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The Implications of a Dynamic Economy.
It has been said that we should be able to stockpile and supply weapons, engines, batteries, ships, etc. to stations as trade goods for profit. Once the dynamic economy is in place, this would actually be a very smart, albeit slightly dangerous system of profit. Considering the amount of conflict we face in the game, however, I fear this will lead to a galaxy full of arms dealers. If the weapons all have a predictable economic model for profit, that is all people will ever sell. It is only a probable scenario of what could happen if such a system was instituted.
The root of this problem lies in the mechanics of supply and demand. We can estimate with relative certainty where sunflares will be used, thus knowing where we can get the most for our money. The normal trade-goods, however, are completely unpredictable. Unlike the real-world's dynamic economy, we cannot assume that a water purification unit will be more valuable in one sector than an other since these items are not consumned, merely bought and sold. Thus, the dynamic economy becomes less like a simulation of a realistic economy and more like a game of roullette. In order for a dynamic economy to work, there needs to be a distinct character for each sector. For example, in the real world, we know oil is worth less in Saudi Arabia than it is in Japan since Saudi Arabia is a source of oil. If a swarm of traders were to flood Japan's market with oil, the value would drop drastically, but it would still remain relatively high in relation to Saudi Arabia. Similarly, it would make sense that a sector with a great deal of Ice-roids like 14 not give much money for a water shipments since they already have huge asteroids to mine water from. Creating a basic character for each sector and a system of needs and necessities for every station will make the dynamic economy much more predictable.
Yet, since I have not seen the dynamic economy in action, they may have already thought of this. In which case, if such a sytem is implemented, economic power will suddenly become a significant factor in the game. A wealthy person will be able to affect the prices of various goods by buying out all the supplies they need from various outlying sectors, starving a target sector out until prices are sky high, and then sell them, slowly and steadily for absurd profits.
Players would also be able to buy trade goods as investments, similar to how the commodities markets work today. A player could buy 100,000 units of Water Purification Units, move to a sector and hope the demand for them rises and sell them for profit. Or lose significant sums of money. Indeed, a rival businessman would be able to use his resources to significantly drop the price of said goods causing his opponent to lose all his money. The game becomes much more exciting when fortunes can be won and lost through economics rather than merely medical bills and ammo.
*whew*
The root of this problem lies in the mechanics of supply and demand. We can estimate with relative certainty where sunflares will be used, thus knowing where we can get the most for our money. The normal trade-goods, however, are completely unpredictable. Unlike the real-world's dynamic economy, we cannot assume that a water purification unit will be more valuable in one sector than an other since these items are not consumned, merely bought and sold. Thus, the dynamic economy becomes less like a simulation of a realistic economy and more like a game of roullette. In order for a dynamic economy to work, there needs to be a distinct character for each sector. For example, in the real world, we know oil is worth less in Saudi Arabia than it is in Japan since Saudi Arabia is a source of oil. If a swarm of traders were to flood Japan's market with oil, the value would drop drastically, but it would still remain relatively high in relation to Saudi Arabia. Similarly, it would make sense that a sector with a great deal of Ice-roids like 14 not give much money for a water shipments since they already have huge asteroids to mine water from. Creating a basic character for each sector and a system of needs and necessities for every station will make the dynamic economy much more predictable.
Yet, since I have not seen the dynamic economy in action, they may have already thought of this. In which case, if such a sytem is implemented, economic power will suddenly become a significant factor in the game. A wealthy person will be able to affect the prices of various goods by buying out all the supplies they need from various outlying sectors, starving a target sector out until prices are sky high, and then sell them, slowly and steadily for absurd profits.
Players would also be able to buy trade goods as investments, similar to how the commodities markets work today. A player could buy 100,000 units of Water Purification Units, move to a sector and hope the demand for them rises and sell them for profit. Or lose significant sums of money. Indeed, a rival businessman would be able to use his resources to significantly drop the price of said goods causing his opponent to lose all his money. The game becomes much more exciting when fortunes can be won and lost through economics rather than merely medical bills and ammo.
*whew*
you could make it so that stations need supplies and if a station runs out of supplies (food, water, luxury), they call for the goods and you can sell them there for higher prices than normally?
and:
if weapons are the only thing ppl ever buy and sell, it will all depend on how fast weapon cargo is generated (you can't just make it instant, that'd be stupid and wouldn't change much).
and:
if weapons are the only thing ppl ever buy and sell, it will all depend on how fast weapon cargo is generated (you can't just make it instant, that'd be stupid and wouldn't change much).
Nice post, (EDIT, COMMENT ABOUT OIL REMOVED TO REFLECT UPDATED INITIAL POST) :)
I believe that some of the economics of a dynamic economy would be very easy to trace/predict. For instance, minerals would always be in demand at the processing centers. lubricants and pre-fabricated parts from those processing centers would be needed at other high tech manufacturing centers, and finished products from the manufacturing centers (your water purification units for instance) would be needed just about anywhere that they weren't being produced. Of course if someone dumped several hundred of them in one sector the price would temporarily bottom out. but anytime you have an item that is used but not produced locally, there is a demand for it.
As to buying up all the units in one area, that works wonders, untill a rival realizes that you are doing it (obviously this would take place in a universe larger than 16 sectors), gets together a group (or just buys a friggin huge ship) flys a long route to another system, buys up the comodities you are hoarding locally and brings them back. (of course this opens up all kinds of blockade/blockade runner options for players, more fun for all)
I believe that some of the economics of a dynamic economy would be very easy to trace/predict. For instance, minerals would always be in demand at the processing centers. lubricants and pre-fabricated parts from those processing centers would be needed at other high tech manufacturing centers, and finished products from the manufacturing centers (your water purification units for instance) would be needed just about anywhere that they weren't being produced. Of course if someone dumped several hundred of them in one sector the price would temporarily bottom out. but anytime you have an item that is used but not produced locally, there is a demand for it.
As to buying up all the units in one area, that works wonders, untill a rival realizes that you are doing it (obviously this would take place in a universe larger than 16 sectors), gets together a group (or just buys a friggin huge ship) flys a long route to another system, buys up the comodities you are hoarding locally and brings them back. (of course this opens up all kinds of blockade/blockade runner options for players, more fun for all)
Yeah, the prices will tend to stay somewhat stable. If a huge amount of people bring flares to sector 9, the price will drop, making it not as profitable. Thus, they'll stop bringing flares there (except for a few of them, who'll do it anyway). Conversely, if nobody brings flares to sector 14, the price will go way up, making people bring them there (until there isn't enough of a demand for them). Simple supply and demand... :P
"Nice post, but i think oil is more valuable in japan than in saudi-arabia, since oil in Saudi Arabia would be like water in sector 14. Lots off it, no need to ship it in."
-Yes I fixed that. It was initially a different analogy with water in Saudi Arabia, I missed a word when changing the analogy over.
-Yes I fixed that. It was initially a different analogy with water in Saudi Arabia, I missed a word when changing the analogy over.
but pyro, if only very few people bring flares to s9, the price will go up again :P
it'll also depend on how willing people are to take risks for that profit.
just hypothetically (it requires that another suggestion be incorporated):
a trader chooses to run flares to a pirate station which is heavily guarded (remember: to discourage ppl from pirating o.-). then the trader would face defense ships, and not to forget: stupid pirates who would kill the trader and sell the flares elsewhere (s9, e.g.), thus depriving themselves of their most reliable tool.
the possibilities...
it'll also depend on how willing people are to take risks for that profit.
just hypothetically (it requires that another suggestion be incorporated):
a trader chooses to run flares to a pirate station which is heavily guarded (remember: to discourage ppl from pirating o.-). then the trader would face defense ships, and not to forget: stupid pirates who would kill the trader and sell the flares elsewhere (s9, e.g.), thus depriving themselves of their most reliable tool.
the possibilities...
That's one of the reasons weapons will remain at a fixed price in the initial implementation (though I would like to see a demand economy on them at some point). Only commodities will have dynamic prices. The other thing is that you can't actually transfer weapons as goods to other players, or to other stations unless they're equipped on your ship. I guess you could trade arms in a Rag or something.
Cool. Will there be a rudimentary consumption rates for trade goods in sectors as well?
I hope "dynamic" doesn't mean "randomly changing".
I'd much rather see a real supply & demand product loop, where for example, the supply of goods in sector 11 are dependent on the delivery of goods from sector 9, 9 depends on 7, and 7 depends on 11.
This makes timing more important to trading (giving smart committed players a slight advantage), but leaves the mechanism simple enough to be obvious.
I'd much rather see a real supply & demand product loop, where for example, the supply of goods in sector 11 are dependent on the delivery of goods from sector 9, 9 depends on 7, and 7 depends on 11.
This makes timing more important to trading (giving smart committed players a slight advantage), but leaves the mechanism simple enough to be obvious.
I would hope that the dynamic economy would change greatly depending on the amount of usage of a certain station. Stations that are used very very often (s9\s7) would require water filters or whatever they were called, these would be consumed depending on the amount of people in the sector\station and the size of the station. Maybe 5 an hour for a outpost, 40 an hour for something like s9. But certain stations would never fall below a certain demand point because they could just make itr themselves for any more then the price they are asking for, these would not be applied to company owned products.