Changes to the market

[Shadowthrone]

So I’ve been toying with the idea of ingame changes that could be suggested and hopefully tested to make the trading more volatile and more market based. The reason being is simple.

In the status quo, the market works on the simplest principle, but low, sell high. As all markets do. What this means in essence for 72 hours I can put up a buy or sell offer and it exists and sets the basic benchmark from where the other offers are derived. That is because there’s no real motivation for me to keep deleting my original offers but play with the present market. This long period for offers sets a minimum base and since the market is a simple fight in general in undercutting one another the prices automatically deflate and there’s no real price reset, unless of course folks try to corner the market. I’ve done it a few times and invested in such practices and made good money, but it’s not something that can consistently be done, thanks to the volume and liquidity required. This brings us to te present scenario, where the consistent supply and demand has led to a deflationary effect seeing prices tumble. I’m not particularly averse to the status quo, but do understand the view that it could be changed and the arguments for it. Given that starting point, my suggestion follows below.

In a real market, supply and demand are but two factors that determine prices. The third and more important factor is time. Trade, especially with the rise of automation is further defined by time. The faster you match buy and sell offers, the more you can make, the slower, you are, the more likely you’re going to lose. Mechanical changes to resources/production etc are only good so far as the time factor is kept consistent as it is right now. Which is why, to introduce more volatility and chances for price fluctuations I propose the addition of time to the markets, that could add another layer to the game and make markets more interesting. This suggestion comes with two methods to add this factor in and whichever seems more plausible and realistic could be picked up.

 

1) This one is straightforward really. An automatic reset of all trade offers after eight hours. This way, the benchmark offers don’t survive for 72 hours and people would need to keep trading and matching offers, giving the markets scope to fluctuate and folks to make a buck while possibly increasing resource costs. The fluctuation is good in the sense that smart traders could effectively move prices as they see for, and helps mirror real markets in a simplistic format and removing the deflationary effects of the 72 hour offer toner we have in the status quo. There’s a whole raft of economic theory, which showcases how queuing of offers and constant resets, adds an additional burden and therefore prices. This burden while is an addition to the players, it’s not as exhaustive as other changes and offers a simpler solutions to help keep prices moving, without major mechanical changes to the supply of goods, as much as controlling the demand.

 

2) Continental exchanges is the second method that could be used. The idea is, Continental exchanges are created to sell the goods that can be presently manufactured on those continents. Given we have an ingame date and time feature, this adds a specific use to that feature, where the exchanges go online for specific periods and are offline for the rest of the day. This way you have six continental exchanges and use the time for it to open and close, allowing specific time periods for trading and in effect creating a more complex demand and supply model which can help boost the mechanism and give a larger meaning to multiple ingame features that already exist.

Now for the preemptive rebuttals,

1) Most Trade already happens outside of the markets: Yes and this in by no means is designed to affect dark pools. But all dark pools, even those within this game exist with the price benchmarks set by the market at large. So the large deals I have completed, I’ve used prevailing market prices and accordingly discounted or offered discounts for purchases. Dark pools will continue existing and should continue to do so, but with price volatility, the knock on effect should theoretically be felt within these pools.

2) The game shouldn’t become more complicated: Adding time doesn’t mechanically change much, as much as controls the markets in a means that exists in real life. Opportunities to trade will continue to exist but the resource spread, maybe different and controlling the time, could make trading more interesting then it is, without adding too much complexity to the present system.

3) This is a biased suggestion: I mean being an active trader, this would effect me more, given I have a very different RL time zone to most others presently and probably would affect me more given when volumes will be bought or sold and if I can’t log in to flip trades during that time. It is what it is, but should be more fun in the long run.

If anyone has any questions, or want to add to this suggestion, I am all ears.

-Keshav.