From: geoff@cs.monash.edu.au (Geoff Wong)
Subject: Re: A Working Mud Economy
Organization: Computer Science, Monash University, Australia
Date: Thu, 1 Oct 1992 02:22:31 GMT

acoggins@stone.Princeton.EDU (Adam Cody Coggins) writes:

>In article <christiansen-180992131335@128.95.214.201> christiansen@chevax.cheme.washington.edu (derek x christiansen) writes:
>There are a couple of questions I would like answered about the previous
>and I'd like to make a couple of points/suggestions, which will hopefully 

Ok - sorry I took so long to repsond to your reply - I have been
on holiday and writing some algorithms to compete in a simulation based
upon this economy model (an outside mud simulation).

>Firstly, is there any problem with keeping the amount of money constant 
>number of players will continually increase?  It seems to me that there may
>may not be, but that even if there is, occasional 'printing' of money by
>central bank would/could relieve it.

The central bank effecitively "prints" money whenever it makes a loan;
the system effectively functions around loans; which is why it
is called the "Loans Standard". The amount of money in the system
is variable depending on the amount of loans outstanding. Thus
an easy way to regulate the system is to control the interest rate
(although the interest rate should really be based on the number
of defaulters so is self-regulating (generally) added to the current
savings interest rate).

>Also, do you have it set up so that armor and weapons decay with use?  It
>that there would be a problem if that were not the case...

Weapons and armour etc do decay although not at a rate I'd like
to see. If they didn't there value would simply keep going down
and down because of the rate of item creation. 
Another way to control this is to have a closed ecology; but
that is another topic altogether - some people seem to be confusing
ecology with economy. The economy only puts values on in game stuff;
generally based on the difficulty obtaining it. Unfortunetly on
most muds this is pretty much zero because of the abundance and
ease of obtaining goods.
Anyway to keep the economy flowing we have monsters "purchasing"
items from the cheapest shop they can find (debiting the wizards bank
accounts - this discourages wizards from creating multiple of the
same item!). This also controls the numbers of items in game.

>You implied at one point that there was a standard interest rate on loans 
>across the mud.  (I think.  If not, ignore this.)  But it seems that it
>would be

The central bank has a standard loan rate; its main purpose is
to loan to "large" loaners. In this case it should mainly be
player owned banks; these banks then determine ancillary loans rates
and special loan deals etc.

>You also said that the interest rate must vary with the rate of defaulting?

Because the difference between loan interest and savings interest
(which is what we're interested in) is the only way (besides transaction
charges etc) that the bank can bring the economy back to a zero sum
(all loans should equal all positive money in the economy).

> Why?  If something has been mortgaged to obtain the loan, then the bank
>can collect on the mortgage.  If it was a loan without collateral(sp?),

Collateral can simply be used to repay some portion of the loan
if it exists; unfortuneatly most "starting" players aren't going
to have collateral.

>then the bank shouldn't have made that loan, and so it deserves to lose
>it's money.  If they choose to change their interest rate, they may, but I

This is not the case with the central bank which must keep the economy
balanced. Although for individual player banks etc this is the case!
Of course we try to discourage banks from defaulting.

>If a wizard goes bankrupt, does he get evicted to level 19, until such time
>he can pay off his debts?  How does this affect the status of his castle? 
>Does it remain open, or does it close?

If a wizard is getting into serious debt then we have a problem;
he obviously needs to stop getting further into debt if possible.
His debt may be distributed to other willing wizards if they're positive
or not in much debt. If a wizard continues to loose money hand over fist
then it's really an indication his area is a "gift" area which we don't
want :-). So I'd assign another wizard to fix it and I'd probably warn
the wizard in question - then if he continued to be a problem
the only solution (as for any problem wizard) is to reduce him to a Lord
(err - "superior" player type).

>If a subsidiarity bank goes bankrupt, do it's debtors now owe the creditors
>of the bank, assuming there are some, and that it's not entirely on its
>own?

If a subsidiarity bank goes bankrupt then the central bank bears
the burden of it's debt and this will probably cause a rise in
interest rates in the central bank.

>Is there any system of forcing repayment?  It occurs to me that a situation
>could arise in which a player or wizard could force someone into bankruptcy
>by not repaying a loan...I haven't figured all the way through this one,
>but maybe someone else has ideas.

You can't force repayment; of course you can liquidate someone's
assets and use this to repay the loan. Failing this simply "black-ball"
the person as a bad debtor; don't let them use the bank(s) in question.
This is a large deterrent; as they no longer will be able to 
get loans or savings interest.

>Also on the subject of producing armor and weapons, do players pay to mine
>ore, and then sell to weapons-makers?  If so, do you limit the rate at
>which ore can be mined, or set an overall limit to how much ore the world
>has?  I'd be particularly interested in hearing the response to this.  

An ecology question really; I'll post about our ecology sometime.

geoff
--
No Easter Bunny, No Santa Claus, No God.


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