gather, even for high levels, could also make things more valuable.

There are one off costs (like attaining a level) and ongoing costs. One off costs do not make something more valuable. What you need is an ongoing cost to extract the resources.

For a real world example: http://reprap.org/bin/view/Main/WebHome . This is a device that people are constructing so that it can make copies of itself.

Now, if you had to buy all the components for it each time you wanted another (a non replicating device), then each time it would cost you money. This is an example of an ongoing cost. If each machine cost $600 then for two machines it costs$1200.

However, with the Reprap, it can make copies of itself (well, not 100% yet, but they are getting there). So once you have bough one, you don't need to buy any more. You can just print a new one. The only ongoing cost is the raw materials (which are fairly cheap and they are working on ways that you can print your own machine to make the raw materials from the base materials).

This is an example of a one off cost. Once you have paid for the machine more machines are no more expensive. If one machine costs $600, then when you make the second machine it will only cost$300 each machine (plus the raw materials).

Notice with the one off cost that the more your produce the less expensive each one becomes.

This is why you need to make the raw materials have an ongoing cost or that once they have achieved the one off cost, they will just keep producing and making their initial investment multiply.

You can include one off costs, but you just can't use them to control the value of something.

(oh, and btw, when they iron out a few more of the difficulties with the rerap I will be so getting one ;D )

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 Original post by samozHey guys, I've been thinking about how the economic system I want to implement in my MUD.I was thinking of using a pyramid idea for the currency. Let me explain this, because I know "pyramid idea" is not descriptive. What would happen is, whenever new currency is needed (more than X players register, everyone is poor, I feel like it), raw materials, such as a valuable ore, will be added to the world. A certain player class is responsible for mining this ore. After being mined, it can be refined (by another class), further refined (by another class), then made into coins (by another class).This system would not only allow players to interact in the economy, but it would heavily encourage it, as players are responsible for creating the money in the economy. However, I realize there are several pitfalls with this system. To prevent these, there will NPC's who are willing to buy/trade the raw materials. However, using the NPC's will be less profitable than collaborating with other PCs.To allow the economy to be somewhat dynamic, the NPCs will each offer different prices from each other and for each type of material. This amount will change occasionally, to simulate market conditions.I realize a very careful balance with supply vs demand will need to be found to keep this system in check, but I figure that being able to regulate supply (through sinks and fountains), as well as value (through the NPCs), should allow me to keep the economy pretty stable.Thoughts/Comments/Criticism?

I think it would be very costly to manage or program and with little benefit.

I also think you need to establish how your overall economy is going to work before you try and develop a method of players creating currency. A noble effort but a very high end endevour.

So first things first. When it comes to an MMO/MUD economy you want to establish how value is being brought into the game world(faucet) and where it is going. ie how is it accumulating in the game world(buckets) and how is it leaving the game world(drains).

From what I can tell from your posts you have mining as a faucet. The value first goes into bucket one. Then players can spend time to put it into bucket two, then bucket 3, and so on until it is in a bucket that is somehow considered currency in a way that the other buckets are not. Maybe it is more portable, maybe it can be used with NPCs more efficiently, or something else.

So this is basically all I know about your economy. I don't really know all that much about the use of this currency. I don't know how players are able to trade without it. I am not sure why they will bother going through all of this to get the currency. I don't know about the other buckets or drains in your economy.

MMO/MUD economies can be hard to talk about without the basics established first IMO. I personally don't see why you want a player developed currency like you have created. What are your goals? How does it fit in with the overall economy? What is your philosophy on player rewards in the long term? What is your philosophy on liquidity?

Now I know this is just a MUD and not some AAA MMO or anything but I think establishing the basics to your economy is mandatory and will make everything a lot easier.

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I guess I wasn't too specific in a few ways, as you pointed out.

I wanted the player-created currency system since I think it would encourage player interaction.

As for what is considered currency, I figured that anything along that stage of production could be considered currency. However, higher stages of production would be more compact, i.e. a player can carry more coins than he can carry giant chunks of ore.

As for the rest of the economy, I was planning on implementing a barter system that will function with NPCs and PCs. However, due to the nature of barter, different people provide variable worth for the same items. Currency is an attempt to provide a standardized unit of worth.

It could also make for some interesting buy-low sell-high situations when moving between different regions (each who buys/sells the same item at different prices)

I plan on providing other faucets/buckets/drains through quests, tournaments/games, purchase of special items/houses, guild registration, etc.

I was more just curious about a different approach to currency, but I plan on including many of the traditional faucet/bucket/drain systems.

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 Original post by samozI guess I wasn't too specific in a few ways, as you pointed out.I wanted the player-created currency system since I think it would encourage player interaction.As for what is considered currency, I figured that anything along that stage of production could be considered currency. However, higher stages of production would be more compact, i.e. a player can carry more coins than he can carry giant chunks of ore.As for the rest of the economy, I was planning on implementing a barter system that will function with NPCs and PCs. However, due to the nature of barter, different people provide variable worth for the same items. Currency is an attempt to provide a standardized unit of worth.It could also make for some interesting buy-low sell-high situations when moving between different regions (each who buys/sells the same item at different prices)I plan on providing other faucets/buckets/drains through quests, tournaments/games, purchase of special items/houses, guild registration, etc.I was more just curious about a different approach to currency, but I plan on including many of the traditional faucet/bucket/drain systems.

Well I think you chose a very complicated, heavy handed, and not all that fun way to try and encourage player interaction.

1) Very complicated. Developing a player created currency is going to be very difficult as it will have a very large impact on money supply and liquidity for players, especially new players.

2) You force players to interact through limitations placed on their skills. I am ok with forcing players to interact but it is important to be aware of what your design is doing. While forcing players to interact is potentially ok, not all players will like it.

3) Fun? There is a processing step in there that sounds horribly boring to me. I don't know about you but when I want to escape into a game world I don't get all that excited about the idea of processing ore to some other form of metal so that maybe somewhere down the line it can be made into a coin. Combine this with #2 and you have a rather boring game mechanic for someone IMO.

Now when it comes to faucets/buckets/drains and developing a currency, your currency is a bucket. It is a special bucket that is meant to help you get what is in other buckets. So this currency will need to be demanded by the people filling all those other buckets, hopefully directly.

For example if you are a sword maker you need currency as an "ingredient" to your production. Maybe you have to rent/pay taxes on the land your shop is built on.

I would also try and think of a more fun way of briging currency into the world. There is a reason gold drops off of wolves in many MMOs. Killing that wolf is generally more interesting than processing some ore.

Now maybe killing wolves is not your idea of fun. Well what is? Now make that your faucet for currency. Just my two cents.

For example you can use your basic idea about mining gold and processing it into currency. Make the mine a capture point like a DAOC keep. Make the mint another keep. Make the road from mine to mint dangerous. Now you have three relatively interesting things for players to do. Capture the mine, capture the mint, and protect the road. What happens when the mine is not owned by the same people that own the mint?

What if there are two mints close to one another? Two possible roads?

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 I would also try and think of a more fun way of briging currency into the world. There is a reason gold drops off of wolves in many MMOs. Killing that wolf is generally more interesting than processing some ore.Now maybe killing wolves is not your idea of fun. Well what is? Now make that your faucet for currency. Just my two cents.

Well, whenever I play games, I like to be a crafter, so processing ore and making coins would be fun for me. :)

I like your idea of having to conquer the mine, fight through the road, and then use the mint. This is similar to my original idea, but would allow players who like to fight to get involved, while still maintaining the fun-ness for people who like to craft.

Possibly keep certain places, such as the mint, under NPC control, so lower level players or player who don't want to fight can use the mint services, but allow the NPCs to be hostile, so that higher level players and/or fighters can attack the mint and use it themselves, instead of using the NPCs...

And I think I may have overstated the importance of the players creating the currency; it's not the only way I wanted to introduce currency. I just liked the idea that since coins are just metal, given enough time and/or skill, a player could actually make money themselves.

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 Original post by samozAfter being mined, it can be refined (by another class), further refined (by another class), then made into coins (by another class).

I was more talking about this part. I can't imagine many people lining up to play the class that is one of these middle men. Not to mention who would just craft coins? I can see being a crafter of swords in a very complex system. Personally I would take from ATITD and just let crafters do all sorts of stuff.

I am not suggesting you can't still have all these steps to mining and minting, I just think you could limit it to two classes or skill sets; Mining and minting. You can also involve other classes along the way, as I talked about, if you want to get people involved.

I think you also need a method of distributing the wealth. Who owns the mint? Who owns the gold ore? Who owns the right to mine? etc

I would imagine that if you are going to have a currency faucet you want the value to come out relatively slow and be spread around to everyone.

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 I just liked the idea that since coins are just metal, given enough time and/or skill, a player could actually make money themselves.

How about going so other way for money. You could use pigs, seashells or paper (all used as a form of currency). Metal is not the only way.

A monetary system that used Pigs, for example, might have the on going cost of keeping them fed, raising them, etc. This represents the on going cost of the money production. You could use the pigs weight and age to determine its value.

Money does not just have to be "Coins".

Actually money can be anything in your world that can be carried around and traded. What you have to think about is: What is Money?

Money is just an object that is easily carried and traded and that people can agree on its relative value.

I think the reason that most MMO economies fail (or need constant tweaking to stop them failing) is that the value of the common trade objects (money) are artificially set and can not change.

Have a look at how auction houses really work in the MMOs. People will set their own value on objects (including the trade object). Items that have desirability will increase in value and objects that do not have desirability will decrease in value.

You can even have it that one object that is recently introduced into the game have a high desirability, but then as many people collect it, the desirability goes down and the value drops. If the price of that objects is fixed, then you get inflation as the value of the trade medium (money) changes to match.

This occurs even if you restrict the amount of money being produced.

Even if the value of money is fixed, the desire to go out and get it is reduced and t can then be treated like vendor trash (that is people can't be bothered to pick it up).

The value of real world money is not fixed and the value of goods and services are not fixed. Why then when MMOs try to replicate a realistic economy do they suddenly decide that the value of money and/or the value of goods and services must be fixed?

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So your suggesting that to keep things a little more stable, I should have NPC selling prices be fluid? Interesting... That might take some more overhead with collecting information and NPC processing, but it may be interesting to pursue...

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Original post by Edtharan
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 I just liked the idea that since coins are just metal, given enough time and/or skill, a player could actually make money themselves.

Even if the value of money is fixed, the desire to go out and get it is reduced and t can then be treated like vendor trash (that is people can't be bothered to pick it up).

The value of real world money is not fixed and the value of goods and services are not fixed. Why then when MMOs try to replicate a realistic economy do they suddenly decide that the value of money and/or the value of goods and services must be fixed?

They do this because it is a game and they are serving their customers. Part of this includes creating a system that does not overwhelmingly favor the players who started the game early compared to those that started it later.

People that get in on the ground floor of an MMO have an advantage already. If anything the "price" just needs to be lower.

This also gets back at the fundamentals of MMO economies. In an MMO economy you can use a basic formula to determine the rate value is accumulating in your economy.

accumulated value(bucket) = All tangible value entering(faucet) - tangible value leaving (drains)

MMOs are based around the players being rewarded for their actions, or having a net increase in value. ie their accumulated value is always increasing. That means that over time those buckets will keep on getting filled up.

Designing an MMO economy is more about managing the buckets than just managing the faucets and drains. Currency is often the target of this problem because it is usually easily to collect a lot of it. (No inventory spot, can carry it with you, it is supposed to be liquid, it is supposed to be a good store of value, etc)

Altering the rate in which a faucet produces value for the players that come later doesn't really change the fundamental problem your economy is likely to have.

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 This also gets back at the fundamentals of MMO economies. In an MMO economy you can use a basic formula to determine the rate value is accumulating in your economy.accumulated value(bucket) = All tangible value entering(faucet) - tangible value leaving (drains)

That formula doesn't really work. The reason is that there are players that horde money without spending it. Where as the value of goods and services (items and other in game things you can spend money on) is what is paid for it.

The value is based on the movement of money, but the value you set for them using this formula is based on the total amount of money stored.

If the value is based on what players are currently spending, then it does not matter how much money players have stored as this stored money does not influence the value. But when they do bring this money into the game again, the values respond accordingly.

You can still keep the source/bucket/drain management, but this creates more stability in the economic system.

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 MMOs are based around the players being rewarded for their actions, or having a net increase in value. ie their accumulated value is always increasing. That means that over time those buckets will keep on getting filled up.

And that is the problem with a static value economy. When you have a static value economy and people horde (fill up their buckets), the actual value of what they have drops.

They might perceive an increase in value as the number that states how much gold they have increases, but by doing so, they devalue the value of gold throughout the game world.

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Original post by Edtharan
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 This also gets back at the fundamentals of MMO economies. In an MMO economy you can use a basic formula to determine the rate value is accumulating in your economy.accumulated value(bucket) = All tangible value entering(faucet) - tangible value leaving (drains)

That formula doesn't really work. The reason is that there are players that horde money without spending it. Where as the value of goods and services (items and other in game things you can spend money on) is what is paid for it.

The value is based on the movement of money, but the value you set for them using this formula is based on the total amount of money stored.

If the value is based on what players are currently spending, then it does not matter how much money players have stored as this stored money does not influence the value. But when they do bring this money into the game again, the values respond accordingly.

You can still keep the source/bucket/drain management, but this creates more stability in the economic system.

Quote:
 MMOs are based around the players being rewarded for their actions, or having a net increase in value. ie their accumulated value is always increasing. That means that over time those buckets will keep on getting filled up.

And that is the problem with a static value economy. When you have a static value economy and people horde (fill up their buckets), the actual value of what they have drops.

They might perceive an increase in value as the number that states how much gold they have increases, but by doing so, they devalue the value of gold throughout the game world.

The formula works fine for what I used it for, and it can be used to talk about the points you brought up.

I didn't get into the effective amount of value in an economy but I would base that formula off of the one I already made. Transactions effectively increase the value in the economy, just like how added liquidity effectively increases the money supply.

The same theory applies to MMO economies. More trade, more effective value based on the base accumulated value. That doesn't change the actual amount of accumulated value in the economy, or the need to understand how this accumulated value impacts your game world.

I also didn't get into the value a player places on any one bucket. Or the relative value of any one particular bucket relative to another bucket. I think that formula I used can help people understand where prices come from as it is a very easy way to establish supply and demand principles and how they relate to price.

Now the reason why I used this formula seems to have been missed. I like the formula because it gets at the fundamental problem all MMO economies face, and that is a seemingly never ending accumulation of value into the economy and a finite number of buckets to store that value in.

This gets at the heart of inflationary issues and trade issues in MMOs IMO.

Also you comment about stability doesn't make any sense to me. Can you explain it to me?

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I would also point out that if you want to relate the Price formula (P = MV/Q) to my "accumulated value" variable.

AV = Money Supply + Quantity of Goods

The problem I have been trying to highlight is that of increasing value as a total and running out of buckets. In practice this tends to result in players focusing their attention on Money and less on Goods. If they already have a sword +3 they won't try and get another one, instead they will get currency and hope to trade it for something they do want, but can't find.

On the flip side, as the Quanity of Goods increase there will be downward pressure on prices.

Hording would be accounted for by decreasing V.

[Edited by - Stangler on June 30, 2008 12:09:23 PM]

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