A Good Market

When FOMC (formerly Greenspan... I don`t know who the new guy is) changes the interest rate, they are indirectly affecting the money supply and thus affecting inflation. This has to do with the rules of how much money banks must hold in reserves.

As for the Keynesian thing. The democracies of the world around that time were concerned that socialism and fascism were going to take over the world. It seemed that their economies were doing better than free market economies. Hence, many nations adopted Keynesian economic poilicies which gave democratic governments some reasons to feel good about increasing taxes and spending a lot of money.

According to Friedman, fixing the dollar to the price of gold made the great depression worse, along with various other measures taken by the government. Unfortunately, we cannot restore the game from that point and see what would have happened without Roosevelt`s New Deal.

This is pretty dry stuff, and not really relevant to this game.

Atronite: Yes, I do know that real governments print money. But that is very different than a non-government entity creating money. Credits are created every time someone takes a turn in this game!

With this kind of mechanic, there is no chance that a market will work. Interestingly enough, currency prices used to be fixed by governments--- probably for fears similar to what we`re experiencing here. However, it was Milton Friedman who proposed the idea that not only would nothing bad happen if you let the currency "float", but good things would happen!

Unfortunately, the economy in this game is a fake economy, so there`s really nothing you can do to fix it. The problem is deep rooted at the fundamental level. However, there are things you can do to make it a little better. Most real-time MMORPGs have a similar problem. It`s fun to take credits off of a corpse, but that creates a false economy. So they have many credit sinks in order to remove the credits from the economy. Sometimes, even this isn`t enough. But at least it helps a little bit.

"Basically, in the real world, we don`t just magically create credits or dollars"

Actually, we do. It has something to do with the idea of what happens if the government gives a certain amount of reserves to the banks, with a requirement that banks must always hold a certain percentage of that in reserve.

Not going to talk about it, but here`s a link in wikipedia that explains the concept fairly well:

http://en.wikipedia.org/wiki/Money_creation

Of course, this happens because most money is not backed by anything like gold these days.

I mean think about it.

Would you actually USE 2 million of each mineral in a given 24 hour period? Didn`t think so. In addition, this rationing is at the control of the admins, so if THEY believe it should lowered or heightened, then admins can do so (with approval from stephen of course).

indeed. you have described the situation exactly arkanix.

And because of all these credits appearing out of thin air, inflation would be rampant.

Of course, the supposed fix for inflation, price caps, results in another problem:

Shortages.

But here`s another thing to consider. Some players spend more time on average on the RT than others, which means that whoever spends more time on rt is ultimately going to have more cash, depending on their income and their ability to increase that income by getting better planets or spending endless hours clicking away to get the research level up.

On turn-based servers you simply do not have a problem of shortages (except maybe on ultra on some occations), because you do not have the problem of people spending more time on turn-based servers than others.

I think the best solution to the RT market problem is to RATION how much you can buy on the market at any given time. Maybe, say, limit the buying of each mineral to 2 million every 24 hours JUST FOR RT SERVER.

If we did that, I think it would go a LONG way to solving the shortage problem.

Acepac: You cannot allow market forces to direct the prices. The reason is that "credits" are arbitrarily created by everybody, and that is the unit of currency. Because of this, all prices will reach absurdly high levels very quickly so that only the very rich can afford them.

The problem is this. Let`s say that a loaf of bread costs 1 credit and I put it on the black market. But both me and you generated 10 credits from the game. There is no other resource in the game other than the loaf of bread. So you bid 10 credits for it and win the auction. Now I have 20 credits and you have none.

The next day, we both make 10 credits and you choose to put that same bread on the market. I now have 30 credits and you have 10. I bid 11 for the bread and win the auction. You now have 21 credits and I have 19.

The cost of the bread went up (even though the *value* hasn`t changed). This is called inflation and its due to an increase in the money (credit) supply.

Deiloche: Go study economics. Your comments don`t make any sense if you understand what I`m talking about in terms of economics.

I never said dollars were more "valuable", whatever that means.

Although there *shouldn`t* be a cap, there must be because of the worthlessness of credits in this game due to inflation. Basically, in the real world, we don`t just magically create credits or dollars. We exchange them for some resource. That`s fundamentally why the market is broken.

Anyway, your comments show your lack of understanding of basic economics. There`s really no point in me responding to you because you`re so hopelessly ignorant on this front.

Yes, you certainly understand this game more than me. But please recognize that your comments about how economics works are quite ignorant.

... ALL games greatly favour those who have time to spend... but if you WEREN`T a moron, I`m pretty sure you`d notice servers like SLOW and NORMAL where you don`t have to put in more than 20 minutes per two days and you won`t be far behind those who put in two hours a day, because you get one turn per 30 minutes...

And the fun in this game isn`t the missions... those are just a random aside. The fun in this game is competing with other people.

I`ll make a few comments, though.
-Yes, the economy isn`t that great.
-If dollars were more valuable than resources, then why are the richest people on the planet measured in networth, not physical dollar assets? Simply put, resources are infinitely more valuable than physical dollars, because physical dollars themselves are merely a standardized token with which one trades resources. Instead of trading eggs for wool, we sell the eggs for dollars, then buy the wool with dollars. Dollars themselves are absolutely worthless.
-I agree with removing the cap on prices. There shouldn`t be a cap. Supply and demand will eventually rectify any massive spikes. When prices grow crazy big, people will make empires to produce whatever it is that is in need, which will bring down the price. Take ultra, for example. When I made my tax a.miner, food rose drastically, at a very fast pace. Noticing this trend, a lot of people started making food, at which point it went to a static price of 20. Slowly, now that production finally exceeds consumption, prices begin to drop as empires who refuse to sell have to unless they wish to lose potential profit. Simple.
-Powerups are a very BAD idea. Do you know how insanely powerful the rich would become?!? Let them have their cash. Their cash is WORTHLESS next to the immense bonus any form of upgrade advantage would cause. The cash really is only useful for a UW... which is a pretty good sink of cash, by the way.

Anyway, as a new player, I will probably quit soon because this game greatly favors those who have time to spend. It would be nice for there to be alternate win conditions or missions that I can choose early on so that I can have fun without having to compete with the leaders.

Your economy is broken because credits have no value. They are created rather arbitrarily by "commercial". Thus, if you have a floating market, the prices for resources will continually inflate and get out of hand. Why? Because you`re introducing massive inflation by having a constantly growing money supply!

The real world keeps a tight control on the money supply. However, this may not be practical in a game. In other games with an economy, there is a sink for the money in order to maintain a balance of money in the world. There is no such sink in this game.

A simple money sink would be to allow upgrades on special powerups. It costs money and turns to develop a single level (defensive or offensive) of this powerup. Each use costs money. Note that the number of turns it consumes should be relatively small, but the amount of money should increase at a slow exponential.

The powerups can grant boons similar to artifacts.

But your market will never be healthy as long as you have this incredible inflation with no money sinks.

Price fixing is no way to fix a broken economy. Just ask the late Milton Friedman, nobel prize winning economist.

Anyway, if the prices for minerals are insane, then new players could sell a few to make a lot of money to do other things. The question is, is there enough other things to spend the money on in the economy to be worthwhile? If the answer is no, then there is not enough diversity in the economy for it to be healthy.

Anyway, the economy can be fixed. However, some fundamental understanding of economics would be helpful in order to get it working right.

In the real world, dollars are more desirable than resources because they are more useful for getting what you want. In this game, the resources are more important because you "spend" them to build ships, and that`s ultimately the only thing that you want. If there was another way to spend money on something critical (for example early defenses), then it would be a way for new players to make use of that money.

because people would post insane prices which new players could not afford

I just started playing, so just a question: Why is there a cap on prices? I was going to put some white crystal on the market on the RT server when I saw that there was no supply out there. But the max price is 1000! Since I always see those available for 1000, there is really no reason for me to sell any, only to buy.

gecky : exactly it`ll work, and if they dont do it, we lauch midnight raids on their colonys

maraudian just bring in kalzul :P or better idea...raise mineral prices back to 10k like they were ...well only on rt , as for the taxing...make it you can enslave viral and problem solved >>

lol..u cant force anyone to become any race lol...
unless its like..
player:i choose terran!
game replies: too bad, we dont have enough a miner...so ur gonna be a miner :_