Expaining What The SC Economy IS

Tom's recent replies to our complaints revolving around the SimEconomy can be very confusing to those players who have not figured out that they aren't participating in a simulation of a Western-style Free Market system.

What SC uses is a Command Economy with a "costs-plus" profit margin. It is vital to grasp that those profit margins are dependent upon game mechanics that only occassionally mesh with free market principles and are locked into certain ranges based upon the factors of trade strategies, salaries, and timing within certain game cycles. Base Pricing, set by W3C and the defining trait of a Command Economic system, remains the largest determining factor for determining profitability.

Therefore, those of you expecting tradtional supply and demand forces to have the same effects in SC are operating on a false assumption.

Increasing supply or demand has little effect on product prices. Those are set by W3C and are not subject to the "invisible hand" forces of supply or demand pressures except with preset ranges of a few percentage points. Therefore, talk of increasing production in shortage products or heavy ordering as causing price changes is very misleading. Increased production would reduce the number of orders being converted to "Immediate" that would reduce top prices ,within the preset limits, from being inadvertantly paid for supplies, but would have little effect on overall prices. Likewise, reduced demand allows prices to depress to the bottom of the base pricing window, but only leads to "green" markets, a situation that we all know to be disastrous for suppliers, not for lower prices, but from unsold product.

The issues that are arising as W3C attempts to "scale down" are centered upon the small adjustments that are required to reduce factors of production and base pricing, while leaving salaries at relatively the same "realistic" levels. There is the problem from W3C's perspective. Base salaries have always been fairly realistic by real world standards while the rest of the model was at least 10times over real world numbers.

This is also why there is no overnight solution.

Should all other factors simply be reduced by a factor of 10 at a stroke, the entire price/profit structure would collapse unless salaries were reduced proportionally as well. We would have the bizzare situation of real world numbers in all other aspects of the game, but salaries would seem absurdly low.

This is not an excuse for W3C, or an explanation for all the other issues that are cropping up.

It is an attempt to at least explain what the SC economic model IS, so that much confusion can be avoided.

In addition, I will continue to harp upon this reality until W3C reps realize that they cannot use free market principles, as excuses, to explain away programming issues with their command economy model, shoving problems back onto players.

Bump over hezzy with something important

Seems to me what they need to do in the development environment is set salaries, costs, country demand, and base prices to real world levels, then adjust supply and production levels in order to generate "reasonable" profits.

From there they should be able to figure out a "cost of living" adjustment for cash levels as compared to the existing worlds, that's how much cash you have to divide or multiply by to balance it out in relative terms. This fixes the excess cash "problem".

Top top off with a truly free market to fill in the cracks you missed.

People seem to whine about "realism", but at least if realism is the goal, you know you screwed the system up if it stays wildly from the real world. Right now, SC is so disconnected from reality its hard to say what its doing right and what its doing wrong. And the price regulated economy we have currently helps obfuscate the problems, making it hard to fix them.

And to top it off, if the game worked somewhat like reality, we wouldn't have to have all these threads speculating how the game works...it'd be more intuitive, because we all live in the real world and grasp how it works already.

And either ditch quality or try to turn it into something real-world that can be intuitively grasped and makes sense. I think this is the real tough problem personally. Even in the real world, quality is often in the eye of the beholder, and can take many forms. A Ferrari isn't 100x more useful than a Fiat most of the time, even though that is the cost difference and the quality difference. Electricity is electricity, soybeans are soybeans. The only place quality might come in is in weapon effectiveness and in consumer goods, where a richer population would demand higher quality products.

Good points, Slare.

However, from the gaming perspective, a truly free market would result in chaos within this environment.

It would certainly be interesting, as we manipulated markets and played the commodities speculation game, but overall stability would be next to impossibe. Laguna could explain in great detail all the reasons while this would be undesireable.

In addition, it is my personal belief that Jozi and crew are playing their own game:

The great central planners attempting to model a world command economy, something I have never seen attempted before.

Well, you could put bumpers around the market to dampen the wild fluctuations out, kind of like currently, but without the absolute price caps. Say a 10% maximum price swing any given month, but no maximum or minimum prices.

For example, weapons on GR world market are just impossible to come by now. If the prices actually went up continually as it should be doing in a free market, demand might fall and supply will certainly rise as people build those corps for massive profits. The market bounces back and forth as supply, cost, and demand react to one another, and eventually you should reach an equilibrium range.

And if the equilibrium point is way out of whack of the realistic base prices you were aiming for, then you know you gotta fix something. Either demand is wrong for some reason (like weapon maintenance cost too low, thus people have too many weapons and drive weapon purchase prices up), or corp production needs to be adjusted on the supply side.

I think W3 has trouble fixing things because their system don't allow anything to reach equilibrium properly - without knowing where the equilibrium is, how can you know what to fix and by how much?

Also, from their comments it sounds like there are too many interdependencies among different aspects of the game that probably should have been made as independent modules that can be easily altered without excess unanticipated consequences cascading through the system. If that's the case, I really do pity the fool who has to dig thru this stuff and attempt to fix things.

The game is as trivial as it was back in 03.

Actually no, now its even more trivial because back then skill and dedication was needed to succeed, to be the best. Just like in every other competition, be it in the so called real or virtual world.

Every single SC$ was important, every % of efficiency counted, every worker mattered, every contract signed had impact, and made the difference between success and failure.

Back then it was actually important to buy when prices were low, play the market when prices were high, figure out what price to set for contracts, to pick the most efficient corps, or how to ride c3s and expand to make most of it.

Today? Today most of the mentioned are not worth the time and energy to bother with, simply because it's more efficient to make money in the so called real world, then convert them to assets virtual, and then order on "Immediate" disregarding everything else.

The only real difficulty about this game is how to navigate around, and how to handle annoyances.

I find these talks about "improving" the game, especially the economic model with the goal of achieving or replicating the real world, rather amusing. They all sound so insightful, complex and educated.


Any intelligent fool can make things bigger, more complex and more violent. It takes a touch of genius and a lot of courage to move in the opposite direction - Albert Einstein.


and that is the story of this game in one sentence.

I guess I don't understand what you mean. I don't know how the game used to be, but I know what we have now, and I know the kind of game I personally would like it to be.

So why not ponder how the game could be improved? Making an economic and military system that acts like the real world is no easy feat, and its a challenge some of us enjoy.

And I think Einstein was right....but I think he wasn't using the word "complex" in the modern technical sense....I think the correct word systems people use is "complicated". Complexity is extremely desirable in a system, complicatedness is not. Complicated systems break down easily (ie simcountry), complex systems can adapt, self-correct, and self-repair (ie real world economics)

I'm not sure why you seem to be under impression I was addressing you Slare, I was not, at least not in particular.

Because I posted after you? My post could have been anywhere else seeing recent "brainstorming" on the boards. FarmerBob pointed out one aspect of SC so I felt its appropriate to post my experience, my view, of the game in this thread, not elsewhere.

First you say you do not understand, then you demonstrate you actually do understand .. the quote.. the story of this game in one sentence.

Realistic, realism, real .. FarmerBob is correct saying people should "ban" such terms from their heads when thinking about SC.

No system on Earth today is capable of simulating the real world economics nor coming anywhere near to it, simply because if it was possible, the stock market could be predicted, crisis and depressions could be predicted or running a business could be predicted. Is that so? I think not.

Over the years the game managed to become more complicated, not complex as you say. Over the years the game managed to dumb down from important decision making to moving between numerous restrictions and limits. Over the years the game managed to trivialize what is sometimes being called skill to mandatory credit card use.

Yes, let's ponder how to improve the game, not to make it more dumb, complicated, nor trivial, but let's forget about the quest for the holy grail .. realism, because realism is not only impossible, at least for the time being, but also realism does not equal more enjoyment from playing the game.

That is true to a degree, but a good sim could be educational as well.

The SC command economy is somewhat interesting to me, as command economics is something with which Americans have little experience. I am curious to see how well W3C achieves their unstated goal of self sustainability.

Realism at the expense of playability is certainly undesireable, but where it can be implemented to add texture and flavor, it should be encouraged.

Unfortunately, we are all aware of W3C's track record in that arena...

Well, I am not looking for SC to be a total recreation of reality. But I would like SC countries working with amounts of cash and weapons on a scale that roughly mimics the real world.

For example, a world where countries have 200k interceptors laying around that can defend stuff thousands of miles away is just stupid and not very fun at all. If we knocked that down to say, hundreds of fighters with ranges in hundreds of miles as you see in the real world, suddenly war takes some skill and smarts and means something again.

But you need the economy to enforce these realistic numbers. Whether a free market or a command economy, that doesn't matter so much. I just think a free market would be easier to troubleshoot and adjust than the command economy...after all the free market will do most of the adjustment for you on its own.

.. not very fun for me*

fixed that for you.

The number of interceptors and their range is not question of good or bad game design. The number itself is a matter of opinion and range is balance issue at best.

True is the game was "fun" or better yet the game was playable when player countries had just over 10 mil populations and number of weapons were in 100s a 1000s.

Then someone figured out the game would be more fun or it would be good for business? if it was possible to increase population to 30 - 50 - 100 millions and have armies with 10,000s of each weapon type worth 100s of Trillions.

To me realistic numbers mean nothing. If realistic numbers or realism means something to someone else I wouldn't know, at least before I see some data, some survey on it.

As much as the argument that free market self-regulate sounds reasonable or true, it's important to see such argument in SC context, in SC environment.

Is SC environment similar to the so called real world environment? What principles apply in SC but don't apply in real world and the other way around?

Without writing useless essays, my opinion is that SC environment is so much different from the real one that its not possible to apply even the basic principle of free market economy - the invisible hand of supply and demand, in its true form.

When Russia stopped delivering Gas to Europe few weeks ago some countries, like Bulgaria for example, who were 100% dependent on such deliveries had people freezing to death just within few weeks. Politicians flew to Moscow to solve the problem and they did, because not only their negotiating skills were leet but also because Russia couldn't withhold their Gas forever as they needed to make money too.

In SC, however, its totally possible to crash the world's economy if it was not for GM (read artificial) interventions to the closed system and to the invisible hand principle.

Its not that W3C is experimenting with command economy, its that W3C is left with nothing else but command economy.

I was going to blabber on about the "perfect competition" economic model they have used to some extent in SC, but then I realized that we probably don't have enough players on each world to make the model behave like it normally would - ie crashes, intentional or not, being extremely rare to non-existent. So you are probably correct that the not-so-invisible hand is necessary to keep things running.

On the other hand, in a truly free market subject to wild swings, if they were to allow us to have more flexible contracts/free markets than we have currently, you may very well have some interesting behavioral changes occurring amongst the players - industrial and economic guilds specifically designed to keep price in a particular range that is beneficial to everyone - sort of like OPEC. Inter-guild competition. Competition for customers. I think that would be fun to see emerge and take shape.

And yes, of course there is always the "for me" unwritten qualifier on there. I obviously can't speak for anyone else! Ahh well, I guess I can always dream. Its probably quite a niche market

Slare,

Count me in that "niche market". The economic aspects of the game are definitely what intrigues me and I will happily spend many RL hours tweaking my economies, and just as happily pay real life money to avoid the war game aspects for the most part.

Indeed, the more players the more accurate simulation, and indeed more or less hard to predict, even if "economically" underlined, deviations from standard would make the game much more competitive.

That is why as many players as possible should have been the top priority for the GM and the community at all times.

Slare> Fair enough, my apologies for picking on you, but you'd be surprised how many people live in self-deception that they can speak for others.