Economy Model Version 0.2

[Andz83]

interesting discussion you brought up here, fellows! go on!

[The Joker]

Guildmaster:

I don't think there is a level which is the reasonable amount of a good that people will buy. If people earn more money they will buy more of that good. This means that there is no amount where the demand is satisfied, since the demand is only a function of wealth.

Therefor I don't think it is possible to go anywhere from the bottom of the demand and up. This means that the demand will never be satisfied, as if people get one amount they will just demand more.

The demand groups:
Yeah, they look really good now. I would replace the name "labour" with the name "services", as labour is also being used in production, but consumers don't demand labour. They do, however, demand services. But otherwise is looks really good!

Replacing one good with another:
Yeah, this is excactly what I think! The demand groups will not really be restricted to goods or to services. Maybe the demand for transportation could somewhat be satisfied by workers carrying people around! All I am saying is, that any good/service in a demand group should be able to replace any other good/service in that group.

I agree about one good not being able to cover all of a demand group. But again I must object to your ways of accomplishing this. For once, there will be no such thing as oversupplying the demand. After all, it's not you who supplies the people, it is the private sector (well, not if you use communism, but anyway). And second, it is not like people simply REQUIRE any type of good. If there would be no cars in Europe, it's true, people would demand more pulic transportation. But this would simply make the price on public transportation go up, and eventually more public transportation would come. But if people can't get the public transportation they want, then what's the big deal? they'll walk! Sure, they will be a bit cranky (this would be portrayed in the gov model - when the wealth of a class drops they will become less happy with you. But we shouldn't worry too much about that right now), but so what? What will eventually happend would be, that there will be a demand for cars, which will cause either import of cars or the startup of car production in Europe. If your reasoning was completely true it would mean that people would spend A LOT more money on transport than they would otherwise, and that's not really realistic.

But there is some truth in what you are saying. Cause when determining the wealth of the people (calculated as the amount of goods they can buy) having only one good/service in a demand group would mean that the amount of it would "count for less" than otherwise, which would mean that the real wealth of people wouldn't be as high as it would, if there were more goods to satisfy the demand in a demand group.

Ciao!

------------------
"It is only when we have lost everything
that we are free to do anything."
- Fight Club

[amjayee]

Whoa dudes! This thread is growing in size every minute. I will need some time to digest this before I can give comments. This discussion sounds good!

[Guildmaster]

Ok so the demand groups for trade goods v3.0 is as follows...

Food
Housing
Communication
Transportation
Textiles & Manufactured Goods
Luxury Goods
Healthcare
Education
Skilled Services
Unskilled Services

Ok I can think that perhaps all trade goods might fit into one of these categories without creating an illogical arrangement...
And if not we can always adjust it later.
Slaves would probably count as Unskilled Services...
Engineers would be Skilled Services, but I'm not sure about importing/exporting them.
Q: Can you export a good from one category and the imported country imports it as another good? Or if something crosses over would it count as both?

eg. Say for example Vietnam has an extensive university system but Mexico does not. Mexico, however, has a serious demand increase for healthcare because of a recent outbreak of the Junta Virus. After importing medecines for a while, Mexico decides to send students over to Vietnam to study medecine there and bring it back home. So my question is what is Mexico importing?
Is Mexico importing healthcare in the form of trained Mexican doctors or is Mexico importing education in the form of the training itself? And is Vietnam exporting healthcare or is Vietnam exporting education?
I would think that education is the good being exchanged EXCEPT... this should supply the healthcare demand in Mexico, and if we consider education the good being imported where is the healthcare demand being met?
So shouldn't the students count as both then, both in import and export?

I can think of other goods as well, most of them where education is concerned... but still others. ie. aren't telephones manufactured goods that satisfy the communications demand?
Or are manufactured good only stuffs that don't fit elsewhere?

------------------
Peace and trust can win the day despite all your losing
-Led Zepplin

[The Joker]

Guildmaster:

Yeah, that sounds reasonable. But maybe we should abandon the skilled and unskilled services as groups. Couldn't they in some way be fit into the other groups? I mean, slaves could propably replace/be replaced by vacuum cleaners or food processors, which would mean that they could be put in the manufactured goods group. The same with the other services - many could go into the luxury goods group.

But anyway, I don't think we would have engineers as services that consumers would buy. It's not like you go out and rent an engineer like you buy a car. Engineers (or, propably, the most educated workers) would in stead be demanded by the producers, when making the goods that people demand.

About services:
I think that services should be radically different from goods: There would be two kinds of services. The first would be unmoveable. This would be doctors, hairdressers and such. To make it possible for a supply of these they would have to be present in the province in which people demand them. If they are to be moved the people would have to be moved. But people aren't imported/exported like goods. In stead the movement of people would be determined by a migration model (which is still to be made). Alternatively you could force people to move, but this would upset them.

The second type would be services that would be moveable to anywhere in the world without any shipping costs. this would be programmers or website designers. A programmer can sit in Kamtjatka and program for a coorporation in Manila without any problems.

Generally I think that we must seperate goods from services, as they are very different.

But what about that demand system? I am looking forward to see something great!

------------------
"It is only when we have lost everything
that we are free to do anything."
- Fight Club

[amjayee]

I'm feeling quite embarrased, since the game's economy model seems to be something I can't quite understand; I don't have any idea how to make things better, or which one of you is more correct. So I just say, that I think I agree with Joker with most things, but can't tell excactly why. Also I think I will just keep reading and comment when I have something to say.

About demand groups, I think they are good now. But perhaps each group should have goods and services satisfying the demand? Communication would have some electronic devices, and couriers, mail carriers, pigeons and such... though I don't know how to do this. Perhaps manufactured goods and services should be removed and included some of them in each section?

To answer Korn's question, a demo would be good, but I would rather see that we make the demo of the final economy system to test it; unless, we might waste lots of time. So we would need to design the model to certain level first.

[DarkCloud]

Say the system works like this

There are 100,000 people
20,000 are rich enough to afford 2 Grade D Cars
80,000 are rich enough to afford 1 Grade D Car
100,000 are rich enough to afford 2 Grade E Cars

Now suppose they do not all want to spend their money the same way.
of the 20,000 only 1/5 buy 2 Grade D Cars (Wealthy people can be frugal)
of the 20,000 there remains 16,000 people of whom 2/4 buy 1 Grade D Car and 1 Grade E Car
that leaves 8,000 people. Of those 1/4 buys 1 Grade D Car
leaving: 6,000 people, of whom 2/3 buy 2 Grade E Cars
of the remaining 2,000 all but 1/10 buy 1 Grade E Car and 1 Grade F Car.
which leaves 200 people who merely buy 1 Grade E Car.
---
The system works the same way in percentages for the 80,000 and the 100,000.

[korn469]

i have been doing lots of research on the internet in the past few days about economics and i have found lots of interesting stuff (including one page full of formulas) i like the jokers but i am not yet comfortable enough with it to endorse it as the final sysytem to go with...it is realistic and has lots of depth but i think it's missing the elegence it needs to be our final solution...

amjayee

quote: To answer Korn's question, a demo would be good, but I would rather see that we make the demo of the final economy system to test it; unless, we might waste lots of time. So we would need to design the model to certain level first.

i know that you are a programer and if u think that our programming resources are too limited then i will respect that and totally defer to your opinion but would it be possible to make a very simple (nonvisual) demo of our game that we could use to test specific instances of how our system would work? it shouldn't be able to simulate the entire final economic system but just a part of it...we could use it to help design the final system, i think that with something as complex as this we need something that can give us reliable examples that we can use to iron out problems in our design...if we have holes in our final design then of course the demo will have holes in it...did anyone read the diplomat's economic/trade model...it was kinda on the lite side when it came to goods but it did have some good ideas that i liked in it

korn469

[DarkCloud]

ECONOMIES
----
There are three countries; country A, B, C
Country A is superrich; percapita income= 500 gold per year but cannot produces
only 10% of total goods because their wealth comes from vast gold mines and not hard labor.
This creates demand. They consume 60% of total goods..
Country B is the moderate country; percapita income= 100 gold per year.
They produce 70% of total goods and consume 30% of total goods. Their wealth comes from trade.
Country C is superpoor; percapita income= 20 gold per year.
They produce 20% of total goods and consume only 10% of total goods. Their wealth comes from
production.

In each country there are 5 classes, excepting country C

1.Rich (Earning 100% more than the average person) [Needs High Quality Goods]
2.Upper-Middle (Earning 50% more than the average person) [High/Medium Quality]
3.Average (Earning 500/100/50 gold per year) [Medium Quality]
4.Lower-Middle (Earning 50% less than the average person) [Medium/Low Quality]
5.Poor (Earning 100% less than the average person) [Low Quality]

The porportions in each country are as follows
A- 1.20% 2. 15% 3. 50% 4. 5% 5. 10% [More likely to want High Quality]
B- 1.10% 2. 5% 3. 55% 4. 10% 5. 20%[More likely to want Medium Quality]
C- 2.5% 2. 0% 3. 60% 4. 0% 5. 35% [More likely to want Low Quality]

Country A consumes goods from Itself (High Quality) Country B (Medium Quality) and C (Low Quality)
Country B consumes goods from Itself (Medium Quality) and C (Low Quality)
Country C consumes foods from Itself (Low Quality)
----
If country B only consumes resources from country B- say they embargoed C. Then there will
not be enough resources for country A making Country A's food/car/etc. prices skyrocket.

If country A embargoes B then not much will happen other than the Rich and Upper-Middle Classes
perhaps becoming a bit discontent

If country B embargoes A then A will likely collapse because its trade system mostly comes
from B. However what goods they have will cost too much and most of A will soon become poor.
Unless country C increases production which will cause country C to increase in wealth.

If country C embargoes A then not much will happen except Country A's poor will become poorer
having to buy medium priced goods. Country C will not suffer at all except for the top 5%

If country C embargoes B then not much will happen other than Country B's poor perhaps
scheming a revolt for they cannot afford anything and together the Lower-Middle and Poor
comprise 30% for B's pop. Country C will not suffer except the top 5%.
----

Backup Quote Lines:
-------------------------------
--Remember: A smile is but a frown turned upside down... (Smiling Faces Tell Lies, And That's the Truth!)
--Attack can come from above, behind, around. Or within... (ALIEN)
--A little known fact: There once was a Republic of Biafra in Africa... Which dissolved in 1970...
--A little known fish: There once was a fish called a bichir in Africa... And there still is...

QUOTE LINES FOR RENT

[The Joker]

Maybe things would be a bit easier if we had a list of the things we wanted the economy model to do. Then we could see what features were required and what could be removed.

Some features that we want in the economy model:

- A private sector that works autonomously from the player.

- A public sector, which is what the player controls.

- The ability for the player to build things (this is a bit obvious, but in the "professional" economy models I have found on the web this was not the case)

- Different classes, all handled realistically, and a relationship between them. Each should have their own role in the production. These classes should also be linked to the political/government model.

- The ability to portray the wealth of the people, in different societies and tech levels. Each class should have it's own wealth level.

- Have everything done realistically, and have the classes work like they would in the real world - workers provide labour, the upper class provide capital etc.

- make it possible to portray all societies of mankind with the same economy model.

- Make it possible to have a recession, and let it spread. It should happen via the same economic mechanisms that would always work, which would make sure that it would work realistically. It should also happen because of a realistic cause - an oil crisis, a war etc.

- Have 50-60 goods, raw materials and services in the game. Everything made in the economy should either be one of these goods or unit equipment/city improvements. The people would demand some of these goods, others would be demanded by the production. More wealth means people will demand more goods.

- Have a supply/demand calculator for all goods in all provinces.

- Have trade between provinces done in a realistic way.

- Make it possible to make embargoes and blockades against your enemies.

- Make it possible for a civ to control the supply of certain goods, like oil or machines. The civ that controls enough goods can control the world.


Are there any other things that we want our economy model to do?

Maybe we could try to get some help with it from the outside? Of cause this would mean that we would not make this model by ourselves, but if we could just get some help on how to get started it would be great.

PS: Korn, yeah I have also searched the web for economy models. I think we might have found the same one - I found a page with lots of interesting things, with a way to handle goods and more. Unfortunately I don't understand what is written on it. Maybe it is in some kind of programming language. I don't know really.


PPS: Darkcloud, the thing that makes economy difficult is to find out why someone are rich and some poor. It all has to be integrated into one system with a lot of variables that rely on each other - if people get wealthier they demand more goods, which means there will be more demand for labour, which means that the wages will go up, which means that people will demand more goods etc etc.

------------------
"It is only when we have lost everything
that we are free to do anything."
- Fight Club

[Guildmaster]

I like the idea of this stating what we want the economy to do...

1) Not just enough goods, if a player controls just one good, perhaps one key good then that will propel that country to economic and inevidable ultimate prosperity. Eg. Not using the oil example, look at how the top two nations in the world in terms of wealth and industrial power... those that produce the most, sell the most, etc. United States and Japan. what do they have in common?
a) Both happen to be the two largest manufacturers of automobiles in the world. Since the dawn of the 20th century, the demand for "transportation" has been the key to success, and notice how when England's auto industry was flourishing, England was flourishing. But when England's auto industry began to fall, England fell into a recession. Similar situation in France. Look how the most powerful and prosperous industrial nation in Europe (Germany) has a dominance over automobiles as well. I am beginning to see French cars make a comeback in the global scene and similarly I am also seeing France become a major economic power again. This is not a coorelation, this is a cause-effect relationship. Cars are one simple trade good with an enormous demand that fuels an entire world of economies, and prosperity depends on it. Period.

The advent of the automobile is second string to the railroad industry in the 19th century (again, the transportation demand being met.)

You can see the impact just by looking at the world around you, in that the poorest countries in the world today have poor infastructure and have no auto industry or nothing to do with it. Look at what it fuels: you have jobs created in the manufacture of the cars, oil being produced, mechanics to fix them, salesmen to sell them, etc etc etc. Transportation is FUNDAMENTAL to success. This is not a new thing, either. the Ancient Roman empire had more than 50,000 miles of highways which is more than we have right now in the US and the romans didn't even have cars!

Right along with transportation is Communication. If the railroad industry was the key for prosperity in the 19th and the auto industry was the key in the 20th, to what industry will the torch be passed for the 21st? Electronics and telecomunications. Information exchange. Internet. Look how readily the world is being transformed by this revolution... soon you will see countries that have poor or no communications networks falling the wayside and the world leaders in this will become the new global powers.

Again I forgot what I meant to say when I began this rant...

Ok, so there wil become a point when a global power isn't just a kingdom that can feed it's people =Þ by producing enough food for them to eat. NEVER underestimate the power of communications trade good category and transportation. Becoming a world leader in either of these two categories (ie. by supplying a surplus enough for your own country and a few others, meeting a multinational demand) spells out economic prosperity end of discussion. It doesn't take long either, you're poor once the demand is met BOOM you're rich. Volkswagon was formed, a few years later the 3rd reich was ready for war.

We need to have a "timed demand lapse" meaning the longer a demand goes unsatisfied the more initial money is generated once a supply is found.


------------------
Peace and trust can win the day despite all your losing
-Led Zepplin

[korn469]

ok here is what i imagine when i imagine the economy model...

first i imagine that we have a wide array of goods almost all of these goods have to be processed in some way...the automobile industry certainly changed the world, but it didn't develop until after both the Steel and Oil industries had reached a certain level of of development

The Technology of development

ok when the game first begins you should have very primative technology, which limits your economic expansion in many ways

an ancient level coal mine would be very small and close to the surface...things like ventilation, elevators, explosives, even battery powered lights are centuries away...so extraction of minerals in the ancient era should be severly restricted...

I mean an ancient roman miner didn't even know what titanium was much less where to look for it and how to process it...

so at least in the ancient era there should only be a very few resources available to mine, and the amounts available for extraction should be very limited

copper
tin
gold
silver
?iron

this limits the number of good that can be made...i mean without advanced metals and alloys there isn't any chance for you to produce a stealth fighter...or a dodge stealth for that matter

over time new uses will develop for old resources...copper wires in home electrical systems and copper interconnects in computer chips

i don't think we have to worry about social classes in this game...i think that a bell curve could easily address the social classes...basically i think we should have three types of interactions

business and consumers (people)
business and government
business and business

like a cologne (cK one) producer will sell its good to the people
while an aircraft corporation (Boeing B-52) will sell it goods to the government
while a aluminium producer would sell its goods to a soft drink corporation (alcoa sells aluminium cans to coke)

also each business should be represented by a factory on the economic map...if there isn't sufficent demand for a certain item then the business that produces it should go bankrupt (disappear from the map)

trade routes should appear going from sellers to the most profitable buyers, producers can sell to a variety of locations and consumers can buy good for a multidue of sources...producers look for the highest buying price and consumers should look for the lowest selling price...this process should be dynamic and should get updated everyturn

the player should be able to tax trade routes with duties (goods going out of territory) and tariffs (goods coming into the territory)...the player should also be able to tax the producers with excise taxes or value added taxes (taxes put on at the origin) and sales taxes (taxes put on at the destination)

the player should also be able to ban production of certain items (guns, CFCs and drugs all come to mind)

hmmm that's all for tonight i need to get some sleep

more to come tommorrow

korn469

[Guildmaster]

Hmm resources, wasn't I supposed to do something about that? Well I didn't forget and it's not like I don't have the time, I'm just lazy. Well I will get to it later I suppose...

Anyway I think that technology level is relevant no matter what kind of material you're working with. It is theoretically plausable albeit unlikely that a civ might learn how to mine bauxite ore and extract aluminum from it using wind power and do this without ever noticing how much easier it is to make copper. That is a stretch of course, as one needs to know how electricity works, etc.
Supposing each of the materials is considered a technology in-and-of itself, and that working with that material requires that same technology...

Iron technology means you have the following knowledge:
How to prospect Iron Ore
How to extract Iron from Ore
How to manipulate Iron into desired shapes
How to make Iron alloys (assuming you have all other needed metal techs)
Suggested uses for the metal*(maybe?)

So these become simple additions to the tech-tree which we are doing.

Iron
Copper
Tin
Gold
Silver
Aluminum
Titanium
Lead
Magnesium
Zinc
Tungsten
Chromium
Uranium

Let me go look some stuff up I will get back to you

------------------
Peace and trust can win the day despite all your losing
-Led Zepplin

[amjayee]

This thread is truly flourishing. I'm interested to see what this will lead to. Korn and Joker were talking about some page with economical info; I might check it out, if I understand it. Send the link here.

Korn: Making a graphical interface to that kind of program would take very much time, but yes, I could make a simple text-based simulation program, that first creates randomly (using some rules of course) the material for simulation; like civilizations, provinces, etc. Then it starts to create production and trade between them, storing the info into a file. From that info could be created Excel spreadsheets and graphs, so the data could be analyzed.

I would be happy to do that; I need some practice in algorithms anyway. I just need to know, what you would like the program to do and simulate, and what kind of model it would use. So, create some kind of model and test situation, and I will make it. At the same time, I would have an opportunity to show you what kind of design documentation programmers require.

Anyway, I think this would be quite easy. But I really suggest creating a little more complex model than your first suggestion; it should have most of the same elements as the final model, just a little simpler; this way, the tested model could be used as a basis for the final one. So, perhaps we should halt the fruitful economy discussion for a while, and start constructing the economy model from ground up, and test it, refine it, test again, stc., until we have the final model ready to insert to the game. This same system could be used also for other models, like population. At some point pop and economy models could be combined, and we could see what happens.

[amjayee]

Hmm. This thread has been inactive for an entire week now. Oh, well. Please discuss these suggestions, making programs like that might be a good way of making some progress in this project; they would serve as foundation for the final game programming, and help find out about the weaknesses in the design.