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Commodity Trading Prices

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Desprez
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I had an idea for a space-based game a while back that had an element of commodity trading. This game then took off in a completely different direction, and the the commodity trading had to go.
But I still think some fun things could be done with space commodity trading, so I'm re-examining the idea for a different game.

There are three basic commodities. You want to buy low and sell high. They have a sort of rock-paper-scissors profit thing between three main types of worlds.

Core (low food, med ore, high goods)
Industrial (low goods, med food, high ore)
Frontier (low ore, med goods, high food)

Ideally, you want to take food to the frontier mining colonies, then take the ore to the industrial worlds, then take the finished goods to the populated core worlds.

But I'm not sure what really makes sense as far as pricing.
I originally started with:
(low-med-high)
Food: 1-2-3
Ore: 4-6-8
Goods: 10-15-20

But then realized if I was to have special events that make the prices fluctuate, I'd better make food start at 2, not 1, or there's no room for it to go down, and by extension, all the other items need to change as well. So I ended up with this:
Food 2-4-6 (+/- 1)
Ore: 5-9-12 (+/- 2)
Goods: 10-15-20 (+/- 4)

But this seems to lead to other problems.
1) How much sense does it make for a mining colony to buy 1 food for $6, only to turn that around into selling 1 ore for $5. How do the people there manage to survive on that kind of economics? Or maybe they eat 1 food and it's enough to turn 3 ore, or something.
2) Notice that the % of profit is higher on the low cost items, but the actual profit is higher on the high cost items. I don't know if that's a good idea or not.

Maybe there's another way to represent price flux, such as buy-1-get-1-free kind of deals.

So maybe something like this:
Food: 1-2-3
Ore: 3-6-8
Goods: 8-12-16
low flux: get an extra item free when buying load / don't get paid for 1 item when selling
high flux: must pay the cost an extra item when buying load / get the price of an extra item when selling

Ok, this does some interesting things:
1) When selling and buying ideal commodities (at normal prices) you don't have to manipulate any money, you can just exchange the tokens as they are the same price.
2) It makes large volume shipments more resistant to price flux, as the extra money is applied once per transaction. I don't know if this is good or bad. Maybe it's better to apply the cost after every 3rd item, or something.

Is there benefit to try and keep prices tied to simpler denominations of money, to make the math easier? Or does doing so make the values so large, it erases the benefit?

Are there some other economics 101 factors that could be worked in that I'm forgetting?

I already have an idea in mind to make prices react to someone dealing in large quantities.
1) (simpler) If a player buys/sells 8 or more of the same item then that planet refuses to deal in that good for a time.
2) (complex) instead of refusing to trade, the price raises or lowers to the next price point.
And these would be one way to mess with other players' plans.

questccg
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I have something similar

Desprez wrote:
I had an idea for a space-based game a while back that had an element of commodity trading. This game then took off in a completely different direction, and the the commodity trading had to go.
But I still think some fun things could be done with space commodity trading, so I'm re-examining the idea for a different game.

I also have such an idea on the *backburner*. I wanted it to be a market concept where you could make trades with other players or the market (in the event nobody wants to trade with you - eg. you are winning the game).

I have not though much about it... But elements such as tracking quantities have disuaded me continuing further on the project. The mechanics part also is troublesome... In an earlier game, I had ROLES in it like "San Juan" but different. I still think part of the game has merits but there needs to be a viable mechanic for having a market and being able to trade commodities...

I wanted the game to have *multiple* paths to victory: economic victory, cultural victory or military victory. Economics had to do about achieving a certain wealth, cultural had you building "Wonders" to bring glory to your empire and Military was an all-out bash & destroy using spaceships to destroy the enemy colonies. As you play the game you pursue all 3 victories and usually players will focus on 1 of the 3 towards the end of the game...

questccg
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More thoughts

For example, player 1 is playing peacefully and is accumulating wealth... Suddenly player 2 decides to make war with player 1. So player 1 now has to shift his game play and start building an army of spaceships to defend his colony. Obviously spaceships require upkeep and therefore most of what he had accumulated in wealth he had to trade for ore and minerals to build the spacecrafts. Then once he is able to keep player 2 from destroying his colony, he can then continue accumulating more wealth and SLOWLY try to beat player 2.

Obviously cultural victory was another possibility, but it depended on the order of the cards (randomness). So one player may have the advantage over another because of how his deck was shuffled...

questccg
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Original idea

What I think would be a good idea is to have a sheet of paper (3"x5") on which you would draw graph lines of the prices of the different resources (ore, minerals and food). The lines would go up and down... On EACH TURN, a token would be moved from the graph to represent the new market prices for resources. Although this is sort of "hard coded", it still could simulate a market with rising and lowering prices.

Players could trade resources rather than purchasing from the market. Or use excess to make a little profit when the market looks good. This of course just makes the game non-self-publishable... But it could work (I think).

Each player could have his own market with his own price tendencies which could encourage making TRADE deals (like x amount of ore in exchange for y amount of food).

See Image sample here: http://www.bgdf.com/node/7517

MarkKreitler
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Me, too

Desprez wrote:
I had an idea for a space-based game a while back that had an element of commodity trading.

*snip*

There are three basic commodities. You want to buy low and sell high.

*snip*

But I'm not sure what really makes sense as far as pricing.

*snip*

But this seems to lead to other problems.
1) How much sense does it make for a mining colony to buy 1 food for $6, only to turn that around into selling 1 ore for $5.
2) Notice that the % of profit is higher on the low cost items, but the actual profit is higher on the high cost items. I don't know if that's a good idea or not.

Maybe there's another way to represent price flux, such as buy-1-get-1-free kind of deals.
low flux: get an extra item free when buying load / don't get paid for 1 item when selling
high flux: must pay the cost an extra item when buying load / get the price of an extra item when selling

*snip*

Is there benefit to try and keep prices tied to simpler denominations of money, to make the math easier? Or does doing so make the values so large, it erases the benefit?

Are there some other economics 101 factors that could be worked in that I'm forgetting?

I recently started one of these. Guess it's a popular genre. :)

It's interesting to see how the three of us differ in modeling the economies. Quest has a very high-level idea, where markets values follow pre-determined graphs. You have a "mid-level" model, where you're manipulating prices directly (if I'm understanding correctly). I'm trying for a low-level model where supply and demand dictate the market. For what it's worth, I think the low-level model answers some of your questions.

In my model, each planet has a local economy represented by 'n' blank spaces that can be filled with either "supply" cubes or "demand" chips (think mini-poker chips). The larger the economy, the more spaces available.

Example: Ceti Alpha VI is a wild frontier world, newly settled. It has a small local economy -- 1 or 2 spaces. Shepherd's World, in contrast, is a galactic hub with 6 available spaces.

Each turn, a single die roll causes some planets to generate a combination of supply cubes and surplus chips. Supply cubes represent resources or commodities produced on the planet. Demand chips represent resources and commodities required by the planets in excess of their ability to produce. Both chips and cubes are color-coded to match one of 5 resources in the game.

Not all planets produce or require the same resources. Not all planets generate supply or demand every turn. All production and consumption is statistical. Think "Settler's of Catan" in terms of rolling dice to see what's produced. Not every hex produces every turn, and the resource produced is not the same for each hex for a given number.

If all the spaces around a planet are filled with chips and cubes, its trade economy is "stalled" and it can do nothing more until someone trades with it.

Rather than manipulate prices directly, this system relies on a "market chart" that shows the value of each resource based on the number of supply or demand tokens on the planet.

For example, precious metals have a relatively flat, but relatively high market value. People can survive without them, but they generally want them all the time. Food, on the other hand, has a relative low value when demand is low, and is almost worthless when there's a surplus, but skyrockets in value during times of great shortage. The market curve to food is therefore non-linear with respect to supply.

This curve, coupled with the planet's "economic spaces", handles the situation where players dump a large quantity of goods onto the planet. Once the player "buys out" all available "demand" chips, he sells any remaining goods at the "surplus value" on the market chart.

Given that each planet generates fixed supply and demand resources in a statistical way, it should be possible to determine if it's got a balanced economy, one with a trade surplus, or one with a trade deficit. This gets to your question about miners buying food for $6 and selling it for $5. Since this model is statistical, that's always a possibility, but we should be able to design planets that are theoretically stable, economy-wise. We could also design some to be revenue sinks or sources.

All that remains is to supply events that affect supply and demand of various resources. We can also introduce drains on the players' resources. For example, players can purchase more ships over the course of the game. Some have better hauling capacity, others better armor, speed, weapons, etc. Some events create hazards that favor one type of ship over others.

Example 1: the "Outbreak!" card makes "Medicine" highly valuable on a planet for a short period of time. Faster ships -- which generally have lower hauling capacity -- have a better chance of delivering the supplies before the shortage ends.

Example 2: the "Raiders!" card creates a resource shortage on the affected planet, but puts pirates in orbit for 'n' turns. Players whose ships can fight their way through stand to make a hefty profit.

I like this model because I can understand how to balance it, at least approximately. As long as the average worth of all commodities match, I can let 1 unit of Medicine equal 1 unit of Energy or anything else. The game then becomes about staying agile enough to exploit the statistical fluctuations in the system -- what you're calling "flux", if I read you right. But I don't have to model the flux. The dice supply it for me. I *do* have to make sure that the events in the game don't favor a particular resource too heavily.

What scares me about this is the unseen complexity. I haven't actually tried to crunch the numbers, yet. The combinatorics of the planetary economic system worry me. Say planet 'A' supplies 2 kinds of resources and demands 2 others. Based on the production dice, there's a fixed percent chance per turn to generate each one. In order to balance the resources in the marketplace, I have to compute the likelihood of all possible combinations of supply and demand. Then I have to do this for all planets. Once I have all the distribution curves, I have to use them to generate the monetary values for each resource given its surplus or shortage. It's daunting.

But...

If I can work it out, it will answer the questions you're asking about pricing.

I'm excited to try it out. Hoping to get a chance over Christmas break.

Hope you both continue to post as you develop your respective models.

Mark

MarkKreitler
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Money vs Trade Units

One last thought.

In my model, the basic values of all commodities is the same -- what I call one "trade unit." So, a single unit of Energy is worth -- on average -- one unit of Technology, Food, or whatever. I realize this is absurd because it leads to unrealistic cargo volumes (1 cubic meter of gold is worth MUCH more than 1 cubic meter of fudge, for example, so a hold full of gold should be exponentially more valuable than the same hold full of chocolate), but it's a worthwhile abstraction.

This doesn't eliminate the need for money, though, because fluctuating market values would require trading fractional amounts of resources.

Where it's useful is in the balance step. By looking at the average supply and demand configurations of a planet's economy, we can quickly see if it will run, on average, a trade surplus or trade deficit.

The same is possible if you give different resources a monetary valuation, but it's harder. It's also harder for players to understand value relationships at game time.

Of course it's all theory until I get the prototype up and running. That "gold vs fudge" problem looms large...

questccg
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Transporting goods is the problem

I think in Mark's situation, he is thinking that trading is to be done via Starships. In my situation, traders arrive at the planet's outpost and complete their transactions... There is no need to have ships with HULLS. Ships are simply used to defend a planet and it's installations (the colony). Obviously ships can be used on the offensive also... But they are NOT involved in TRADE.

So basically the trade the is being done is via the Outpost installation. And there would be a market trend graph to determine what price commodities are selling for. The merchandise would be deposited at the Outpost. Now there would be cards that could affect the prices of commodities. For example: An outpost upgrade that produces +1/-1 trade values. And basically whatever the trade value of the commodity, if you are selling you add +1 or the opposite, if you are buying -1 to make the price cheaper.

The problem I see is TRACKING how much money and resources each player has. Obviously I think a concept such as a BANK is essential. You are not going to sit around and accumulate chips... With the commodities, it just makes things worst. So you would have to have a warehouse (your outpost) where you can stock all your resources and a bank to keep track of credits. It still is a *serious* task to keep track of everything nice and neat...

But I personally like the "simulated" graphs which make the economic flux obvious (from the graph itself). I think it would be a simpler implementation and therefore be more playable. But that is just my opinion...

questccg
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Hmm... I wonder

questccg wrote:
The problem I see is TRACKING how much money and resources each player has. Obviously I think a concept such as a BANK is essential. You are not going to sit around and accumulate chips... With the commodities, it just makes things worst. So you would have to have a warehouse (your outpost) where you can stock all your resources and a bank to keep track of credits. It still is a *serious* task to keep track of everything nice and neat...

I wonder if it would be possible to setup a *check*-like table to which you put in the positive (buy) and negative (sell) transactions and keep a balance (like a checkbook). Another table might be used to keep track of commodities. In this table, the columns would be your resources (for trade) and at the end of each transaction, balance kept of your resources.

Obviously trade would be a big element in the game. And you have a market to sell/trade goods so that if you are ahead of the game, you can still trade with the market and continue with your game (no blocking by other players - by not trading the resources you need). That does not stop player building ships and then attacking your colony (or even gang up together against you 2 vs. 1).

questccg
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Oops

questccg wrote:
I think in Mark's situation, he is thinking that trading is to be done via Starships. In my situation, traders arrive at the planet's outpost and complete their transactions... There is no need to have ships with HULLS. Ships are simply used to defend a planet and it's installations (the colony). Obviously ships can be used on the offensive also... But they are NOT involved in TRADE.

I meant to mean CARGO HOLDS not hulls (no need to have ships with CARGO HOLDS...) And again, ships are not involved in trading, only warfare/defense.

MarkKreitler
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You're right

questccg wrote:
I think in Mark's situation, he is thinking that trading is to be done via Starships.

You're right. Can't believe I didn't mention that. :(

...

questccg wrote:
the "simulated" graphs which make the economic flux obvious (from the graph itself). I think it would be a simpler implementation and therefore be more playable. But that is just my opinion...

Depends on the kind of game you want. I think the simulated graphs work well for your game, which isn't about economics so much as civ development. In my game, the market needs to be real, because the market *is* the game. If I can look at a graph and see where the markets will be in 3 turns, I have only one decision to make: do I race other players for the optimum port, or go somewhere less crowded?

I appreciate your point about simplicity, though. I'm not sure the math in my game will be manageable. Settlers of Catan does it right, in my opinion. If player 'A' wants clay and player 'B' has it, they work out a trade at an exchange rate dictated by the amount of clay available in the game. It's simpler than market charts (and *way* simpler than my market sheet!) but not predictable. Best of all worlds, really. :)

questccg
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Another problem

The other thing which is a problem is to determine how a colony *produces* resources. I think the "market" idea solves trading issues (between the market and other players). But I am not sure how to handle production of resources. This is another *roadblock*.

questccg
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Exchange rate

MarkKreitler wrote:
If player 'A' wants clay and player 'B' has it, they work out a trade at an exchange rate dictated by the amount of clay available in the game.

Why have an exchange rate that dictates how the trade is to go? Why not let players make their own decisions based on what is being offered in the exchange... If player 1 has a LARGE surplus of food and player 2 needs some, well if player 1 is more easily willing to part with his surplus, player 2 can negotiate a better deal for his credits... Players can go back and forth, to make a better deal, and when both parties come to a satisfying conclusion, the trade can be done.

MarkKreitler
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Note to self: "learn to communicate"

questccg wrote:
MarkKreitler wrote:
If player 'A' wants clay and player 'B' has it, they work out a trade at an exchange rate dictated by the amount of clay available in the game.

Why have an exchange rate that dictates how the trade is to go? Why not let players make their own decisions based on what is being offered in the exchange... If player 1 has a LARGE surplus of food and player 2 needs some, well if player 1 is more easily willing to part with his surplus, player 2 can negotiate a better deal for his credits... Players can go back and forth, to make a better deal, and when both parties come to a satisfying conclusion, the trade can be done.

Sorry, I wasn't clear. That's exactly how Settlers works. What I meant by "...an exchange rate dictated by the amount of clay available in the game" is that the *players* determine the value of the clay based on how much they have and how plentiful it is. It's a real, unregulated market.

This system works great for Settlers, but has a couple of problems when adapted into my game. First, the "AI" players in Settlers feel no market pressure. You can always trade with the bank: 4 of any resource can be exchanged for any other resource, no matter how much or little is available of the second resource. In addition, there are several "3-to-1" ports available which reduce this exchange rate to "three of anything for something else." There are also some specific "2-to-1" ports, where players can exchange 2 of something specific -- like wood -- for 1 of anything else.

This works in Settlers because players control the 3:1 and 2:1 ports, and can always accept or reject trades with other players. Humans watch the market and make decisions accordingly. In my game, players trade with "AI" planets, so I need an algorithm that understands the market and drives commodity prices accordingly.

This does make me wonder, though, if there isn't a simple rule for exchange that could replace the market chart. For example, maybe the price of a commodity is equal to the number of demand chips showing for it at the planet. For instance. Planet A has 2 food demand chips showing, so food sells there for 2 Trade Units.

If a planet has no demand markers for a commodity, players can't sell it there. There could be a central "space station" that will purchase any commodity at 1 Trade Unit per two resource.

Dunno. Bears some thought. Simple is better, for sure.

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