[MUD-Dev] Economic model..

Brian Thyer brian at thyer.net
Tue Feb 17 14:11:35 New Zealand Daylight Time 2004

I was referred to this mailing list by a friend who suggested that I
might be able to get some good feedback.  I've been lurking for
probably close to 2 months and reading up on some of the old
messages during that time, just to acquaint myself with it a little.

I'm working as the economic designer for a mud me and a group of
people are putting together, currently as a part time venture.  I,
myself, don't have any experience designing an online economy, so I
was hoping to get some, well, experienced feedback from anyone on
the list who'd be willing to give it.

I was given a few basic parameters around which to work, and I
started developing an economy.  The first thing I wanted to do was
avoid the pitfall of hyperinflation.  The concern being that, over
time, like Brazil of the '90s there would be an excess of currency
(let's call it gold coins in my economy) to the point that there
would be ramped devaluation of the coin, decreasing the buying
power.  For anyone not familiar with the Brazil hyperinflation, some
employees would actually get paid twice a day, once at lunch, once
at the end of the day.  The idea was that they could then take their
money and go buy bread before it rose another 50-100 to even 1000%
by the end of the day.  I don't want an economy where players are
forced to spend their hard earned cash for the risk that when they
log in next, the price will have raised another 50%.

One way around this was built into the parameters I was given, that
most coinage/cash in the world would be minted by the players and
towns themselves, rather than picked up off the rats found in the
newbie yard.  This runs into another built in parameter, the
limitation on materials.  Some materials, like animals (fur, meat)
and wood, etc, will be fairly accessible at a constant rate.  Others
will be harder to find and keep a good source of (iron, gold).
Obviously there will be exceptions, a lot of players *could* hunt a
local species into extinction, and a person could find a nice iron
mine and hope to keep it a secret, but for the most part this is how
it'll probably work.  Meaning that, as gold (and by gold I mean any
resource minted into coinage) goes through fluxuations in
availability (one gold vein used up, a month real time before anyone
else finds a good new one) the amount of coin and its value (buying
power) would fluxuate as well.

This brought me to another concern though.  If gold coins are kept
rare through this method (with a relatively limited amount of them
in the economy, they would become rare) there should be another way
for players to purchase items.  The idea I got was to make it less
of a coinage based system, and more of a trade based system.
Coinage still has its uses, it's the base value on which all other
items are compared; but this allows players to find other ways to
obtain items and work their way up in the world.

So the way to look at it would be, in a village near a forest full
of not only the obvious (trees) but a good number of hide giving
wildlife, 1 gold coin might buy 4 units of wood and 3 units of hide,
where as in a bigger city surrounded by farm land (where there's
considerable less wood and wildlife to be hunted) you're looking at
being able to buy only 3 wood and 2 hide for every 1 gold coin.
Because there's more hide and wood available at the village, its
value has deprecated a bit.  However, because it's so much more
available than gold (assumedly) the players in that village can get
their hands on it easier and purchase from vendors based on the
number of units of wood or hide they have.

Players who craft items will have the ability to own their own shop,
hire NPCs to sell their items, the whole 9 yards.  Tied into that,
they'll have the ability to set the exchange rates for their
individual store as to wood/gold, hide/gold, etc.  There will be a
town set standard that will reflect the actual value based on known
available resources, but this allows players to set their store how
they feel they want it.  The advantage is, say, for a wood crafter,
he can set the buying power of wood closer to the value of gold.  SO
if the village standard is 4 wood / 1 gold, he can set that down to
2 wood / 1 gold.  So if wood is easier to obtain in the area than
gold, he's likely to attract more customers.  The advantage here
being that, he no longer has to go out and gather more wood, it's
coming right to him.  He can simply collect the wood other players
have spent at his store, and trade skill it into something he can
turn around and sell.

Obviously there's more to the economy than what I've mentioned.
I've done some full out charts tracking the flow of value (cash,
items, resources) into the economy, through the economy, and out of
the economy, in an effort to not only avoid hyperinflation as I
mentioned earlier, but also to avoid other economic pitfalls such as
a recession.  There are some holes in the economy that, if left
unchecked, could allow players to tail spin the economy into one of
these 2 disasters if they don't tend to things properly, and I have
yet to figure out the right series of checks and balances to resolve
those issues yet, or even if I should simply leave it for now and
wait to see what happens in the game itself.

At any rate, any thoughts/feedback/ideas would be helpful.  As you
can tell, it's very much a player run, player driven economy.
Players mine the resources (or hire NPCs to mine for them), players
craft the items (and the coinage.through the player and NPC run
towns), and players set the prices and exchange rates for goods and
resources.  One thing that some of you may be thinking of (which I
forgot to mention) is arbitrage.  Arbitrage is where you buy an item
in one market for a price, and turn around and sell the item in a
different market for a higher price.  This is, obviously, possible.
However, it is currently in the plans to restrict travel.  Not to
restrict where players can go, but rather by the speed and safety by
which they can get there.  Making it unsafe to carry large
quantities of merchandise/resources across distances without many
armed guards, or simply by making it a hassle to the average player
to transport items from place to place on a regular basis, I hope to
keep each separate town/village/city/kingdom economy just that,

Thanks again for your time and any feedback anyone might care to

- Brian
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