The Value of Money

[Chaos Theory]

Interest normally implies you can pull the principal out at some point. My point is that you can only retrieve a fraction of your principal (40 ECs) from an Energy Bank, so you don't actually gain anything until you've paid off that difference. Also, I suppose the cost of an EB should be 16 ECs times (10-industry), since those first 10 minerals have value as well.

[binTravkin]

Also, I suppose the cost of an EB should be 16 ECs times (10-industry), since those first 10 minerals have value as well

I can't see a way how this makes sense.
If you take 1600ECs as a cost of your EB and balance out the interest rate so that players will need to think twice befire doing any of the options (rush and deposit), most players will definitely deposit.

The cost for a facility for 0 INDUSTRY faction is
(r-1) * 10 * 2

Where "r" is row count for the project.

[Chaos Theory]

Huh?

The mineral cost of any facility is its mineralrows * (10-Industry). For an Energy Bank, mineralrows = 8, so a 0 Industry faction pays 80 minerals. Using the conversion that 1 mineral = 2 energy, an Energy Bank costs 160 ECs, or mineralrows * (10-Industry) * 2.

[Flubber]

Guys

I think thats why bintravkin was using rows minus 1 to calculate rush cost-- I believe he was assuming a 10 mineral carryover ( which is very legitimate for most players) and he stated his 0 Industry assumption

[Chaos Theory]

The 10 minerals carried over, however, have a value of about 20 ECs. If you use them towards an Energy Bank, you've spent those 20 ECs on it.

[Straybow]

Originally posted by Flubber
Bull. Tell you what. lets play a MP game and you lend me 20 ec a turn each and every turn for the first 50 years. I will pay you back 20 ec a turn for the next 50 turns. Deal ?

Sorry, irrelevant. That is a zero-sum exchange, one by definition profits and the other does not. See below. 20ec is hefty compared to the income at the beginning of the game when worms are typically worth only 10 and your bases produce only 1 or 2 each.

But let's look at a counter offer. Play until both economies produce at least 100ec/turn. Then I lend you 1ec/turn for 50 turns, after which you repay 1 ec/turn for 50 turns. Do you think that will have any impact beyond simply adding 1ec to your bottom line?

Money has time value even in the absence of inflation. Its because you can do things with it now that can add productive value to your economy

No, capital has time value and money can buy capital. Banks pay interest because they lend the money at interest to increase the borrowers' capital.

A recycling center rushed on the first turn costs the same as a recycling center rushed on the 100th turn. By definition, no inflation and no intrinsic time value.

If I loan you 20, I decide what return is worth my time. Not some economically derived time value. If I have already rushed everything to the max and have 20ec left over and you're my ally I'll lend it to you, maybe even for a flat repayment. If you're my competitor, call me Sharky.

[Chaos Theory]

Originally posted by Straybow

Money has time value even in the absence of inflation. Its because you can do things with it now that can add productive value to your economy

No, capital has time value and money can buy capital. Banks pay interest because they lend the money at interest to increase the borrowers' capital.

A recycling center rushed on the first turn costs the same as a recycling center rushed on the 100th turn. By definition, no inflation and no intrinsic time value.

Which one's worth more? The one on the first turn, of course. They both cost the same price in terms of ECs, so the ECs are worth more on the first turn than on the 100th. Therefore, if you hold onto ECs, they become less valuable: the essence of inflation.

If I loan you 20, I decide what return is worth my time. Not some economically derived time value. If I have already rushed everything to the max and have 20ec left over and you're my ally I'll lend it to you, maybe even for a flat repayment. If you're my competitor, call me Sharky.

If you loan me 20, *we* decide what return is worthwhile. Charge too much and I walk, even if I want the 20. The value of money on the real-world market is a result of consensus. Loans in SMAC are unfortunately hard to negotiate and enforce, so its value isn't very well established by this method.

I'm not conducting this poll so I can demand a 5% loan from you, since the value of money to you varies according to your circumstances. I'm polling so I can get a rough idea of what sort of returns people expect from their ECs.

[Commy]

I think 5% might prevent people from rushing a facility or unit as early as they might...people might wait for the first 10 minerals to accumulate, then hurry, that way the spend less, and get more interest...although I would hope at least some players would get the first 10 minerals anyway...

[binTravkin]

I think 5% is too much and many players just vote that because that was seen in Civ3.

Please not all forget Civ3 one shield equalled 4 money, not 1:2.

EDIT: 3% would be just ok as 5 / 2 = 2.5%
As its be harder to evaluate with decimal (for a human, not CPU), it's better to be rounded up to 3% as 2% is too little.

[Chaos Theory]

Percents, already representing decimals, do *not* need to be rounded to whole numbers /rant

What's this about interest in Civ3?

[binTravkin]

Civ3 had 5% interest for base up to 1000money after Wall Street is built.

[Flubber]

Originally posted by Chaos Theory
The 10 minerals carried over, however, have a value of about 20 ECs. If you use them towards an Energy Bank, you've spent those 20 ECs on it.

Well, yes and no. In higher mineral producing bases, you must produce something or stockpile energy. So the "cost" of producing something with that mineral production could be portrayed as the energy you gave up by failing to stockpile.

Also, if we are talking the cost to purchase those minerals, we cannot forget that the first 10 minerals cost more but of course you are assuming that you overpay on a rush by just enough to have the 10 mineral carryover.

[Flubber]

Originally posted by Straybow
[Q] [SIZE=1]
But let's look at a counter offer. Play until both economies produce at least 100ec/turn. Then I lend you 1ec/turn for 50 turns, after which you repay 1 ec/turn for 50 turns. Do you think that will have any impact beyond simply adding 1ec to your bottom line?

1 ec a turn is trivial even pretty much at turn 1. If you truly believe there is no time value to money, you would make the amounts significant. In your 100 ec economy, lets make it 50 a turn. So you lend me 50 a turn for 50 years and then I will return 50 a turn. All other things being equal, the guy with the money earlier wins.

. . and yes its not about the having of the money, it is due to what the money can buy... SO ??

[Chaos Theory]

Originally posted by Flubber


Well, yes and no. In higher mineral producing bases, you must produce something or stockpile energy. So the "cost" of producing something with that mineral production could be portrayed as the energy you gave up by failing to stockpile.

Also, if we are talking the cost to purchase those minerals, we cannot forget that the first 10 minerals cost more but of course you are assuming that you overpay on a rush by just enough to have the 10 mineral carryover.

If your mineral production is large, then your minerals are worth less relative to energy. The cost of an Energy Bank would then be the lost opportunity to build something else. However, in this case, you aren't spending ECs, so interest is not directly relevant.

[Flubber]

Originally posted by Chaos Theory


If your mineral production is large, then your minerals are worth less relative to energy. The cost of an Energy Bank would then be the lost opportunity to build something else. However, in this case, you aren't spending ECs, so interest is not directly relevant.

I agee-- I just don't see the cost of using the minerals in the build as being the 2 ec that it would cost to buy such minerals.

On the interest issue, I think it would would take significant interest to make holding cash worthwhile to me, although the answer is it depends. I have turns where I have nothing really great to rush and very little interest would be a great enticement. Other turns , those rec tanks or CPs are very tempting and even higher rates of inteest wouldn't sway my decision

It might be interesting to play a scenario with interest enabled to play with the impacts