[MUD-Dev] Economic model..

Daniel.Harman at barclayscapital.com Daniel.Harman at barclayscapital.com
Wed Feb 25 11:26:16 New Zealand Daylight Time 2004


Michael Sellers Wrote on 25 February 2004 04:06

> This model also helps remove the incentive for easy arbitrage,
> where an item is bought for one price in one place and sold at a
> much greater price someplace close by, without adding any value to
> the resource.  This effect along with hyper-inflation has been the
> bane of in-game economies going all the way back to Habitat.

What is the issue with arb? Real markets have plenty of it, and its
one of the mechanisms that keeps the markets efficient. The only
possible problem I could see is if people can buy enough of a
resource to control the prices on it. If that's the case though,
then two things may happen :

  - No one buys the product.

  - Someone else undercuts because the margin is great enough for it
  to be worthwhile.

In Everquest, players moan about traders who buy up items
immediately from impatient sellers at a discount and then put them
back on the market for more. Is this more what you are referring to?
If so I don't even see that as proper arb, its simply taking a
position on the market.

If you really dislike the mechanism, then one way to kill/limit it
is to attach a percentage transaction cost on trades. Then the
margins have to be fairly large for it to be worth the effort.

Personally I'd love games to setup markets that took a few lessons
from the real world markets, and facilitated more complex trading
strategies. Its would add an interesting axis of entertainment to
the game. The first things to add would be player leasing of
ships/vehicles (required for goods transport), insurance markets,
contracts (should be limited so that humans are not required to
arbitrate), multiple exchanges with limited memberships (creates arb
opportunities), commodities markets (with seasonal variations
etc). Maybe I'm biased though because I work in investment banking
;)

Dan
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