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loom_weaver

Silver as a Game Currency

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I'm creating a trading game that takes place during Ancient Babylonian times. While barter and other forms of currency were quite common I'm planning to make silver the primary currency in the game. Silver will be measured by mass: talents, minas, shekels, etc. When one goes to the marketplace and wants to see the prices, they will be listed in silver. Here's my dilemma. Prices in the game will change due to supply and demand (sub-systems I'm working on but won't bother going into much detail here). But the value of silver could also be subject to supply and demand. My question is if that is a good idea? Or should silver be fixed so that assuming the supply and demand for an item hasn't changed, its price in silver always remains constant? Pros (of the value of silver being subject to supply and demand): -Keeps things consistent in that all material resources follow the same pricing laws based on supply and demand. -Potential for player to really manipulate the markets by manipulating silver (which is something I want to encourage in this game) Cons: -likely more confusing for the player. Why has the price of bread (in silver) suddenly doubled when there's just as much as before? Oh wait, it's because there's a shortage of silver. -somewhat confusing for me the programmer. Commodities have a 'natural price' i.e. the value if the supply equals the demand. Normally I would state that in silver but now I would need a canonical (unitless) value hidden behind the scenes. Looking for your input to add to the pros/cons so that I can make a decision. Thanks kindly.

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Why has the price of bread (in silver) suddenly doubled when there's just as much as before? Oh wait, it's because there's a shortage of silver.

Wouldn't the price decrease instead, if silver get rare ?

If silver is used only as a currency, I think demand is not a concept as clear as for other goods. Supply on the contrary is easily defined. So to me, value of silver could be driven by the quantity in circulation only.

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Quote:
Original post by SriLumpa
Wouldn't the price decrease instead, if silver get rare ?

Oops, you're right. Less silver in circulation gives you more purchasing power.

Quote:
If silver is used only as a currency, I think demand is not a concept as clear as for other goods. Supply on the contrary is easily defined. So to me, value of silver could be driven by the quantity in circulation only.


Silver will be in demand for many factors. All metals in the game are classified as:
metal.gold
metal.silver
metal.bronze
etc.

And there can be demand for particular metals (e.g. demand for silver trim on weapons) as well as a general demand for metal. In the case of the latter, any metal can be sold to meet the demand.

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Depends on what you want. If you're looking to have a totally realistic economy, then it makes sense to include inflation and deflation, and maybe even interest rates and things like that. If you want a simplified economy and a fairly standard buy/sell setup, then it wouldn't really make sense to add other features into it.

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The problem with making your in game currency volatile is that it forces player to keep track of an additional variable when making trades as the changing value of currency may mean that even though you sold goods for more then you paid for them it you’ve actually taken a loss on the sale because of inflation.

Also depending on how the economic engine in your game works there is also the risk of run away inflation that could wipe out a players fortune. Suddenly that million pieces of silver you worked for years to earn is only enough to buy a loaf of bread.

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I'm just throwing this out there, and I really don't have the history background to do more than speculate, but were fluctuations in currency a reality for the time period your game is based in?

I find it hard to believe that the infrastructure existed that far in the past to have the level of trading you are talking about. I can't imagine people that far back in history understanding a fluctuating value in the currency.

But, I could be completely wrong on this (as history was never my thing).

John

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Naively as a user, I probably won't care why bread is more expensive; simply that it is or is not.

Though to be blunt, player market manipulation is not a good game design goal. It might be more 'realistic', but games are not realistic. When it's possible that a single player or guild has 50%+ of the money in the entire world, the whole thing tends to break down.

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Original post by borngamer
I'm just throwing this out there, and I really don't have the history background to do more than speculate, but were fluctuations in currency a reality for the time period your game is based in?

I find it hard to believe that the infrastructure existed that far in the past to have the level of trading you are talking about. I can't imagine people that far back in history understanding a fluctuating value in the currency.

But, I could be completely wrong on this (as history was never my thing).

John


In history yes, we do see inflation/deflation aspects as far back as ancient Rome, and maybe even from older periods. However it appears to have been far slower for the most part than it is today where we can suffer hyper-inflation and the like.

If players can set the prices for their goods then you are going to automatically have a variable value of the base currency. What your base currency is 'worth' is NOT a hard coded number in your game in this case, it will always be a fuzzy concept floating around the minds of your players.

If you want it to be fairly historic, then you'll want to include a number of options for coinage and Bullion. Gold and Silver being the most common, but any metal that is very rare may be suitable. (Aluminum was apparently once more expensive than gold,... As you can see things change.)

Another option for coinage is backed coinage of baser metals, such as copper/bronze/brass if the value of the metal itself is not worth enough to make it suitably valuable in its own right. That is a bank or government sets a standard for a given coin and agrees to a figure such as "100 of these small brass tokens may be exchanged for this 1 small silver piece." This enables more options for trading while avoiding value volatility between your coin pieces. If the value in gold/silver is always far higher than what the value of the metal in the coin is, then it will always be 'worth' its fraction of the gold/silver standard it is set at.


The biggest issue is proper control over what items are coming into play. You have to think about the economy as a whole, and what people need to buy to play.

Consider in game food that needs to be grown and harvested by players. Players need food to keep their character from starving, thus they are willing to work for it. However if food is too common then it becomes a few annoying clicks to get through to move onto the rest of the game. The value of food drops to nothing. On the other hand if food becomes too hard to produce then there isn't enough of it and the price skyrockets, and your game world stalls in a famine.

In an MMO game the values of items, their demand and supplies, are alive. To work well you need someone who knows business and economics to be able to sit there and watch it day by day, adjusting things as needed through in game mechanics. Without this you will most likely end up with a run away error. MMOs have people joining and leaving all the time, and this makes any system that you set out from the start doomed to break if you aren't there watching it, poking it now and then to balance it again.

The hardest part of this is that if you are SEEN to be poking the system too much then you pop your illusion of an economy. (Something that could actually happen in the real world! We nearly came to it after all, but no great revolution happened this time.) If you pop your illusion, then your players are going to realize that their Great Sword of Doom +140 becomes worthless in their eyes, and they leave your game.

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A major reason people needed currency back in the day was to pay taxes. It helped maintain currency as a means of storing value which allows it to be the primary medium of exchange.

Another thing to consider is that the effective money supply is dependent on velocity. So if people are hoarding velocity goes way down and so does the effective money supply. The hoarders can still come along and pay whatever they want for a good which just messes with any attempt to determine a price.

Having a fixed amount of currency or any good can be very problematic as demonstrated in the early days of UO. It is not recomended.

Ideally you create a circular system where you have some control of the flow of currency and all goods around the market so that your economy continues to run effectively.

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Quote:
Original post by Telastyn
Naively as a user, I probably won't care why bread is more expensive; simply that it is or is not.


As an extension of this, I think silver, gold, dollars, whatever we use in any kind of game mechanic is really a metaphor for or an abstraction of the purchasing power variable - how much can I buy? I think what the end user cares about is 'do I have more purchasing power now than I did before?'. If you want them to use a calculator, put silver in with all the other resources and don't make a point of using one resource over another as a monetary device. If, on the other hand, you don't want the user having to use a calculator (abacus in this case?) then I would let silver stand in for the purchasing power variable, however that fits into your economic model.

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Hi everyone,

Thanks for the feedback so far. I'll respond to it in more detail in a bit. However a bit more context about the game:

1. It is a single player game.
2. The goal of the game is to pay back a 10000 talents of silver debt i.e. based off the bible parable. There will be multiple ways of doing so with trading being the primary role buy hey, if you can do so by causing rampant inflation, more power to you.

The reasons I'm trying to work an economy into the game is because I want it to offer the player a few more strategies on winning rather than:
1. wander around cities until you find a cheap price
2. buy tons of cheap items
3. wander around randomly to cities until you find a higher sell price
4. Sell.
5. Repeat ad nauseam.

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Hi,

I think it highly depends on your goals for the game. The 'usual' casual game is quite happy with the wandering around part, some quests and a short story. On the other hand by creating a deep economy system you can create a much deeper gaming experience and a great replay value - at least for people who appreciate complex games.

Of cause you have to keep in mind that it is a hard job to get your economy running smoothly so if you depend on finishing the project soon / in a predictable time frame then I would stick to the easy / boring way. But if you have the ressources to really create an awesome economy you can create something unique. - So as an artist I d like to do the complex thing, because I doubt you can scare away all your customers by just making it base on a complex system. The problems come up if you have a complex system that is either flawed or your interface is shitty.

Now the question is how detailed you should try to model stuff and I think as stated above you should at least allow the silver value to fluctuate. Now the next step would be more currencies, like the neighboring country using billion coins for example and the coins of would have different worth depending on where you are. Using alloys like billion also adds the possibility for the player to counterfeit money by using an alloy with a larger copper part. Like the usual mixture could be 3:2 parts (copper/silver) and if the player orders some guy to produce some 2:1 coins the gain would be massiv - like the risk of getting caught ^^

It's up to you how much you go in detail, for me I think you should go as far as you can handle - but for me game programming / designing is more a hobby than something to make money with so I'd risk failing here.

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Well if it is single player (This questions usually come up as complications of a large scale game with many players.) then you have far less to worry about.

In this case you would most likely want your precious metals to be considered rare, and fairly stable in value. In historic times it tended to take a generation or two before any real change happened in the value of gold or silver. As communications improved and global markets opened we began to see prices change more often and in larger jumps.

You might get slightly different values in cities that are far apart, but generally a single city should have a fixed value on gold or silver.

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Perhaps it would be easier to fit the fluctuating value of silver into the model if bartering of all items, including any precious metals, was possible.

The economics may still be very difficult to implement, if you get down to cross-elasticity of demand and so on.

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What might help is if you show the player the base price, and then show the things that are affecting the cost, then show the final price. As a player, if I don't know what it affecting the price, I will just ignore it. The player needs some kind of scale, so they know roughly what they are dealing with. Is 500 a lot? If the player has no idea what things are worth, they have no idea if they should be buying 10000 or 1. The base cost would be constant, so new players could use it as an arbitrary scale of when to buy and when to sell. Experienced players would be able to make more informed decisions based on how the market is likely to change. However, it would allow new players to get in the game.

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If you want to really make this realistic, base it off of real free market principles and not the silly thinking that some modern so-called economists use.

http://mises.org/books/tmc.pdf
The Theory of Money and Credit, Ludwig von Mises

It would help to gain a good understanding of the nature and origin of currency to begin with. I don't think there has ever been a game that really simulates currency realistically. (Possibly because it's complex, and a game should be fun before anything else.)

Want to make it really unique? Don't have an "official" currency at all, let the player (and AI) choose what they prefer as currency. Rare valuable metals like gold and silver only ended up functioning as currency because they fit the criteria for an 'ideal' currency well. These metals were in such high demand compared to their supply that everyone would be willing to accept them in exchange for some other good, because everyone knew that they'd be able to trade gold/silver for other things.

If you can think of a clever way to simulate all this you could just treat those rare metals as a regular commodity and let the player choose what they want to use for a currency themselves. In other words implement a barter economy and let the high demand for gold/silver allow the AI and player to utilize them as "money". The supply of gold and silver doesn't change quickly because it's difficult to mine more of those metals out of the ground (relative to how much has already been mined), so that's not a major concern. (Although if your setting is BC, this may not hold as true, so there could be some minor gold/silver price inflation.) And the idea of "hoarding" altering the money supply is a modern myth forwarded by bad economists who want to discourage people from ever saving anything. (And we wonder why we're having economic troubles now?)

Realistically, the only reason to have an "official" currency is if there's a powerful government enforcing one using brute force. So the question is, how realistic of an economic simulation do you want?

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Quote:
Original post by Awoken
Tebriel, what you just described is EXACTLY what I'm incorporating in my game. I'm creating a simplified, simulated, real-time, economy. But when I use simplified, I mean the real economy simplified.


Ha! So much for "unique"! ;)

But hey, sounds good, it'll be good to see in action.

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Tebriel, you did forget one other property of something that is needed for them to be come a currency: Divisibility.

Precious metals were easily separated without loss of the material. This division could occur almost indefinitely (to the limit of the measuring technology).

It is impossible to have half a goat if you want that goat alive (or the other person wants their half a goat alive). With precious metals, you could cut the amount of metal in half and this would allow you to far more easily divide the value of what you are trading.

When two people trade, they are not exactly trading goods or services, they are trading Value. It is the value they, and their trading partner place in the particular goods and services they trade with that defines the trade. So although good ands services might be involved, it is the value that the traders place in them that is of more importance.

This can be important as the value one person places in a good or service can be different to that of another person. Also, this value is not a real/intrinsic value, but a perceived value. That is the value that the person places in that particular good or service is only what they think it should be (usually based off of comparisons with other goods and services and/or through their own assumptions).

So using this, you might allow players (and NPCs) to talk up (or down) the value of a particular good or service, or even allow them to outright lie about the value (but if they are caught in the lie, they might loose reputation). IF trading is not just a "click and get the money" style trade, you might give the player opportunities to banter with the NPC trader and this might allow them to haggle the prices (a common feature of trading back then - even today this occurs).

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The problem with that is the currency was essentially invented. Currency is just a medium of trade that representation something of value the item used as currency may have little or no value in itself.

Currency is an object that possesses the following characteristics:
Universally Accepted – Can be used anywhere and has the same value
Easily Divisible – Can be converted or represent larger and smaller denominations.
Non Perishable – Doesn’t loose value over time.
Easily Transportable – Can be traded and moved with relative ease.
Scarcity – Uncommon enough that the amount of currency in circulation doesn’t get to high or to low.

Currency maybe completely unrelated to what it represents, for instance in a farming community the currency could be based on the value of cattle. While the currency itself could be coco beans.

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I’ve never read that book heard of it but never got around to reading it.

But you’ll find if you do a little research in economics, trade, and the history of money that any society once it reaches a sufficient large and complex size will develop a form of currency, due to the fact the barter system begins to breaks down once people starting moving into none primary industries.

In fact currency itself is very old the ancient Mesopotamians were using a form of currency around 3000 BC called a shekel that represented the weight of 180 grains of barely. Likewise around the same time in china Cowry shells and representations of them were being used as currency. In Mesoamerica they used cocoa beans as currency as well as a luxury good for the upper classes.

All I’m saying is don’t confuse currency as a symbolic form of value used as a medium of trade with commodity money which is the acceptance of an object as inherently and universally valuable.

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