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

So, while posting on another thread, my thoughts turned to what many of us have seen before: The risk that inflationary Bubbles and Ponzi schemes in virtual economies will degrade the overall game experience.

Yanis Varoufakis' work on Game Theory for Valve was awesome and may be the great hope for the Greek economy. But we, as a community, have seen more of the ups and downs of virtual economies than any one person. Perhaps we can feed some of this experience to Portalarium. Interestingly, the pen & pencil community has put an amazing amount of thought into the same challenge.

So, since this is a crowd-sourced game, what ideas do we have? What works? What doesn't? What controls should be in place? When does Laissez-faire succeed and fail for gamers?

 

For those that didn't bother to click all the links, here's a repost from the Law & Economics blog for the Adventurer Conquer King System (ACKS):

 

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

I'll let you know when we figure out how to prevent them in real life first.

 

you do realize that this game is not going to attract the con men right? there is no way this game is going to be large enough to get that kind of attention, so your talking in pure hypotheticals

 

Have you no faith in the scam artists of the world Dasilva?

 

If SotA weren't so proudly displaying the money it's raised to date, I'd be inclined to agree with you. But there were Bitcoin cons back when they were worth next to nothing. There's some real investment going on in SotA. Investment attracts cons like flies.

But I'd like to return to original question: What can we as a community do to anticipate and avoid such behavior?

 

yes but that money that has been raised does not mean that money will be to made in this game. with the current setup and design I highly expect this game to be more than a niche. and niches dont usually attract vermin

 

Idea: NPCs should have homes and lives, right? Right now if you make chairs, only players will buy them. What if NPCs went to NPC (maybe even player vendors) to actually buy chairs to replace old chairs?

 

Well since you expect this to be more than a niche, it looks like we'll be seeing our fair share of vermin.

 

...and beds, armor, food, reagents, ships, even houses. WOW! Heradite, that's a GREAT idea! Not only does it instantly create Demand in the economy, it empowers Portalarium to tweak demand in certain directions.

[brainstorm]​

How to code it? I guess this is an extension of the fetch quests that some vendors give now. but more public.​

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Um, I guess that NPC AIs could be modded to issue a shout in /local for what ever commodity they desired. Then, they could have a vendor window available to players that offers Full Market Value for said commodity. Similar to the Alchemist offering FMV for crystals and the Tailor offering FMV for leather...​

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If you wanted to go nuts, they could even offer slightly above FMV. Say +10-20%. You could even set a Demand variable behind the scenes... Now you've created a reason for players to haul goods from town to town.​

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This could also make an awesome Newbie quest.​

[/brainstorm]​

I love it, Heradite. Keep it coming.

 

Take it a step further and having NPCs use the vendors that players get to help mitigate some of the bad lot location fear.

 

How do you stop Ponzi schemes from occurring inside a Ponzi scheme? That's a provocative question.

 

You're right. That could be a BIG warm-fuzzy for PC houses that are currently confined in ghettos non-NPC districts. To achieve that, the NPC Buyers would need to wander. More complicated. Doable.

[brainstorm]​

How to code a Wandering NPC Buyer:​

Take and apply the Villager/Guard wander algorithm to the Buyer. Set it's Start Point somewhere (their house?) and set the boundaries of the wander to a PC district. The Buyer is given a random Desired Item value.​

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When the Buyer gets within Shout distance of a Vendor, they shout their Desired Item in /local. A script is also triggers that compares the Desired Item value to the vendor's inventory. If True, then exchange. The script could even support Call-and-Response dialogue. Players could step in to meet the Buyer's demand, although this could get buggy if the Player and Vendor exchanges overlapped, or if multiple vendors respond.​

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Once the Desired Item value is met, the Buyer either obtains a new Desired Item or returns to their Start Point. If it's not met, say within daylight hours, they either wander to the NPC market or return home.​

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A stretch goal could be for the Buyers to have Desired Price. This could compare to the vendor's price. That would give the Dev Team even more granular control over the local economy.​

[/brainstorm]​

I'm a tad concerned about the backend required to achieve this. The nice thing about your idea, Moiseyev, is that it could be prototyped now in the NPC markets (if you don't let the Players interrupt). Adding just one Buyer to the NPC markets would create good atmosphere.

Another concern is that it may make /local rather "noisy". Especially if there are lots of Buyers (RG willing). And noisy local chat is already a challenge. But I guess it'd be no more noisy than a real market. And imagine how immersive it'd feel.

 

Isn't it though?

 

Eve Online attracts them for 5 reasons:

* Free to play means an easy barrier to entry for multiple accounts
* Using isk to pay for your subscription means you can multibox with tons of accounts at once for free
* Because people can lose isk and the equivalent of real money in a scam, people get REALLY upset, which scammers enjoy
* You can resell isk for real money profit
* Anyone can be attacked anywhere at anytime. It is a full loot, non-consent PvP model. Starter areas are supposed to be safe because they're protected by NPC security, but especially as of late, people have discovered it is not only safe to grief in these areas, but it is profitable.

SotA doesn't have that type of model, so we shouldn't attract a community of griefers and scammers.

 

Good. That said, we still need to be wary. Remember: Just because your paranoid doesn't mean that they're not out to get you.

Scammers aside, what else can we do to develop and support a sustainable (and fun) economic model?

 

I think a key thing they are overlooking right now is how crucial it is in base values of items.

When they have the full map and most of the scenes out, we need to assess how rare various resource nodes are, and the base value of unrefined items, refined items and crafted items.

If there is tons of profit in item X, no one will pursue other crafting skills or make other items.

Thankfully SotA will hopefully auto-correct this a bit in that if merchants already bought tons of item X, they're willing to pay less for more of that item, and they'll pay more for items they don't have in their inventory yet. It encourages economic diversity. The regional economy factors will be important as well.

That being said, they still really need to take a fine-toothed comb to base values during the beta-phase.

 

One of my concerns is if there is a hard code cap to the market (both high and low)... If price to buy gets low enough that buying all the stock and then selling back to same vendor to flip it for profit becomes a thing it will break the economy big time. But having a minimum buy/sell cap means there is an assured profit margin that some items will probably always be better to craft than others.

"Selling" or "Banking" stuff for NPC mobs is all fine and dandy, but unless they are also buying things, especially from player vendors, it won't actually affect the market beyond just removing supplies and gear temporarily from the game.

 

Aren't there more important things to worry about, like for instance inflation? I think is the important to control the value of gold, so as to make sure that it inflates at a reasonable rate. Ponzi schemes and bubbles don't pose a great a threat as uncontrollable inflation. I doubt Ponzi schemes would be a common occurrence, and if the demand for one item far outweighs the supply, would it not make sense for that item to cost more than it is actually worth?

 

Taxes and Tariffs...As you enter into the front gates of a town the guards check you for resources. You must pay a tax to enter the town with said goods. To set up a stall/vendor in town you pay a small fee and 30% of your profit to the town.