Here is a picture of a basic growth pattern. It can be seen in the population graphs of both GalCiv2 and MOO2-3.

A reduction in the players' initial wealth moves the starting gate left, but the player still travels along the line. A reduction to the player's contribution per turn causes a player to make slower progress, but still on the same curve.

If we define a competetive advantage as the difference between one player's assets and anothers', then there are two steep curves, and the tiny-est difference between them turns into a giant gap some time later.

I don't think the problem is necessarily the treatment of money. While they don't totally put the money back into the economy they don't totally take it out to begin with.

If I was to start building an economic system for a 4X game I would start with Hearts of Iron II.

I also think that there should be a race in a 4X game but it should plataue instead of continue to increase. This can be seen as an industrialization period where there is an initial race to industrialize and then a leveling off period.

Another very interesting game imo was the railroad tycoon games. Now you don't have railroads in space but you can have other infrastructure considerations like jump gates or space elevators or something. Also trading lanes may not need rail but they may need to be defended from pirates and there can be a diplomatic process involved in order to establish the trade route.

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Original post by RobAU78 @Edtharan It seems to me that you're talking about a fundamentally different type of (4X) game than what's out there already. In every 4X game that I know of, the player basically acts as the entire species/civilization. What you're talking about, on the other hand, is the player being just one actor in a larger system. There's nothing wrong with that conceptually, but I'm not sure how well it goes in with the traditional 4X-game concept.

In any game, the player is an actor in a larger community (the other players and AIs), so in this respect the two are identical.

And yes it is different to current games, because current games don't use a proper economic system (although I am sure there are some).

You can use this with the player acting as an entire race/species/faction, and the principals still apply, mainly because in such a game the player has to interact with the other races/species/factions. In current games this is not typically productive because of the poor economic system they ahve. Because Money is essentially infinite in its source, the only reason for trade is to dump stuff you don't need for money.

As you said, the player is supposed to be the one in charge of their race/species/faction, but because of the way the current games' economic system works there has to be a higher authority under which all races/species/factions are under and this higher authority controls the value of money in such a way as to keep it at an absolute value (which is completely unnatural).

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Original post by AngleWyrm Here is a picture of a basic growth pattern. It can be seen in the population graphs of both GalCiv2 and MOO2-3. A reduction in the players' initial wealth moves the starting gate left, but the player still travels along the line. A reduction to the player's contribution per turn causes a player to make slower progress, but still on the same curve. If we define a competetive advantage as the difference between one player's assets and anothers', then there are two steep curves, and the tiny-est difference between them turns into a giant gap some time later.

This exponential growth is the result of a Positive Feedback Loop. What I am saying is that you don't only have to ahve positive feedback loops, but you can have negative feedback loops.

For instance, lets just say that you have this population growth and each gives you 1% of their income in tax each year (or whatever time you like) and that money is handled like it currently is in 4X games (source/sink model with static value). The population act as a source which grows exponentially and so you end up with an exponential rate of tax income.

Now, lets use my model where the economic system where the player can create/destroy money but the more money in the system means that each unit of money is worth less (the negative feedback in the system).

Now you can still get exponential amounts of money, but the value of that money goes down the more that is there. What it means is that the player can have a lot of money stored, but the total value of the money is now worth the same as the total amount when the player had a smaller population.

The player would have to do something else other than just increase the population or increase the total amount of money that their race has (ie: conquer other races, have a mutually beneficial trade deal, etc).

Lets use a simple example of how a negative feedback loop might work.

Imagine we have sheep in a paddock. They eat the grass and reproduce. This is a positive feedback loop in that the more sheep we have the more sheep we have for breeding and so the population goes up exponentially.

Also, imagine that we have a population of wolves (currently separate from our sheep), these with a food supply) will breed and have an exponential population growth.

But, if we put the population of wolves in with the sheep, then the more sheep there are the more wolves there can be (positive feedback). But the more wolves there are, the less sheep there will be (because of predation). Eventually there will not be enough sheep to feed the wolves and the wolf population will shrink as they starve (this is the negative feedback loop).

As the wolf population drops then the number of sheep being eaten will also be reduced and so the population of sheep will increase.

In an economy, the amount of currency in circulation is a bit like the wolves and the value of the currency is like the sheep.

As you increase the amount of money in circulation, the value drops. But if you reduce the amount of currency in circulation the value goes up.

What you need to do is find a way to link the two together so that as the value drops, then currency will be removed from the system and so the value will rise again.

Yes, it does not crate a stable system in that there will be constant fluctuations of value, but it is much more stable than the current game economy systems in that if you do disrupt the system (add in more currency - or even value) the system will not go out of control (infinite exponential growth or collapse). You will get small periods of this kind of behaviour of the system, but it will rebalance itself.

The system is considered Dynamically stable.

And it is this dynamic stability that a player can exploit. they can do things to other economies (of other players or AIs) that cause their system to be suppressed for a while, or take actions to increase their economy for a while. But doing so takes "energy" in the form of resources and/or labour. And once that force is removed, the system will eventually return to it's typical state.

Level of Detail and Want Refinement
Same picture, seen from a different angle: It could be called normalized wealth, where a single meta-dollar represents all value in the game universe. Then we see that adding dollars to the system subdivides the meta-dollar into smaller slices, with each slice representing a less of the overall value contained within the game.

I too get the feeling that value, as is typically 'assigned', somehow comes up short in the definition.

An example: The Hunter brings a rabbit to the table, and the Gatherer brings veggies -- both a days' work. Together they have rabbit stew, which meets their nutritional needs more accurately than either the rabbit or the veggies alone. So in this case half of two is better than all of one. The total is still two days' work, but there is profit in trade. How can this be?

The profit comes from a difference in resolution. The rabbit is a coarse approximation of satisfying nutritional need, whereas the rabbit stew is a more refined version of satisfying those needs. This is quite a bit different from the typical representation of beginning without enough stuff, which little more than a simulated starvation.

A result is that the driving force behind trade is more interesting than just More/Bigger Is Better: Trading in order to more closely meet one's needs. And people can reach a state of 'good enough' rather than continuing to fine tune any given want, and then move on to another desire. Works as a nice complement to the minimaxing treadmill.

[Edited by - AngleWyrm on December 24, 2009 12:59:15 AM]

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Same picture, seen from a different angle: It could be called normalized wealth, where a single meta-dollar represents all value in the game universe.

Yes and no. If the value of this Meta Dollar is allowed to fluctuate then yes. If this Meta Dollar is kept at a fixed price then no.

the reason is in the example you gave.

With the Hunter and Gatherer, the Value of their holdings (the Rabbit for the Hunter and the Veggies for the Gatherer) is different for each.

The Hunter values half of the veggies more than he values half of the Rabbit as half the Rabbit is enough to satisfy his hunger, but not his nutrition. However the Gatherer values half the Rabbit more than Half his veggies for exactly the same reason (satisfies hunger but not nutrition).

Because the values are different for each, then the value they give away is less than the value they receive and the net value of the system (the Hunter and Gatherer) is increased.

It is the cost of switching tasks where this extra value is derived from. When someone switches tasks (form hunting to gathering) then there is a time cost involved in just moving from place to place, and then there is the cost of the time needed to become skilled at it as well. By eliminating these costs you can increase the value of the system.

If you have ever read Adam Smith's "The Wealth of Nations" then this is exactly what he is talking about in it.

Yes, and his work's reputation is well-deserved; it's a fascinating and enjoyable read. One of the many things he expressed is Specialization as a source of wealth. Cooperation/Trade reduces the overhead of switching tasks, and with daily experience in a more focused task the individual streamlines their domain. As a result, society's production is more than a simple addition of labor hours.

In the example, two people specialize into Hunter and Gatherer, each producing more than if they had to do both tasks individually. Once because they don't have the overhead of switching tasks, and twice because they become more efficient in their smaller area of expertise. The difference between what they would produce by individually performing both tasks and what they produce as a team of specialists is the profit from trading.

This suggests to me that production per person tends to go up as a side effect of increases in population, because each person can take on a smaller and more specialized job within a larger society.

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Original post by Edtharan They treat it like a resource like Coal, Oil, Food, etc. Money is not like this in a real economic system. Unlike these commodities, when you use money (spend it to do something), it does not disappear but instead remains in the economic system. Money is not "used up". This makes it behave differently in an economic system than other types of commodities.

I think money if different than the commodities because it is very separated from its intrinsic value, not "not used up". As for coals, oils and such they are just converted into other things., e.g. Energy which is used to create other things. We re talking about "fiat money" here, "commodity money" like gold, silver or salt is another matter.

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Original post by Edtharan When money is stored (eg: saved in a back account, stuck under a mattress, etc), it means that there is less of it circulating in the economy and this causes an effect as if the money was destroyed.

money in bank account or under a mattress is quite different, if you want to use real world as example.

I think the economic system in a game should not be to complicated, not too much effort from the player to understand it. And players who are not interested in real world economy will certainly not have an interest spike just because it is in a game.

If a perfect system is the goal, the real world is hardly a shining example. If a realistic system is the goal, then possibilities to "cheat" the system should be available.

About the inflation thing, it is certainly interesting. But all the other resources are produced without any limit, e.g. coal , steel. If there is a big surplus, price should go down according to the market mechanism. So the problem is no only about the money inflation but everything.

At least myself would not want to put so much effort into a "real" world economy model. Especially if a simplified model could be at least equally fun.

Compare to the real world, there are different types of money supply: M0, M1, M2, M3, etc.
In the real world, the total value of M0 less than or equal to the total value of Gold. The Gold Standard is still indirectly there, but it is not a "fixed value," and thus, we say that there is no more Gold Standard. The truth is that all value is indirectly compared to the value of Gold through different currency. The trade ratio changes dynamically, and thus, we have different exchange rates over time. The economy is also different at certain local regions, so some products are more expensive than other.

The problem with banking is the increase of money supply beyond the M1. M1 is the limit to safe increase in money supply, but when the money goes higher, the value of objects comes from debt; therefore, we are defining value as negative debt instead of a positive value. In the long run, the only way to pay debt is with more debt. The only way to balance this problem is with war to pull out of recessions.

This is the dynamic of military conflict and economy. The only way to stop war is by not allowing interest rates and fractional reserve banking, the two major causes that leads to wars after "The Great War" (The Great War is also known as World War I).

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The currency, whatever you make it, have to be a predefined limit resource. Similar to real life though, not all of that resource has been harvest (Not all the gold on earth has been mined out yet). Value is then created through implicit means, and it varies with how much the people think it is worth. If people think it worth a lot, then its price will be higher than its practical value. Therefore, everything has a marked up value because people believe it is worth more than the practical value. Anything that people believe that it is worth less than its practical value will disappear from the economy.

[Edited by - Platinum_Dragon on December 25, 2009 5:01:33 PM]

The British Pound Sterling was a pound of sterling silver. In the USA, the copper penny, silver dime, and gold eagle were also weights of precious metal.