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What other perfect-information stock market mechanisms are out there?

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rayzg
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Hi all,

I know of only two perfect-information stock market mechanisms:

[1] Those found in 18xx games
[2] Those found in Dutch InterCity, Wabash Cannonball, and several other Winsome games

Does anyone know of any other perfect-information stock market mechanisms *ideally* with the following characteristics:
- Share values fluctuate up and down (unlike Acquire; share values only rise)
- Shares can be bought *and* sold anytime (unlike Acquire and Dutch InterCity)

The rest of this post describes why I’m looking for these kinds of mechanisms.

Thanks for your input!

====================

I’m trying to create a relatively complex stock market system that doesn’t have the “flaws” that the 18xx and Dutch InterCity systems have:

- The “flaw” in 18xx is that they are quite realistic and because of that, 18xx games, by necessity, are very long games (I’ve only played 1830 and 1856; I haven’t tried the shorter variants that are now available).

One strategy in 18xx games is to develop the corporation you started at the beginning of the game in such a way so that it has a really high stock value at the end. But because the stock market in 18xx doesn’t fluctuate wildly like other, much lighter stock marker games, this strategy takes a long time.

Another strategy is to start a corporation, then later start a second corporation. You would then transfer all the wealth of the first corporation to the second, then sell off the shares of the first corporation for a nice profit. This also takes a relatively long time since a dividend payoff (at the beginning of the game) is small compared to the cost of a single share.

- The stock market mechanism in Dutch InterCity is extremely elegant and challenging. During a share purchasing round, players, in turn, choose a share to be auctioned off until a player runs out of money. The money paid to purchase a share is put into the corporation’s treasury. Players “sell” their shares at the end of the game, which are valued at the amount of cash in the treasury divided by the number of shares sold. Players could lower the value of a share by auctioning shares cheaply, thereby diluting the market. The “flaw” is that a bit of realism is sacrificed for elegance because shares are auctioned rather than purchased, and they can’t be sold during the game (and personally, I don’t care much for auction mechanisms).

====================

mistre
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Reply

Check out Wealth of Nations - http://www.boardgamegeek.com/boardgame/32666.

It has a fluctuating stock market mechanism.

Wilf Backhaus
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The Problem of Perfect Information

rayzg wrote:

Does anyone know of any other perfect-information stock market mechanisms *ideally* with the following characteristics:
- Share values fluctuate up and down (unlike Acquire; share values only rise)
- Shares can be bought *and* sold anytime (unlike Acquire and Dutch InterCity)

There is a contradiction between your initial condition "perfect information" and the first characteristic of *fluctuation* you want to emerge as a result of the mechanism. Your second characteristic of buying and selling during the game is a matter of game length.

The second edition of Acquire with the options to buy more etc. reduces the perfect information situation of the game. Cartel had "information asymmetry" simulated by restricting what was available by having players draw to replenish opportunity. Cartel had no selling mechanism but it did have a borrowing against share equity mechanism.

Fluctuations can be introduced by outside events such as found in Stock Ticker or Stock Market. I think a possible test you might consider is whether in the mechanism you adopt a short selling or hedging strategy is possible. The second 18xx strategy you discussed is a form of hedging by way of insider trading.

GamesOnTheBrain
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Wealth of Nations

mistre wrote:
Check out Wealth of Nations - http://www.boardgamegeek.com/boardgame/32666.

It has a fluctuating stock market mechanism.


Wealth of Nations has a fluctuating market mechanism for resources. It doesn't have shares in a company, but you might get some ideas from it.

mistre
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oops! you are right

Thanks for the correction. I was a little hasty in posting it :-z

MatthewF
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Perfect Information plus Fluctuation

Wilf Backhaus wrote:
There is a contradiction between your initial condition "perfect information" and the first characteristic of *fluctuation* you want to emerge as a result of the mechanism. Your second characteristic of buying and selling during the game is a matter of game length.

I understand how there's a contradiction between those two in Acquire, but I don't see any inherent contradiction between them.

Here's a game: three companies, 10 shares of each, initial starting price is one dollar. Players take turns buying or selling up to three shares on their turns. For each share purchased in a company the value of the shares goes up one dollar, for each share sold it goes down a dollar. Player's current share ownership is open information.

That meets both criteria. It's not a fun game, I'll happily admit, but it's a game that meets both criteria, isn't it?

Wilf Backhaus
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Perfection versus Fluctuation

MatthewF wrote:

I understand how there's a contradiction between those two in Acquire, but I don't see any inherent contradiction between them.

Here's a game: three companies, 10 shares of each, initial starting price is one dollar. Players take turns buying or selling up to three shares on their turns. For each share purchased in a company the value of the shares goes up one dollar, for each share sold it goes down a dollar. Player's current share ownership is open information.

That meets both criteria. It's not a fun game, I'll happily admit, but it's a game that meets both criteria, isn't it?

I'm sticking with my original point. If you want genuine fluctuation you cannot have perfect information.

The OED tells us that to fluctuate is to df: "Move up & down like waves (rare), vary irregularly, rise & fall, be unstable; vacilate, waver." Unless you are using that rare usagewhere fluctuation is merely wave like motion, the essence of fluctuation is not mere wave movement but irregular wave movement - hence the tension between perfect information and fluctuation. Your original criteria were:

- Share values fluctuate up and down (unlike Acquire; share values only rise)
- Shares can be bought *and* sold anytime (unlike Acquire and Dutch InterCity)

Your 3 companies and 10 shares do not meet the criteria of fluctuation, other than that rare usage - the only thing which will meet the common understanding and what your initial criteria implied is a mechanism which moves the market randomly independently of the players. Or if you have an orderly market, the order can be disrupted by the players invoking outside events. Without an independent randomization mechanism information stays perfect and there are no fluctuations only wave like changes which can be predicted. If every time a player bought or sold a share there was a random reaction by the market - could be up, could be down, could be neutral , your condition of perfect information would be violated. The price would move in ways which players could not calculate in advance.

In real life there have been several attempts to reduce the random factor in market behavior - hedge funds use some of these methods. Good methods have been discovered but not perfect ones - as the case of Long Term Capital Management proved.

rayzg
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Replacing the word "fluctuate" with "manipulate"

Wilf Backhaus wrote:
I'm sticking with my original point. If you want genuine fluctuation you cannot have perfect information.

Perhaps a better word to substitute for fluctuate would be manipulate. When you read session reports of 18xx games, often players discuss more about the nasty ways they manage to manipulate the stock market than clever route building.

Wilf Backhaus wrote:
In real life there have been several attempts to reduce the random factor in market behavior - hedge funds use some of these methods. Good methods have been discovered but not perfect ones - as the case of Long Term Capital Management proved.

From a gaming perspective, such ways to "reduce the random factor" might be more interesting than introducing random, external factors to create a fluctuating market. As far as I know, later variants of the 18xx system introduce many more mechanisms, such as allowing corporations to buy back shares, take out loans, and merge with other corporations, which allow players to further manipulate the stock market. However, a possible drawback of adding these mechanisms is that it complicates an already involved economic system, making the 18xx system even less accessible to gaming audiences.

As for the theoretical game presented:

MatthewF wrote:
Here's a game: three companies, 10 shares of each, initial starting price is one dollar. Players take turns buying or selling up to three shares on their turns. For each share purchased in a company the value of the shares goes up one dollar, for each share sold it goes down a dollar. Player's current share ownership is open information.

That meets both criteria. It's not a fun game, I'll happily admit, but it's a game that meets both criteria, isn't it?

It would be probably better to request for stock market mechanisms with these characteristics instead:

* The stock market mechanism is featured as part of the game rather than the main focus of the game. Typically, it seems that games that focus solely on the purchasing and buying of shares rely on random, external factors to raise and lower share values to add tension to the game. It's far more interesting to let players themselves to that. A related question would be: Why are train games and stock markets so closely associated with each other in board games?

* Greater ownership of shares doesn't simply mean greater wealth. Instead, it means that a majority stock holder can exclusively perform certain actions in the game that directly and indirectly affect the share price of other shares.

Wilf Backhaus
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Rail and the Market

Your question: A related question would be: Why are train games and stock markets so closely associated with each other in board games?

Tradition mostly - rail has always been fairly capital intensive so market manipulation goes with the territory. Games which feature the construction of rail would naturally have that aspect to them as well.

MatthewF
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Definitions

Wilf Backhaus wrote:
The OED tells us that to fluctuate is to df: "Move up & down like waves (rare), vary irregularly, rise & fall, be unstable; vacilate, waver." Unless you are using that rare usagewhere fluctuation is merely wave like motion, the essence of fluctuation is not mere wave movement but irregular wave movement - hence the tension between perfect information and fluctuation.

I'm using the commonly-understood concept of "changes" without worrying about the OED definition of the word "fluctuation." It seemed clear to me that in the OP rayzg meant that the price changes. I understand now why you saw the two ideas as contradictory.

rayzg wrote:
It would be probably better to request for stock market mechanisms with these characteristics instead:

Sorry, wasn't trying to suggest you use that super-simple game concept for your game. Just noting that I didn't see the contradiction and provided an example of where they didn't contradict.

rayzg wrote:
* The stock market mechanism is featured as part of the game rather than the main focus of the game. Typically, it seems that games that focus solely on the purchasing and buying of shares rely on random, external factors to raise and lower share values to add tension to the game. It's far more interesting to let players themselves to that.

An interesting game that has this characteristic (it's positioned as a commodity game, but the effect is the same) is Friedemann Friese's game Fische Fluppen Frikadellen.

rayzg wrote:
* Greater ownership of shares doesn't simply mean greater wealth. Instead, it means that a majority stock holder can exclusively perform certain actions in the game that directly and indirectly affect the share price of other shares.

It does not, however, have this characteristic.

Wilf Backhaus
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Change and Fluctuation

MatthewF wrote:

I'm using the commonly-understood concept of "changes" without worrying about the OED definition of the word "fluctuation." It seemed clear to me that in the OP rayzg meant that the price changes. I understand now why you saw the two ideas as contradictory.

Agreed. The central issue is one of the "perfectness of information" requirement. Perfect information can live with a certain level of "change" while still staying perfect. Most non-chance games are like that. Change is what you get through making a play, say a Chess move, which alters the game situation within the rules. Change as fluctuation is an unpredictable or more or less random (Brownian type) move which, to be relevant, has to exist with the parameters of the game. There is plenty of irrelevant change which makes no difference to a game.

At their extremes both perfect information and fluctuations result in boring experiences.

Without fluctuations and the stochastic processes that underlie fluctuations an AI can determine an optimal strategy such as the ones for Tic-Tac-Toe, Checkers, and now Chess resulting in more draws than not when played at the highest level. When the optimal strategy emerges depends on the complexity of the game. I currently interested in the claims of the designer of Arimaa that his game is immune to such optimization by an AI program. The designer of Arimaa wants to argue that in his game draws are impossible and that his game cannot be beaten by AI currently or in the foreseeable future.

Too many stochastic processes or fluctuations and it becomes just the luck of the draw leaving no room for player manipulation or input. This makes the game a spectator sport rather than an interaction. So the ideal game from our player and game designer perspective has a certain level of perfect information even through change with just enough fluctuations to prevent AI optimization.

monica99
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auction mechanisms

I am curious...is this suppose to be a period mechanism? I think this could work if it relied on historical influctuations - I think that would be a satisfying gaming element but really, I think the game should be of an untraditional perspective

clearclaw
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Wabash Cannonball does not

Wabash Cannonball does not allow reselling of shares, but does support wildly varying and yet controllable share values through dividend dilution and a player-determined game length. Games are (usually) won and lost by succeeding or failing to ensure the game length required by one's investments.

Pampas Railroads is akin to Wabash Cannonball's stock model with the exception that sold shares to not dilute dividends and players may auction the shares they've previously purchased. Share value is somewhat more predictable than Wabash Cannonball's due to a fixed game length.

The Riding Series uses share dividend dilution combined with several meta-patterns:

1) Explosive early dividend growth -- but only if more shares are sold (thus also also diluting dividends)
2) Rapid dividend implosion in the mid- and late game.
3) The ability to trade basic shares for grouping shares whose dividends grow proportionally to the fall of the basic share dividends
4) Variable player-controlled game-length

Like Pampas Railroads, plurality share holders in the Riding Series have special powers.

At a broad stretch the factory and capacity model of Lokomotive Werks could be viewed as a share model, albeit one that doesn't allow sales, only translations.

The 1825 linear stock market is rather startingly different from the standard 1830-esque 2D market, supporting both purchases and sales in a very dynamic market game along with special powers for the plurality shareholder -- and in a 150 minute game that concentrates on portfolio management much more than stock market manipulation. (1860 has a rather curious take on this area, abeit in a 2.5D version which is rather more 1830-esque)

So Long Sucker and Intrige can both be amusingly viewed as share games, but do not (directly) support either sales or purchases.

Katherine
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To get back to rayzg original

To get back to rayzg original question ...

I don't play stock market games so cannot comment on mechanics in existing games.

If I was going to make a stock market game it would probably include a random mechanic at the beginning of each round to determine whether it was a bull or bear market. (or is this an existing mechanic).

Depending on what came out would determine whether shares were up or down.

just a thought.

rayzg
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My game design goals

monica99 wrote:
I am curious...is this suppose to be a period mechanism? I think this could work if it relied on historical influctuations - I think that would be a satisfying gaming element but really, I think the game should be of an untraditional perspective

Unfortunately (with regards to my intentions of searching for stock mechanisms), I'm trying to design a railroad-building, stock-manipulation game that involves some kind of pick-up-and-deliver system. I haven't seen a heavier train-themed game that involved actual train pieces in which you load actual commodities and ship them around the board.

That said, I could see why many designers tend to abstract out the pick-up-and-delivery aspect that I think should be in a train game:

* It would clutter an already cluttered board. That's probably why the Age of Stem board is quite bland; by the end of the game, the board is filled with pieces.

* Adding a train token (like a little box) would require that the board be enlarged to accommodate these pieces. Imagine how much you'll have to enlarge a hex in Age of Steam to make room for little trains that could hold all those wooden cubes.

* It can get very tedious. In EuroRails, for example, it can sometimes take several turns to transport goods from one city to another. Spending all your turns to move these goods is boring. Building track and manipulating a stock market is simply more interesting than this.

rayzg
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Concerns about the Riding Series (and 18xx) stock market systems

clearclaw wrote:
Wabash Cannonball does not allow reselling of shares, but does support wildly varying and yet controllable share values through dividend dilution and a player-determined game length. Games are (usually) won and lost by succeeding or failing to ensure the game length required by one's investments.

I only own Dutch InterCity, and considering the relative rarity and expense of Winsome's less known games, it looks like I might not have the chance to try those in the Riding Series or Historical Railroads System.

I managed to get my group to play a game of Dutch InterCity (after an 8+ year hiatus). The game wasn't received very well. The (losing) players complained of the following:

1. If you screw up early in the game (which I think means not getting a lot of shares that pay out high dividends early), then there's no way to catch up.
2. The game seems anti-climactic since by the middle of the game, there is less and less of an incentive to build track (track built earlier in the game pays out more than those built later)
3. It seems that buying shares in a corporation in which you weren't the majority share holder meant that you were losing out, since the majority share holder would get a bigger cut from what you paid.
4. Too much mental arithmetic (this is my complaint). I spent the time to calculate share values throughout the game (although incorrectly because I forgot to take into account that shares pay out significant dividends) so I somewhat knew how much was too much for a share.

Because players felt so strongly about point #1, I think they didn't put as much effort in analyzing the repercussions of the share auctioning system and bid somewhat haphazardly. Because of this, Dutch InterCity probably won't appear on the table any time soon.

Players suggested that Dutch InterCity would be improved if there were more chaos introduced into the valuation of a particular stock, perhaps a random element. I responded that other games based on this system (such as the Riding Series) add other mechanisms that make it much tougher to determine a corporation's share value. Is this true? Or are the issues that my opponents had with the game are invalid because of inexperience?

From a game design point-of-view, I'm trying to stay away from any auction mechanism. Although it's effective in creating game balance, I find it a bit overused.

My only concern about the 18xx system is simply the bookkeeping. I'm trying to develop my own rail-building/stock holding game, but I want to minimize the number of components because doing so will simplify the prototyping process.

Currently, I'm leaning towards the Acquire stock valuation model in which there's a 1-to-1 mapping between stock value and a corporation's assets (e.g. the number of tiles in your hotel chain dictates its share value). That way, I can have a simple table rather than the mental arithmetic of the Riding Series or the counter pushing of 18xx.

clearclaw
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Stock & Winsome games

As happens I have a spare copy of Wabash Cannonball left over from the last foreign order reprinting. It is yours for $45 +S&H. Additionally there is a P100-style reprint process for the various Winsome games back-titles:

Winsome Games -- P100 review requests

With a small exception the weaknesses your players identified in Dutch Intercity are all things I consider strengths of the game. Yes, if you screw up you're toast. The answer is to not screw up. Happily the game only takes 30-45 minutes so the risks are not large. Yes, the value of shares is increasingly determinable and can (won't necessarily) decline in the late-game. This makes the share auctions as the game proceeds increasingly delicate dances of opportunity and incentive. The split value of shares and the degree to which early investors proportionally profit is in many ways the heart of the game. Monopolies are good, but so is poaching and exploiting a fine revenue source that another player has built. While not in the same manner or degree as Wabash Cannonball or Pampas Railroads, Dutch Intercity is too a game of emergent temporary alliances.

The exceptions is small. I've no sympathy for the arithmetic complaint other than to note that most (good) games require continual arithmetic/logic problem solving, and to say Never play Lokomotive Werks! (Of course my definition of good may be self-serving)

In broad sum I suggest that your players were a typical mix of incompetence and opacity. Possibly Dutch Intercity just isn't their sort of game and thus just not the sort of game which should be put in front of them. We all have such preferences: For instance I won't play Power Grid and other like economic engine games without significant coercion. That doesn't make their experience invalid, just (mostly) irrelevant to the game in question.

Dutch Intercity approached well and on its own grounds as an incredibly small watch-like spinning mechanism of an emergent alliances and leverage game works very well indeed. If that's your thing it is a great little game. If it isn't, then well, it isn't.

I strongly suggest you play at least one each of Wabash Cannonball, Pampas Railroads and a member of the Riding Series (West Riding is likely the ideal starting game). While they all bear strong similarities they also have sufficiently systemic variation to be very interesting.

Bookkeeping can be a problem with the Riding Series. The system is inherently fiddly and requires considerable (oppressive levels of) bookkeeping (by German game standards). I accept that overhead as a simple cost of enjoying the system. but others may not be as forgiving. Both Wabash Cannonball and Pampas Railroads are much simpler on that score. Pleasingly, in all the games all values are determinable by simple board examination.

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