Econ Students: How do we prevent Bubbles & Ponzi's in a VR economy?

hopefully we will be able to sell from our own properties ala UO, and those who can afford the tax free merchant (not me) will be able to sell and avoid the city taxations, whereas those like me will probably be taxed into oblivion especially if we join a POT

 

I'd say tariffs could be an interesting mechanic for non-residents (if something like that were implemented). Residents should have none as the purpose of tariffs is to protect local markets (i.e. citizens). And then both residents and non-residents would be affected by taxes at the vendor level... If you don't have enough to cover the goods you bring into town, you are thrown into prison and rot for the remainder of the time you play the game. Doubly so as you keep getting charged by every city for the same thing repeatedly regardless of your intention to sell stuff.

It would be interesting if there was a way to implement them beyond just at the vendor level, but I don't see a way of doing that successfully (though if you set it up to create a smugglers network to avoid taxes and tariffs that would be fun).

 

Like the idea! The only thing I'd like to add is that you should allow players a way to get out of trouble peacefully (e.g. - kick them out of town, or "repossess" some of their goods). Getting thrown into prison might introduce an interesting new 'adventure' for players (who doesn't like a good prison-break scenario? ), but it will severely irritate others. If they're online just to do some shopping, only to be railroaded into content they may not have time/interest for, it will discourage some from engaging in the marketing altogether (which is bad for a player-based economy! ).

EDIT - Potentially, if you can't pay up front you could get "tariff charges" that would scale -possibly with interest- until it got so high that you had to choose: pay up, or incur the wrath of the town guards (similar to the Bounty system used in the Elder Scrolls series).

 

The answer I came up with when working out the details of my own game went something like this...

Each Town/City/Kingdom/Etc was given a set amount of money when the game opened. Could be equal amounts for each place, vary on the location's size/importance, etc. Doesn't really matter so long as, in total, the amount of money that the developers want to exist in the world is out there.

All the NPC's in a town get a fraction of their town's treasury to do business with at the start. When they buy things from players their total money goes down, when they sell things to players their total money goes up. When they run out of money they can't buy more things from a player until they earn more through sales. This could effect buy/sell prices slightly as they might pay a little more when their pockets are full, or a little less when their funds are low. They also pay a little more for things they have little or none of (that are on the list of items they actually deal with), and pay less or not buy at all things they have too much of (Which would prevent people being able to, say, farm the gem mines and then sell 100 gems to 1 vendor each for 1,000 gold or whatever the price is, or sell 50 kobold warhammers or whatever the case may be.. As the merchant's stock filled up with the same item they'd slowly start paying less for each additional one).

This may, at times, lead to the vendor you're at not buying what you're selling, or not paying as much as you wanted at the time, but that's just incentive to shop around. It might also occasionally lead to a vendor paying you better than you expected for something they're running low on... Again, incentive to shop around. It can also increase traffic flow to Player Owned Towns, people may have been selling things to Owl's Head merchants all day, but I bet if you run over to Stinky Pete's Swamp Kingdom the vendors there still have some money handy.

Overall this prevents vendors from creating gold out of thin air whenever a player sells them something. Thusly shutting down one of the main causes of inflation.

In my game, each City/Kingdom/etc also used their treasury for other things. Such as a vendor who had a buy/sell list customizable by the "ruler(s)" of that location. Say they wanted to deck out their town guard in full platemail, they could go to their treasury guy and edit his buy list to pay X amount per Iron Ore. Now players with resources who want to make a bit of quick cash can sell Iron to that town, up until said town treasury vendor runs out of however much money the player leaders gave it to spend on iron. So random players made some money, and the player leaders of that town can now throw a pile of iron at a PC Blacksmith and get platemail made for their guards. Vendor can be set to deal in any type of base resource, say you're a warrior and you've just been out stabbing bunnies and collecting random resources for the past few hours. You ended up with a big pile of reagents which you have no use for, but you know there's a PoT full of mages off to the east that is always buying any reagents that come their way, etc. Could also work the other way if a town's treasury has accumulated just way too many oak logs, they could slap that on the vendor to clear out some storage space and get a little gold flowing into their treasury from player crafters who really needed some more wood to make bows or whatnot.

That may or may not be of any use in this game, though I think NPC and Player towns having the ability to possess a Treasury that deals only in money and base resources could be a good feature. Especially for PvP towns. Especially if a successful Player Seige of a PVP town can result in the victors winning a small percentage of what's in the treasury. The PvP Town could even have control of what the range is for the percentage.. Don't want to get too hard? Set it to 5%-15% of the treasury goes to successful attackers. Want a BIG challenge? Let everyone know if they can take you down they can get 40%-50% of your town treasury. Could even make li'l events out of it, posts on the forum saying "On Saturday Night from 5:00pm-11:00pm any successful attacking force can claim 40%-50% of the town's treasury"... You get the idea.

The main difference between PC and NPC town treasuries is that the PoT Treasuries would not be linked to the town's NPC Vendors (aside from their treasury vendor), those would still be related to the overall npc economy. NPC Towns would probably not have the 'Treasury Vendors'(or whatever might be a better name, I forget exactly what we called them) that buy resources. Also Player owned treasuries would need to be started by the funds of the players who run the town, unlike the npc treasuries that the dev's control. If players manage their town treasury well, it would grow over time, if they didn't the town's funds would dry up. Same as a real treasury.

Also, the way I had it set up, the vast majority of monsters did not drop money, since generally it made no sense for them to have money. Though they did drop resources of various kinds, which can be sold or crafted into something to sell to make money. The types of enemies that did drop money, dropped a sensible amount of it. This could also be tied in to the NPC vendor "Treasury". Say the NPC funds have plenty of cash, it means there's plenty of cash floating around the world. This increases the odds that bandits, for example, would also be robbing more money, or having more chances to rob money, so they have more on them. Same for other monster types that may get gold in other ways. Again, if the "NPC Treasury" is doing well, odds are those adventurers that dragon or liche killed earlier probably had plenty of spare change on them when the monster killed them and took the shinies.. If the "NPC Treasury" is low, the bandits are probably down on their luck too, so they haven't been finding much to steal... And that adventurer the liche sucked the soul out of was probably broke and was just hoping he could go get a liche tooth to sell to the weird mage back in town so he could make enough to get his codpiece repaired.

If the Devs think the flow of gold is slowing down more than they want it to, they can artificially pump up the Treasury that controls the funds of the various npc's. Likewise if there's too much gold floating around, they can cut artificially deflate it for a while.

This way NPC Merchants do nothing more than keep existing money flowing, which the devs can tinker with as they want. And gold-dropping monsters essentially drop enough to keep in balance with the various gold sinks that remove money from the system entirely. Not enough money floating in the game? keep the gold sinks the same, up the gold drops til it evens out. Too much money floating around? again, keep the gold sinks in the sweet spot and turn down the gold drops.

This probably makes no sense since its 2:30 in the morning and I'm rambling. Can clarify after sleepytimes if anyone thinks there was anything here worth clarifying!

 

You generally control inflation in MMOs with gold sinks. New gold keeps entering the economy auto-magically every time you complete a quest and an NPC magically hands you gold that came from no where, or a resource node gave you a crafting mat generated of thin air that you can turn into a profit.

So you need sinks that pull gold out of the game as well. Repair kits, taxes on houses and lots, etc. are gold sinks.

 

Guards shaking me down for taxes every time I enter a town??!

I pay enough toll booths in real life, I don't need them in my games, too.

 

Bribe the guards than.

 

It would seem my jail the player for the rest of the game was taken a bit more seriously than I intended... but I love the enthusiastic alternative... Goes right along with bribing the guards. Long live the black market and smugglers!!!!

 

There's a lot of focus on how NPC goods and services should be more expensive than player goods and services so players can make a lot of money. But there's a lot to be said about how NPC prices could help "correct" the game economy, because it'll force players to compete with NPCs. That's good.

Second, I think most problems with economies in games come about because there are almost no realistic requirements on players. They don't have to eat, or sleep, or repair their gear, it takes them an instant to harvest and craft -- with a click of the button -- combat is easy grinding, and enemies have steady loot on them -- so they can be "farmed" like they're some product. Making money is easy. So its all of the conveniences that players want is what ends up wrecking the economy.

I wouldn't ask that the game be hardcore in any way that makes it terrible to play, but it should at least start dialing back the over-convenience of players. I hope that food is meaningful, so people will feel they need to eat it rather than forgetting about it. Even though they need to be tweaked a bit, I hope repair or replacement of gear remains a requirement. I hope that killing random mobs in the wilderness doesn't predictably make you wealth. I hope reasonable encumbrance limits stay in.

That will benefit the game in more way than one.

 

Also just posted this in the R14 feedback forum,

 

If you follow archeage then i would say those bubbless are aleady forming, i would support the lazze faire(sp). but the question is moderation, when is it too much and little. i would be inclinded to agree with ghost. i clicked all the links, i didnt know that valve employed the greek finance minister, i hope they pull them out of their woes.

I would support steam over initial control mechanism(barrier of entry) over Trions' glyph as just by playing their game i can see how its getting out of hand with land ownership, and nobody likes ghettoes.

with the intro of banks ive noticed when i kill npcs there are some unsellable weapons that was creating great wealth. i also noticed i could place a house without having to pay 20k, THANK YOU !!!!!!

I am worried that multiple untracked accounts could become a problem. the primary question i see is, how intrusive are you willing to be? do you care if you get caught? but getting caught isnt bad per se, it could be good if they keep coming back with unbridled passion about said game, which would be. this "enviornment"

the spell check needs to be better catching lazy people.

In my recent thread about AI bots i mentioned some pricing schemes that might work out as inital price points into introducing strictly controlled macros into the game. which as we all know would be a hacker con mans delight because they are the most easily exploitable. if there were less than 99% chance it could be compromised i would not introduce it as compromising freedom is a touchy subject.

In this tightly controlled enviornment that is being tracked constantly one must always assume you are being watched because my assumptions tell me i always am

I have had some great ingame experiences so far doing quests in Adoris. i totally Adore-it there was some funky stuff going on with question NPCS that shook my reality, and beleifs of what was possible. I would like to say i know whats going on, but Bless Lord British that is one smart genius. and for my randomnes and wacky previous posts, i do apologize. if i seem to be talking in code or riddles its because i've watched too many steve jobs interviews.

 

i concur, with this caveat. what if the players make a run on the market like a venture capitalst? they create huge bubbles, one has to look at the history of the semi conductor to fully understand this.

as much as i despise encumbrance, i would say it must stay in as well. the true test of ones desire is not getting knocked down, but getting back up, which the mods here have graciously let me do.

the zone command will have to go eventually as i see it now or encumberance is pointless.

the NPCs need to be the control mechanism setters of the economy. but for me it was sad to not see what others were selling.. auction house mechanism, also very complex, and compelling.. I would say that greek economist is a good brain to pick, with so much riding on it for his country i hope he prevails. Gold sellers are the bane of any MMO and auction houses in archeage are a prime example.

 

The first thing I thought of was land barons. The only thing I don't like about the title system is that it is bestowed upon non deserving PPl irl.

In this game I would say I do not agree with giving ingame rewards only to those who have money I do like the onbe system as it has profound effects on people with less money but more devotion to sota

 

Just a note here - bubbles are OK on luxury items. In fact having such bubbles on luxury items are beneficial to the game since it lets/gets the affluent to spend money not on basic items driving inflation.

I've preached this mantra in several topics now.

Say you have a base item like Healing Potion. If parts of your combat and economy relies on players purchasing and consuming Healing Potions then you do not want a bubble there. What you do then is create tiers for luxury.
In this case, for instance, have three recipes for Healing Potions each with a seperate container making an effect on encumbrance. Say
Canteen (made from wood) + potion ingredients = "healing potion-can" @ 0.8 enc
Waterskin (made from leather) + potion ingredients = "healing potion-skin" @ 0.4 enc
Flask (made from glass) + potion ingredients = "healing potion-flask" @ 0.2 enc
Any of these three when used have the exact same effect.
When you start out and have don't have much money you buy the base item, when you progress you will start buying the nicer item and finally when you have more than enough money you buy the luxury item.
Then you set up so that NPC vendors sell almost only the base item, close to the margin. While the luxury items are made and sold only by players.
Then you have set the system up so that it is OK to manipulate the price for the base item (healing potion-can) by producing more at the NPC vendors if price goes up. Since you do not ruin the player market.
You have also set the system up so that it is OK for bubbles to occur to the luxury items since such bubbles does not affect the lower tiers or starting characters but rather only those who can afford to lose money in bubbles.
The only thing to happen is that if it gets really really expensive is that more players will start buying one level lower.


If you do not make such tiers for basic items, like Healing Potions, then the affluent will drive up price since the difference to them is miniscule so they don't care if it doubles in price, while the difference to starting players is huge.

This x100.

If you stop the sillyness that is monsters dropping coin every time, then you can control the economy through the sales and trades of goods. It will also create incentive for people to cooperate or recuperate etc.

 

"Have you ever met a rich economist?" I'll never forget that quote, however misplaced it was at the time..

Sry off topic. Could not help myself.

 

but how do you prevent luxury items from becoming common place so that not everyone ends up being a high roller per se. In america im being told that the wealthiest 400 people make up more than 50%... with everyone else being middle class or lower, a widening gap prevents the wealth creators from being able to help the wealth needers without relying on random acts of kindness, those 400 people are so insulated and ppl like bill gates are philanthropic but you cant rely on everone to do that, i give that poor beggar in britannia a gold peice everytime i see him... but to a rich person even a million dollars is nothing when to a regular person it would be a lifetimes wage.the disparity needs to be kept in check. how would we do that?

if i could set an example with the pledge system i already see that insulation gap forming.

in UO i met a guy named sargeras and i was a complete noob, he took the time to tell me how to setup my character, what and where to kill, gave me some basic gear. and we would have been friends for life if i could find him alas i could not. rewarding peoples time spent is always a good idea, but you cant force people to give anything. its about finding the right incentive to motivate them to want to help others.

the monsters dropping coin thing i agree with but then how would you reward a player besides XP? if you have them dropping gold there will always be farmers and that creates market instability.

in this world of britannia, of which i am so lucky to inhabit i would equate the farmers with the richest 1%, those 400 lucky souls. because essentially they are money making machines, but not money giving machines. at least, none that i've met. which is zero.

 

the constant taxation is what made me quit archeage, sometimes i didnt wanna log in once a week and pay taxes. so i gave up my land and unsubbed. i just stopped caring because prices on the auction house for apex and other goods start out at like 20g say, well when i left a few weeks ago they were up to 70g on the AH, because of farmers and botters etc etc, so essentially the inflated prices ran me right out of that game. and it is really well put together, but the horrible community ruined it by exploiting.

 

taxes and goldsinks, meh.

gold sinks, deco, this is the summation of our discoveries into economies? pretty good so far if there's anything high $ or you have to wait/grind for it, there's a chance a mmo'er will bot/exploit that out. heck, i ran a uo miner script because i dont want carpal tunel syndrome.

i'm sure this game has an auto-alogrythym finding out when someone is botting, or just boom has an incredible increase in gold in an hour, and shutting that player down/flag/monitor and then insta-nerfing what he was mining, so that kinda economy-ruining activity wont be a problem for long.

scams can really be best combatted by having advanced knowledge that scams are awaiting. it's hard to resist a sales pitch. wouldn't hurt to have a 3 day right to refusal like some business sales. How long is a scammer going to keep going when people, after they discover the scam, just cancel it? not long. I'm sure they have a program to cancel out player transactions after the fact in place already.

i think they should just have game modes. one mode is realistic, and the other is casual. casual = no need for $ cuz it is about experience. and realistic for the people who want step one to be doubleclick a toilet seat to digitally set up the pet goldfish-recycling quest.

The Hendoman

 

Wow. A lot of good thoughts today. Please continue.

Quick story:

• I used to play WoW on the Durotan server. For a while (about 2 months) I effectively cornered the Horde market on leather in the Auction Hall. Made a killing.
  
  Once I got bored, I ended up showing a couple of guys that I'd made friends with how to apply the technique, so that they could fund their Guild. Flash-forward 6 months (I got busy IRL) and I logged back in to find that the Guild (which I also helped them co-found) was now one of the largest and best funded on the server. They made me a permanent member and "Elder", since I didn't really have the time or attention span for End-Game content.
  
  Moral of the Story: Cornering markets (and other naughty behavior) in Virtual Economies works, just like it does IRL. The question is how one applies the benefits reaped from such an effort. Or, as a mentor of mine said, "It's 10% what happens and 90% what you do with it."

 

i just dont see the point in a $ grind. it's too real life. and i know, we're trying to emulate reality in a digital world, but there's a point there wont be enough real life time to fit it all in. I remember stockpiling leathers on a freeshard and selling it for what i considered big bucks, and other vets giggled cuz they were already operating at a much higher pay level. I'm already hearing 'loot cave' and 'pk vs. grief'

and now i remember how i have played, since Chesapeak shard 30bucks a month to war thunder, basically futching around until someone hooks me up with either an idoc or they quit or just a goodwill boost. We sort of depend on veteran players and goodwill or vendors or something....so, give veterans big fat paychecks to spread around but dont tell everyone, so the economy isn't inflated?

The Hendoman