The Value of Money

[Straybow]

A big penalty like that will be a significant detriment, but not enough to counterbalance hurry 80% IMO.

[Whoha]

I think it is that energy is inflationary. It goes through the roof relative to production.

[Kataphraktoi]

Originally posted by Chaos Theory
Yeah, one way to look at it is: would you rather spend 1000 ECs productively this turn, or would you rather spend 1000 + interest ECs productively next turn, for each amount of interest?

I would say if i could spend 1000 EC this turn and get at least 51 credits per turn BACK as opposed to 50\turn if i held them then i would spend them.

In SMAC money has no time value. There is no inflation, no hinderance to the growth of an economy to any arbitrary extent.

QFT...sort of. After all 4ec\1 min is true even in the lategame. But, you wont be gaining anything either.

I see this all the time in the lategame, a single EC or even hundreds become worthless. Once i get to the 'build a facility in one turn in every base no matter what stage(when your blazing towards the ascent) further EC=worthless.

That said i had a hard time understanding what the debate was all about when i first read this thread, and i still am having a hard time understanding it. I am also not sure of ANY of my statements above being correct and am actually confused by this topic, very much so. Im more of a 'just do it and find the best way' person...

[Chaunk]

100 ec's on turn 1 are worth at least 10000ec on turn 100. At turn 100, there's very little game left, so any ec spent must bring in immediate returns - it's probably best used rushing units or SPs (via upgraded crawlers), as rushing an energy bank is simply pointless. I may even tack another 0 on the end of the turn 100 figure. But, at 1% interest, 100 turns to 256819.3 ec after 100 turns.

And I'd still rather have 100 on turn 1 than 256819.3 on turn 100. I'd say the interest rate is somewhere around 1-2%. Almost certainly not higher.

Edit: SMACX is a very non linear game, resource wise. Any given resource is worth considerably less as the game goes on.

Consider a base producing 5 nuts on turn 1 (3 excess). It grows in 8 turns, which is fast. The base can then produce 7 nuts, (3 excess). But the 7 are worth less than the 5, as now the base is already size 2, and a colony pod should be produced. Indeed, the growth time to size 3 is longer, and that will only continue to get longer to size n.

So for nutrients, every additional nut is worth less, providing the base is producing sufficient nuts to not starve, and is not popbooming. If it is popbooming, then any nuts past (2*size+2) are utterly worthless.

Also consider than sizes 2, 5 and possibly 14 are important sizes. Size 2 allows a colony pod to be produced. The faster the better, infact whilst the base is size 1 (And considering an infinate sum of ec), nuts are the only thing of importance. The base must grow to size 2 for a new base to be made.

Size 5 allows for specialists. If a base only produces 10 nuts, then that may be enough, as specialists can be set, making the base massively more productive.

Size 14 is the cap to growth. Hab domes come so late as to be almost worthless, and without the PKs or the AV, no faction can get past size 14. Therefore, 28 nuts is the max, and any after that is worthless.

Minerals, however, are worth more in the middle game. Initially, the nutrient is king. However, as the game progresses, population takes a back seat to production. What use is 28 nuts when the base has no hab complex and is only size 7? So minerals have some value. However, they take their value from the humble ec.

Energy is worth most at the start of the game. Getting to techs first is key. An early FM can massively increase the energy production of a base. That would require 40 ec and IndEcon, which requires energy.

However, energy by itself is worthless. It must be converted into something, and the sooner the better. It can be converted into 3 main things (And also waste from slider inefficiency and distance from capital), and then into any number of others. The first is research. A no brainer. You must research, and the faster the better. Putting energy into research happens automatically. The second is psych. Only base size *2 psych can be used, and any more is worthless. However, odd numbered values of energy in psych is also wasteful (and usually unavoidable).

The third, and most important is e.c., and the sooner those ec are produced, the more they are worth. 10 is usually worthless. 20 however, will rush a former to completion (10 mins left, production 2). That former is almost priceless is produced early enough, beacuse of the compound effect of making more production. However, that same former produced on turn 100 is almost useless, as it has very few former turns left to contribute.

However, on the other hand, ec are worth far less than research points. Probably somewhere around 2 research points per ec, although maybe the ec is worth less. This leads to a quandry. Research is best when done sooner (Gaining the benefits of the tech sooner rather than later) but ec are also worth more sooner rather than later (To rush that former on turn 3 not turn 13.). However, both are worth less than the nutrient whilst the base is size 1.

So to sum up (And I really don't know why I'm writing this anyway!), nutrients are priceless when the base is size 1, as it must get to size 2 to make a CP. Obviously, they lose value when a CP is not required, but they are still vital.

Minerals are most important earlyish to produce things. They become less important as energy production increases, and have almost no value beyond a certain number (Whatever your best combat shell costs, usually 4-6 rows of mins).

As soon as your energy output can be increased, always do so. The extra ec can make all the difference in getting the former out a turn earlier, working a borehole a turn earlier, producing a 10x-1-12^2 earlier etc.

[Chaos Theory]

Originally posted by Chaunk
But, at 1% interest, 100 turns to 256819.3 ec after 100 turns.

100 * (1.01)^100 ~= 2705
To get your 256819.3 figure would require about 8.17% interest.

[Humphrey]

1% compound interest is what he means I think, I can't be bothered to work it out.

[Chaunk]

Actually, I entered the wrong formula, but it was late so I didn't spot it myself.

After recalculating today, I'd say probably ~10% interest. After 50 turns, 100ec is 11739.09, 60=30448.16, 70=78974.7 etc. Those figures seem roughly correct, I may exchange 100 ec on turn 1 for 12k on turn 50, or 30k on turn 60. And I feel I could make 100 ec worth 12k on turn 50, 80k by turn 70 etc.

Interestingly, 10% interest leads to a figure of 1378061.23ec by turn 100. Sounds about right. By turn 100 the game is more or less over, and it would take an astronomical sum, such as that to win it.

[Blake]

This is a rather interesting thread...

Realistically, the energy credits in SMAC are non-fiat, they are backed by real energy. Furthermore the state owns the credits.

Bear in mind what this means - the State could for example lend the credits to the private sector, but since the real energy behind the credits is then expended, the State can't just ask for the private sector to pay them back at any time, so to earn interest on credits, it would have to be "deposited" in such a way that it cannot be spent at any time. You would get the interest + repayments over a period of time. I suppose the state could also demand faster repayment, at great expense to the private sector, because they would have to go without energy in order to scrounge up the credits.

So I say, it's entirely unreasonable for energy credits just sitting in reserve to be earning interest at all. And to go all left-wing lunatic, it shouldn't be happening in real life either, and only does because the entire financial system is broken and deeply diseased. (I have to say I'm a big fan of the concept of commodity backed currencies)

Giving a "(un)reasonable" interest rate to stagnant credits would result in diseased gameplay, if it's not worth spending your credits this turn, it wont be worth it next turn either, resulting in perpetually waiting to spend your credits at the last moment (that will help you win). It's lame gameplay.
This is why in Civ3 it was capped at 1000g, to limit the lameness to 1000g.

So I'm not even going to entertain the idea of putting interest on stagnant energy credits.

But as for a real loan of the real energy (ie to another leader) who gives repayments; that can be done. The reasonable rate would depend on industry rating, actually.
Crawlers are the best horridly overpowered gold standard for SMAC interest rates.
A crawler costs 30... uh minerals? yeah that's the thing in SMAC. We'll use the exchange rate of 2 credits : 1 mineral, it's quite reasonable.
So crawlers cost 60*industry_rating credits, and give an income of 4 credits per turn (we'll say, which is reasonable for crawling 2 minerals or 4 energy).
Most players have an industry rating of 0.9 or 0.8 (lets say 0.85), so crawlers cost 51 credits, lets say 50, because it's a nice round number.
2 crawlers, 100 credits, return 8 credits per turn. So if the terms of the loan could be "We give you 100c now, you pay us 8c a turn forever".
Otherwise it's pretty much 8% per turn + repayments, which is sum/term.
Like a 100 credit investment over 50 turns, would be 10c/turn.
Someone else can work out the compounding stuff, if they want to.

I think that a 8-10% interest rate is reasonable, and should be what the AI leaders want for loans, unless going for mates-rates. A reasonable mates-rates would be 5% (ie we give you 100 credits, you pay us 5 credits a turn over 100 turns, yes that's a total repayment of 500 credits, it would help if they didn't mention the total in diplomacy, seeing it like that isn't conductive to fleecing).

That's my 2ec.

Oh, and the SMAC energy credit system isn't at all well designed so don't take what I say too seriously or technically. Like if the credits are non-fiat then the market shouldn't be able to crash, unless it's literally a crash when the energy storage gets overloaded and implodes. What I'm saying is the concepts are not consistent in SMAC and it is just "works" for gameplay.

[Blake]

*Whew* something else just popped into my head that is relevant.

The realistic interest rate on energy credits should be negative (the precise term for this is demurrage). EC's are non-fiat and backed by real energy, the real energy presumably costs something to maintain - it leaks, or some of it is used to power the storage units. We have to presume though it is real energy like electricity, rather than human energy (labor) or something (perhaps planet pearls can be used to convince other mindworms to do heavy lifting heh). But yeah, assuming it's energy you can electrocute people with, then it should decay by leakage or cost of maintenance.

As for the rate of decay, that's impossible to say. One thing for sure, it CANNOT be positive, because energy can't multiply like bunnies; that would violate some of those laws of thermodynamics thingies, which always trump the laws of economics (outside the minds of bad economists, anyway). So a reasonable rate could be defined as -100% <= rate < 0%.

Making the reasonable assumption that the energy storage is efficient and functional, the decay rate would be probably something like -1% to -10%, energy storage models that work are like pumping water into a reservoir then using it to power turbines, or sci-fi super-conducting power coils, it obviously costs some energy to get the energy in and out of there (those laws of thermodynamics thingies), but it might be easily stored without decay (ie gravity-based systems like the water reservoir, assuming the reservoir is sealed against evaporation).

For gameplay, a reasonable rate would be -2%, it wouldn't particularly impair or alter gameplay other than discouraging saving up huge sums for plonking wonders, most players are already eager to spend their ec's ASAP.

One of the curious things about the SMAC economy model, is that in the SMACiverse energy must be both scarce and easily stored in order to make a usable currency. This might actually make sense on a world without fossil fuels, poor solar power capacity and plenty of high-energy experiments to be done, along with advances in energy technology to store the stuff.

[Humphrey]

I find I do save up sometimes, but only when I have a big army upgrade coming up (just about to research a new reactor, or new weapon), and that's only for convenience sake, so I can upgrade everything all at once. But otherwise I just spend credits whenever I notice I have them.

[Straybow]

The vocabulary is an artifact of BR wanting to get away from "money" and do something "futuristic" instead.

The idea is that shiny yellow metal doesn't have any special value to struggling colonists on the new planet. Which is bunk. Gold is pretty, and as long as people are people gold will have extraordinary value.

Money exists because it is useful. Any economy above subsistance level uses "money of accounts" even if they mint no coins or bills.

[Chaos Theory]

Originally posted by Straybow
The vocabulary is an artifact of BR wanting to get away from "money" and do something "futuristic" instead.

The idea is that shiny yellow metal doesn't have any special value to struggling colonists on the new planet. Which is bunk. Gold is pretty, and as long as people are people gold will have extraordinary value.

I'd interpret it as a result of not having much gold. The Unity wouldn't have brought much if any, and digging up shiny yellow metal just doesn't outrank producing food as far as priorities go. That which is mined would be useful for its chemical properties, but not enough would be available for it to form a currency (though of course it would carry a value).

[Leon Trotsky]

To put it bluntly, in the early years in Chiron colonists would be more interested in getting freshwater than gold. If the need of a currency arose (which would not happen until there is an actual market) I find hydrogen cells more appealing. It is even the name of the label for the unity resupply pod goody!

[Straybow]

I agree that mining gold (Ag, Pt, etc) wouldn't be a priority. For the Unity survivors almost any piece of existing equipment becomes far more valuable than shiny metal.

If you only have one Unity Rover there are many needs that can be met by its use. It can only be put to one use at a time. That creates a "market" for rover use. But one wouldn't try to make a currency based on "rover-hours." Energy is likewise too intangible and consumable to make a good money of accounts.

"Energy" isn't really fungible. A water wheel or windmill can turn machinery but can't heat or cook food, while an open flame doesn't power machinery very well. You end up having to assign a value to each variable "energy credit" by some arbitrary standard, at which point you can call it a Dollar or a Mark or a Yuan.

[Hydro]

Just saw this thread and I immediately thought, “Yikes! This is what the developers of Moo3 did!” What do I mean? Needless complexity that is added because it is a ‘good idea’, even through the idea adds very little to the game or functionality to game play.

The economic system in SMAC is pretty basic (and an artifact of 1998/9), and trying to fix it will only make the limited AI even more hobbled. Moreover, any tweak will lend itself to abuse by rules lawyers out there (Anyone smirking? Cringing? I thought so…). I see very little being added to game play, or that it adds anything that the existing factions/characteristics/ideologies don’t already simulate.

My advice is that if you want ECs-with-interest then play Morgan, or arrange to have a huge eco rating. The eco rating stands within this simulation for managing your economy well and getting the most return for your investment. Yes it is abstracted, but that is fine with me.

In the end, if I want an interesting but needlessly complex game I’ll play Moo3. Otherwise I’ll go with SMAC any time.

Hydro