[MUD-Dev] D&D vs. MMORPG "complexity"

Dave Rickey mahrinskel at brokentoys.org
Wed Apr 30 11:37:33 New Zealand Standard Time 2003

----- Original Message -----
From: "Jeff Cole" <jeff.cole at mindspring.com>
> From: Dave Rickey
>> From: Marian Griffith

>>> Sorry, but no, this is not true.  Economy is created by
>>> scarcity.

>> No, *value* is created by scarcity.

> Not by scarcity alone.  Scarcity is just supply.  You also need
> demand to create "value"--at least any utile concept of "value".
> Economy occurs when the difference in value of a good between two
> actors exceeds the sum of the costs of transacting.

Define value, then.  "The value of a thing is what it will bring" is
the definition I'm most comfortable with, this would seem to
pre-suppose demand.  But we've pretty solidly established that
scarcity *alone* can create demand (in the case of rarities).

However, demand alone cannot create value, we all demand a constant
supply of air, yet it has no value.

> It is hardly difficult to conceive of a market situation in which
> making a given good scarcer does not increase the market value of
> the good because there is a substitute good in the market.  That's
> just a market in the elastic region of the demand curve for that
> good.  It happens all the time in MMO*/MUDs as the supply of a
> given item increases and depresses the value of less powerful
> items (independently of the supply of the less powerful items).
> The decrease in value of the less powerful items much more often
> results more from the threat of item-substitution than from an
> increase in supply of the less powerful item--if only because the
> costs associated with selling the less powerful item will exceed
> that marginal value of the less powerful item.

If people really reacted rationally to marginal value, yes.  They
don't, small increments of utility at the top end are assigned value
far beyond those of an "efficient" market.

>> ... water easily acquired and highly fungible.

> I am not sure in what way you consider water "fungible".  The fact
> that companies can charge a significant price for bottled water is
> evidence that water is not fungible, let alone highly so.

This is a comparatively recent occurrence, and an example of market
irrationality.  Until the 90's, tap water was considered perfectly
acceptable for drinking and the idea of paying soda prices for plain
water seemed ludicrous.  Increasing paranoia over the purity of tap
water, fed to the point of hysteria by the "green" movement and
corporate marketing in turn, brought people to the general belief
that tap water wasn't really potable without filtering.  The most
contaminated tap water in the US is far more acceptable for drinking
than that available to 90% of the people on the planet, but an
almost pathological fear of contamination has become the norm.

In other words, through historical accident we have a situation
where there is a *perceived* scarcity of drinking water, and as a
result bottled water has value.  Perception creates reality,
scarcity (real or not) creates value.

> I would argue that developers have been too focused on managing
> economy only through supply and have too long ignored demand (much
> to the detriment of their economies).  The greater the
> inelasticity of demand, the greater the threat of monopoly to the
> economy.

> I am not aware of a MMO*/MUD that has manages its economy through
> dynamic management of demand for its resources.

Camelot does, but through a deliberately indirect method.  Rather
than floating the cost of making things through manipulation of
ingredient amounts or some such means, I took advantage of the
irrational response to small increments of utility value at the high
end.  Although I didn't have the terminology at the time, my later
studies of adaptive systems established that my intuition was
correct: non-linear responses have to be integrated into feedback
loops for complex systems to stabilize.

In Camelot, you have a random chance of producing a given "Quality"
rating on a product.  7 chances in 50 to produce any quality from
94% to 99%, 1 chance in 50 of producing a 100% quality
"masterpiece".  Each item that is deemed of insufficient quality and
discarded leads to a 30% loss of materials (50% if sold to a
vendor).  In practice, the higher the quality desired, the more
"remake" cost that will be incurred in order to achieve it.  Where
the base cost of a 51st level weapon may be around a platinum piece,
getting a 100% version will cost 15-20 platinum.

The "desired" quality is almost entirely the product of the
perception of the user, the combat-power difference between a 98%
and a 99% weapon is minimal, while the 99% will be nearly twice as
expensive to make.  100% items will be many times more expensive
than 99%, and again the combat-power differential is minimal.  This
pattern was reprised in Spellcrafting, although imbuing a "normal"
amount of magical bonuses into an item carries no risk,
"overcharging" has a risk of destroying the entire item.

The result is that although the *real* difference in combat power
between 99% non-OC'd gear and 100% with a +5 overcharge is only a
few percentage points, the cost difference is very high.  Players
make their own judgement of where the increased effectiveness no
longer justifies the increased cost.  And, in an extremely
left-handed fashion, demand self-adjusts.  It is my belief that any
effort to *directly* moderate supply and demand is the equivalent of
central economic planning: The natural "irrational" response of the
economic participants will completely invalidate your efforts.  But
if the moderating effects are "organic" to the system, and a
byproduct of the participants own actions, the system will stabilize
with a minimum of fuss.


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