Economy

Discussion on game mechanics, balancing etc.
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Xylander
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Re: Some critics

Post by Xylander » Mon Apr 08, 2013 8:34 am

Trilarion wrote:
Xylander wrote:...This is a strange idea indeed. Imagine there is a region that has no resources and no factories and no money. People would hardly survive there. There is a second region that has resources and a factory. People there would create some goods and sell them to the first region (every turn). They'd get rich this way. And the money they get comes from the very poor region where people do nothing but survive? I say no! ...
Actually it's sounds strange at first sight but it actually is what happens in the modern world. So there are regions which are more industrialized than others. One example would be southern germany vs. northern germany now. The modern ways to solve this are a) differing wages, b) differing consumption and c) social transfers (aka the rich pay for the poor otherwise we all may end up in communism). Did your model include regionally differing wages within a nation? And for social transfers there are many automatic systems like government paid unemployment or pensions. Or there is tourism as a possibility for those unindustrialized regions.

In my "model" we could kind of assume that the lowly industrialized provinces show at least some demand because of pensioners or tourists or other social transfers. However the danger is that the minor nations become completely insignificant. After all they aren't industrialized. So where should their wealth to buy anything come from?
There are regions in our (real) world that neither have resources nor production capacity. Most of them belong to the world's poorest. The value they could transfer to richer regions is not significant. But you are right in north vs. south. But here we are not talking of poor regions at all. If we take a look at Spain, for example, we see an industrialized country. But we don't see a major power (at least not anymore...) Why? Because large parts of Spain's value creation goes to foreign countries (e.g. through foreign trade balance).

In my model such a region would produce goods, at least cheap ones like food and sell them. It would create some profit and could invest some of it in infrastructure. But people there would demand goods they are not producing, expensive goods. And they'd buy them on the world market. This way even the small profits would 'leave' the region.

A region without any resources could have tourism, indeed. But I don't think that we'll have to model this correctly. Instead this would be a completely unproductive region without any means to value creation. In case we model a population size (e.g. to calculate how many workers a nation can recruit per turn) it could have a value, though. It could just add population to a country. And, maybe in the later game, new resources might be found there (e.g. oil).
Trilarion wrote:... So a very profitable industry should just translate to a huge and powerful army. So we just have to include sinfully expensive killer ships/tanks/canons that you can buy. What do we expect the player to do once the country is fully industrialized? Waging war of course...
There are diffent solutions, I think. We should not force players to start wars. There must be a way to win a game without war! I know many players who severely disklike aggressive strategies. Sure - building a large army should only be possible for nations with strong economies. But what about economic wars? What about taking heavy influence on an enemy nation's trade partners? What about price dumping? A player could just use his nation's economic power to decrease other nation's incomes. Although other nations could see this as a casus belli and got to war (and this leads to the same situation you described but the player would feel as a 'defender' what is completely different).
Trilarion wrote:... So war especially extended war must be costly. There must be a severe risk that your economy crashes during a war.
Imperialism models this. I think the idea behind is correct, but it doesn't work because the effect is too small. In Imperialism you lose workers when recruiting soldiers. If you had severe losses during a war and you were forced not only to recruit soldiers for units completely lost, war would be extremely costly! Two things prevent it:
1. Even if a unit loses 90% strength (read: 90% of it's soldiers) a player doesn't have to pay anything for reinforcement.
2. Recruitment isn't limited by population. You can produce soldiers endlessly.

So if we fixed these issues, war would become risky and costly, event for the winner! I think military units should not reinforce automatically. Instead damaged units of the same type should be joined (like in the 'Total War' series). Two infantry units with 50% strength each would give one unit with 100% strength.

And because a nation gets only a limited number of workers each turn (depending on it's polulation's size) an extended war could easily cause more casualties than worker recruitment can compensate. A player would have to reduce his workforce to reinforce his army and this way cripple his industrial capacity and his income. There is a point where he can't afford a war anymore just for economic reasons! He will accept peace even if conditions are very hard (yes, even if he didn't lose a single region during war) ...

I believe we can create a much more authentic relation between economy and war than Imperialism can. And we won't have to alter the original game mechanics very much. At least we could leave it to the player to switch 'auto reinforcement' of units on and off (difficulty settings). If a player choses to go with the latter he should not have to 'join' damaged units manually. The game should do this for him. Instead of three damaged infantry units (60% health each) the player would have one healthy (100% health) and one damaged (80% health) after battle ...
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Re: III. Economy

Post by Trilarion » Mon Apr 08, 2013 1:02 pm

I completely agree with the "reinforcement is not for free" idea. Also for making it optional. It should be discussed further in the military section.

Actually I wonder how nations can compete economically. Basically you probably mean by price/discount because quality of a product is not part of the model. This means if there is a global overproduction and price drops that just some people can have more stuff = are wealthier. A wealthier nation of course would look more attractive to people from other nations, but ultimately you can only govern the world if you take military steps. This is what we need to discuss in the diplomacy sections, how a peaceful takeover can look like. Or what other options next to a war-victory there are.

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Re: III. Economy

Post by Xylander » Mon Apr 08, 2013 2:57 pm

Trilarion wrote:Actually I wonder how nations can compete economically. Basically you probably mean by price/discount because quality of a product is not part of the model.
I think I can explain that:

Every nation has it's own production costs. You have to pay for gathering resources, transporting them and producing the goods. Tech advances allow gathering/transporting more resources with less workers, effectively decreasing production costs. Alternatively a nation can have good relations to some minor nations selling resources. Good relations/foreign investments will decrease effective costs, too.

Additionally a nation can specialize on some goods and expand it's production capacities for these more than for others. Keeping the ability to switch production when markets demand it is a different strategy.

Overproduction lets prices drop more and more (as long as somebody is still offering more than others want to buy). Theoretically there is no minimum (*). There is a point for every nation where selling a product gives less money than needed to produce it. Then a nation loses money with every sold unit of this product.

Remember, every nation has internal costs, too. A big standing army, for example, is costly! Paying for unemployed workers' food and clothes or employing scientists may cause costs, too. A nation can get into trouble if it relies on trade income created by selling goods that are becoming overproduced. It might have to stop selling the overproduced goods to prevent losing money. Selling less goods means gaining less influence. Furthermore gathering resources needed for this good's production becomes useless and must be stopped, eventually leading to unemployed workers needing free food & clothes supply. Or leading to less resource imports even more decreasing influence gained. It can get worse and a nation can become unable to pay it's workers and soldiers and start to disband military units!

If a nation can produce goods very efficiently or has big financial reserves (to compensate losses) it can start an economic war just by spamming a market with cheap goods. This is what I'd call an economic attack. If a nation attacked this way fails to stop or counter the attack it may start to slip behind in markets (and in industry capacity, even worsening the problems). In the end it will lose the race for influence and might even become unable to keep it's military up to date.

... Sounds like a valid victory strategy as long as gaining influence leads to victory (like in Imperialism), doesn't it? Destroying some nation's economy and influence in the world means effectively subverting it's state as a major power!

(* - If you follow price development on the European Energy Exchange you can see that prices for Energy sometimes become negative! Markets are crazy sometimes...)
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Post by Trilarion » Mon Apr 08, 2013 3:51 pm

Good but historically nations protected their markets: customs, embargos... I wonder how and if we should incorporate this. It would be a defense against the excesses of turbo capitalism (oops, wrong time period) but it might result in diplomatic reactions that might be difficult to model. My feeling is we should be cautious there. The original had embargoes btw.

Second thing is that it still requires war in the end. First you weaken your enemy economically, then you attack him. That's fine, but let's say this is an economical/militaric victory. If we want another kind of victory that is not militaric (but just economic/diplomatic) we would need to define what is important there.

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Embargoes

Post by Trilarion » Thu Apr 11, 2013 3:04 pm

In the original the player had control over each trade and could reject or accept it. Therefore embargoes made sense because it was just a shortcut for automatic conditional rejection.

Now I wonder, do we want to keep the total control for each trade? This can become quite boring and tedious? As far as I see the two proposed economic models do not say anything specific about this. It might be better to replace manual/automatic rejection/acceptance with specifying priorities and some automatic but transparent internal balancing of international demand and supply.

So for example you would say that at most XX tools can be sold this turn and preferably in Sweden and Danmark first. Internally the programm would then try to satisfy these constraints.

Or what would be the alternatives? How would they compare to the original way?

Well for embargoes, they contradict the idea of economical competition a bit. Maybe at least minors should be able to impose embargoes and majors only against minors and other majors they are at war with? Or a soft version of embargoes would be tariffs of say 20%. So what do you prefer?

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Re: III. Economy

Post by Veneteaou » Thu Apr 11, 2013 6:24 pm

Now I wonder, do we want to keep the total control for each trade? This can become quite boring and tedious? As far as I see the two proposed economic models do not say anything specific about this. It might be better to replace manual/automatic rejection/acceptance with specifying priorities and some automatic but transparent internal balancing of international demand and supply.
That sounds awful. Total control isn't tedious because the game is balanced to prevent hundreds of trades each turn. The player bids on a max of four goods, and with the proper diplomatic and economic model the player won't receive offers from more than 4-5 nations for each good.

The original way was easy, because the trade minister was right there to tell the player what to do. At worst, you clicked no, or typed a "1" and then clicked yes, or clicked yes.
Well for embargoes, they contradict the idea of economical competition a bit. Maybe at least minors should be able to impose embargoes and majors only against minors and other majors they are at war with? Or a soft version of embargoes would be tariffs of say 20%. So what do you prefer?
I'd like the option for both complete embargoes as well as tariffs.

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Post by Trilarion » Thu Apr 11, 2013 6:38 pm

Sure you had to trade 4 goods only and maybe have to decide about 10 offers at maximum. But we somewhat agreed on reducing the selling of extremely high amounts of goods to a minor nation because each nation will have some demand beyond it will not buy or not buy much more. One can expect that with this the volume of a trade goes down and the number of trades up. Some players might want some kind of automatization about this, specifying general direction instead of overseeing each single trade.

As a compromise which has been applied already several times we can do the following: you can accept or reject every single deal or you can at any time in between or for all trades let your trade minister do the job. I still have to study how exactly Xylanders model will cope with this much flexibility in supply and prices. My current guess is that the price cannot be set without knowing how much will be sold and the amount to be sold cannot be decided without knowing the price. The solution would probably to have prices go down until nobody is willing to sell. Well this sounds a bit confusing and the reason is that I haven't thought it through. I will come back to it.

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Re: III. Economy

Post by Veneteaou » Thu Apr 11, 2013 7:27 pm

We could just do what Imp1 did elsewhere and implement an Otto-calc for trade offers.

Alias72

Re: III. Economy

Post by Alias72 » Tue May 14, 2013 8:08 pm

seeing as were suggesting economic models I thought I would give it a try.

every major nation has a mint. every major nation prints money. every major nation trades goods in their own currency. when a nation says "I want Iron" on the world market every other nation bids, and the highest bidder wins. The price payed is then stored as the current price which is a base value used to adjust AI bids and give human players some idea what is going on. The prices displayed are in the viewing nations dollars. (America buys German steel, price listed in US dollars for America, Deutschmark for Germany to avoid confusion.) The buying nation then purchases currency from the selling nation. the selling nations currency stockpile drops (like wood or iron) but their foreign currency reserve rises.

minor nations do not have mints.minor nations use the currency of their most favored nation trading partner, and this is adjusted every 10 years (to avoid switching every turn) initial values are by proximity. Internal markets become ABSOLUTELY necessary. because the cost of goods is set by the exchange of goods, goods must be frequently traded otherwise the price becomes erratic. as such a series of "false bidders" representing internal markets must trade resources to stabilize the system.

basically money is a commodity that can be traded. every major nation prints it and needs it to buy and sell resources. money is no longer an abstract value used for every purchase, but a universally accepted commodity controlled by the majors themselves. It is important that each major only controls their own currency reserves otherwise they could destroy the world economy. this also allows a more realistic model as nations in this period controlled their own money supply. the mint can be placed under computer control simplifying things for the player at the cost of less control.

the AI would need to store exchange rates for the turn, previous prices for last turn, and currency reserves. this is a slight drain on memory.

the economy becomes close looped as no funds escape nor are they magically created.

there should probably be a reset economy button. this would represent the reprinting of your currency and would hurt your relations with every nation that has currency reserves in your dollars (by a degree proportional to the amount of dollars) you set the exchange rate (say 50 to 1) and for every 50 dollars they had they now have 1. this is a fail safe in case you pull a Weimer Republic and start printing money. it should also be noted that this would screw over your economy as the prices everyone expects to bid are based on last turns inflated dollars, so for one turn you get practically no trade (only internal markets)

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Re: III. Economy

Post by Trilarion » Wed Jul 17, 2013 3:22 pm

Just reading in this thread and one thing I cannot resolve is how to distribute the profit. I mean who is profiting how much from the gap between the wages you pay your workers and the money you get while selling them. To simplify even the question is about the ratio of wages and productivity. Lower wages mean that a higher share of the nations wealth can be spent by the government (the player), higher wages mean that the share is less. Should this share be constant? Should it increase or decrease with time? How should it depend on the level of education of the workers? Should it be more simple to exploit uneducated workers? But then why having educated workers at all?

In the original game it was the other way around, the more educated the worker, the more profit for the government. But then every job could be done by uneducated or educated workers. For a more realistic approach you would probably say that productivity and education are going hand in hand - even a large number of uneducated workers cannot build a rocket which goes to moon and back. And the higher the productivity and education the better your bargaining power aka your desire for lower taxes?

It seems like an unsolved puzzle even in reality. One possibility would be to set the ratio constant for now and keep it in mind. Indeed I now aim for having the initial economic model as simple as possible. So during the next time I will create a proposal that does not have wages, but just consumption for the needed workers and generates money buy selling products to an anonymous worldwide crowd. Prices will vary for each market depending on the amount of supply and additionally there is the possibility to subsidize your products and therefore get a slight advantage in competition.

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