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    Your Elvenar Team

Mike and Mack Economics 101

ajqtrz

Well-Known Member
Mike is a trader. Mack is a sea captain. Mike trades iron for various things and Mack steers the ship upon which Mike and a whole bunch of other traders live, trading things.

In the far distance is a bay called "Prosperity Bay." Mack's job is to steer the ship into that bay so that in it's smooth waters traders can trade without being tossed "too and fro," which is what happens when the sea is rough and unpredictable.

Now Mike wants to make a profit and Mack wants to get the ship where to where it needs to go. Mike is "micro-econmics" and Mack is "macro-economics," in case you haven't figured it out. Here's a typical 'day' in their lives.

Mike wakes up and discovers that there's a great buy on the port side of the ship. Tons and tons of iron at a really, really cheap price. So he scurries over and negotiates a price, finds a shipper to move the iron and soon the iron is on the starboard side. (Port=Left when facing the bow of the ship, Starboard=Right, btw) So now that iron is on the starboard side. Which is not a problem unless ALL the iron on the ship shows up on the starboard side. Then the ship lists (tips) and Mac will have a very difficult time getting it to Prosperity Bay. What to do?

Since the Captain has to charge for running the ship (government) he can use one of two strategies to keep the ship running toward Prosperity Bay. He can ask the traders to move things where they need to be. So he does. He asks Mike to move his iron to the lower holds (down deeper in the ship which means the ship sails with more stability) But of course, if it costs Mike more to move his iron down into the lower holds he's not going to do that willingly. After all, it's not his job to run the ship, that's Mack's job. So Mack, being a smart captain, uses his ability to charge more for things stored on the starboard side and raises the cost of moving the iron there to the point where it's cheaper for Mike to move it into the lower holds. This is, in essence, a form of taxation. Or he might give a bonus to Mike for doing so. Maybe Mike wants a specific spot where he can set up his iron shop because he can sell more there than his current location on the ship. Whatever Captain Mack controls he can use to encourage Mike to move the iron to where Mack wants it. Incentives can be many. Thus, Mack, as the "government" can ask and if that doesn't work, use the carrot (Incentives) or the stick (taxes and regulations).

The overall thing about it is that Mike isn't concerned with where the ship goes because it's not his job. Mack is concerned with where the ship goes and only tangentially concerned with if Mike makes a profit or not. Mack is concerned with steering the ship and studies the sea (the economic environment around the ship), the weather (the current events and how they impact things on the ship), the charts (economic theories) and so forth. Mike studies his accounts (for profit and loss), asset management (where what he has is located in the ship and how it's value is effected with that location), and how what Mack does effects those things.

In other words, the study of economics is the study of two goals. How Mike makes a profit or losses his shirt and how Mack steers the ship and how he keeps it going, hopefully, in the right direction.

Now, in case you are wondering, if all this applies to the game we are playing, not surprisingly, it does. The devs are Mack and are steering the game toward Prosperity Bay. They study and understand how various aspects of the game determine if they are heading toward "Prosperity Bay" or not. We are Mike. We each look at our experience and determine if playing the game is "profitable" enough for us. We seldom consider the overall direction of the game except in how it affects us and our play because that, in general, is not our job. The devs have to consider our "profit" of course, or we "jump ship," but in general if it was our misery that brought them into Prosperity Bay, in the long run we'd get misery. It's not their job to see to it we are "profitable," unless our lack of "profit" means we "jump ship." Each of us has a focus or job we do and that is the same distinction between us and the game as between micro and macro economics.

Anyway, that's how I see it, roughly speaking. (I could be wrong of course....right? LOL)

AJ
 

Evening Star Selene

Active Member
Great post, AJ! It would be silly for Mike to instruct Mack on why he should allow him to keep his iron on the one side of the ship because Mike really doesn't know that much about shipping (and has a vested interest in not moving it). Many people have commented on how well Elvenar adapts to multiple different play styles, that is because the devs don't tell us exactly how to play. We ought to respect their decisions in the same manner. Each side can make helpful suggestions and state their perspective, but in the long run, each should stick to their area of expertise.
 

Kataphractos

Active Member
The analogy is...not ideal. Firstly, because if Elvenar is a ship, it's not an ore freighter. It's a riverboat casino. The captain (Mack/the devs) does need real money to keep his boat running; that much is absolutely correct. He earns this money not by taking in physical goods from outside, but by selling casino chips (diamonds) to the passengers (Mike/us). The chips, of course, have effectively zero mass and volume, so it doesn't matter how many the captain has, or where he puts them. There are plenty of hidden sandbars out on the river that could sink him -- economic recessions, for instance -- but at least he doesn't have to be concerned about his cargo distribution.

Meanwhile, if Mike buys a few of these chips from the captain, that enhances Mike's ability to participate in the activities aboard the riverboat. Now one of those activities happens to be an impossibly large game of Settlers of Catan. (It's a very unusual riverboat!) And so Mike can call himself a "trader" in a very casual sense, because he trades sheep cards for wheat cards and vice-versa. But...both the chips and the cards lose all their value as soon as Mike steps off the boat. He can't pay his rent with them. Heck, he can't even use them in a different casino! Mike knows this. He knows that whatever he does on the riverboat -- be it a game of Catan or something else -- it's not a matter of "making a profit or losing his shirt". So far as Mike's checkbook is concerned, it's all a loss. So whatever Mike's motives are (I suspect something called "fun" might be involved), they cannot be grounded in anything we can consider "economics". Not micro-, not macro-.

So Mack and Mike don't want the same thing. And the things they do want, they don't want them for the same reasons. And none of the things they want bear any resemblance to iron ore.
 

Kataphractos

Active Member
But there's a second error, which is more fundamental. Aboard the good ship Elvenar, the captain does not set the ship's course. He has superior officers -- InnoGames in this case -- and they're the ones who decide whether his destination is Prosperity Bay, or the scrapyard. They have authority to make that decision no matter how well, or how poorly, the captain performs his job. They can command him to hire more staff, or dismiss them, regardless of the impact on the ship's operation. They can order him to install a giant paddlewheel on the starboard side, just to see what happens. Mack and Mike can both hope that Mack's bosses are sensible enough not to wreck a perfectly good riverboat. And so far that hope has been borne out. But if they did...well, the good ship Elvenar wouldn't be the first to suffer that fate.
 

ajqtrz

Well-Known Member
Its not about semantics. This offer is fair. This offer is a bargain. This offer is somewhat expensive. These terms are provided in game. An "unfair" trade is a trade that doesn't fall into the two star range...as defined by the game.

If both parties accept the value for value, it is fair. Yes but it would still be called "unfair" if it is a one star trade, because the game defines 2 star trades as fair. if they had defined two star as "even" instead of "fair" we would use that word.

Example: a 2 star cross tier trade demanding tier 1 goods for tier 3 goods is a fair trade according to the game, but its really not....it is in fact a really bad deal. But as long as the people involved in the deal are happy...none of my business. However, I do tend to email any new people who put up tier one goods for tier three....I think they need to know that they can still sell at zero stars. Which according to the game is not fair, but still a bargain.
Not to quibble but the "fairness" of a 2 star trade may or may not be "fair." The "fairness" of a two star trade is only implied by it being the default trade level and as far as I know the devs do not make such a claim directly. In any case, as I continue to argue, what the traders determine is fair, is fair to them. Fairness is a personal psychological measure of a transaction, not an absolute value set by some organization, even if they think they can set it by some rather arbitrary number or ratio. One of the observations you can make at this time is the abundance of scrolls due to a change in the game. I usually have to trade them at a 25-30 percent discount and am glad to do so as the value of them is about that much less than silk or crystal. Thus, when I sell them at a loss (remember a 3 star trade is "unfair" to the seller if you take the idea that a 2 star trade is automatically "fair."), I am getting what I determine is a "fair market value," for them. In spite of the desire to control trading, the law of supply and demand does have an effect on the goods we trade, like it or not.

The analogy is...not ideal. Firstly, because if Elvenar is a ship, it's not an ore freighter. It's a riverboat casino. The captain (Mack/the devs) does need real money to keep his boat running; that much is absolutely correct. He earns this money not by taking in physical goods from outside, but by selling casino chips (diamonds) to the passengers (Mike/us). The chips, of course, have effectively zero mass and volume, so it doesn't matter how many the captain has, or where he puts them. There are plenty of hidden sandbars out on the river that could sink him -- economic recessions, for instance -- but at least he doesn't have to be concerned about his cargo distribution.

Meanwhile, if Mike buys a few of these chips from the captain, that enhances Mike's ability to participate in the activities aboard the riverboat. Now one of those activities happens to be an impossibly large game of Settlers of Catan. (It's a very unusual riverboat!) And so Mike can call himself a "trader" in a very casual sense, because he trades sheep cards for wheat cards and vice-versa. But...both the chips and the cards lose all their value as soon as Mike steps off the boat. He can't pay his rent with them. Heck, he can't even use them in a different casino! Mike knows this. He knows that whatever he does on the riverboat -- be it a game of Catan or something else -- it's not a matter of "making a profit or losing his shirt". So far as Mike's checkbook is concerned, it's all a loss. So whatever Mike's motives are (I suspect something called "fun" might be involved), they cannot be grounded in anything we can consider "economics". Not micro-, not macro-.

So Mack and Mike don't want the same thing. And the things they do want, they don't want them for the same reasons. And none of the things they want bear any resemblance to iron ore.
While one can discuss the appropriateness of an analogy endlessly, I do believe the analogy as presented a better fit than a riverboat casino. The devs are Mack in that they charge for space/use of the ship. How a passenger pays for that and how much depends on if the passenger wants this or that space...some "spaces" being at a premium. By "space" I do mean anything the "ship" can offer, including city space, features, bonuses, and resources a passenger can purchase with diamonds. Diamond are how the ship is paid for and if the ship owners don't get enough diamonds the ship will be put in mothballs.

The economic recessions and all that are just the continually changing weather/environment/rocks/sand bars, etc. They are, for the most part, out of the captains control, but for which he can take actions that minimize/maximize their cost/benefit. If a storm is coming he can steer around it to some degree. Same with other problems. He depends on the charts and weather reports (economic theories and daily news reports) and does the best he can. And of course, since the ship is a single, isolated, entity, Mike can't take his cargo to another ship. To Mike there is no other ship. To the "real" person behind Mike there might be several "economies" in which he participates, but the boundaries of Mike's activities cannot cross over between ships.

The idea of casino chips as diamonds is straight forward but there is no need to distinguish between the types of things Mike has and the types of things he doesn't have except as a general rule. Mack will only accept, overall, diamonds, but does not require them if you decide you want to live in the less productive spaces aboard the ship. In other words, you are right that "casino chips" enhance our abilities on the ship, but they are not necessary. Mack is counting on the advantages of some parts of the ship over others and "rents" those parts to those who can purchase the casino chips.

To our bigger point, and perhaps more philosophical one, I disagree. If a person purchases a cruise which is advertised as "fun," and then boards, goes on the cruise only to have the ship flounder in the water, casting him overboard, having him stranded on a dessert island for a while., it's not fun. The courts do not say the "fun" he expected and didn't receive for his expenditure is worth nothing. It has the value for which he paid. And if the cruise line, for whatever reason, failed to deliver what it advertised (what cruise is not advertised as fun?), then he is entitled to at least a refund, if not a lot more. "Fun," has value and the courts have determined that failure to provide that value (within the scope of reasonable expectations), makes the provider exculpable. The fact that you can walk away from the cruse line after the cruise is over does not negate the value of the experience. The determination of if you received what you paid for, what the compensation might be if you did not, and all the legal mumbo-jumbo is part of macro economics in the form of regulations and court actions. In the game this means changes in the rules/procedures/costs/benefits that Inno sets and sometimes changes. Because it's not focused on the individual players advantage/disadvantages but upon the overall spending and retention of players, it's macro.


But there's a second error, which is more fundamental. Aboard the good ship Elvenar, the captain does not set the ship's course. He has superior officers -- InnoGames in this case -- and they're the ones who decide whether his destination is Prosperity Bay, or the scrapyard. They have authority to make that decision no matter how well, or how poorly, the captain performs his job. They can command him to hire more staff, or dismiss them, regardless of the impact on the ship's operation. They can order him to install a giant paddlewheel on the starboard side, just to see what happens. Mack and Mike can both hope that Mack's bosses are sensible enough not to wreck a perfectly good riverboat. And so far that hope has been borne out. But if they did...well, the good ship Elvenar wouldn't be the first to suffer that fate.
This is a bit of a red-herring. Mack is Inno games. Inno Games wants to be prosperous. Mack's job is to get to prosperity and to do that he has to pay attention to Mike's activities in such a way that Mike continues on the ship AND, preferably, desires the 'extra' amenities only diamonds can provide. That the Board of Directors or whomever doesn't make all the decisions but deligates them to "captains" only adds a layer of communication to the analogy, not make it more clear. Sorry if I didn't make it clear.

AJ
 

Iyapo1

Active Member
Not to quibble but the "fairness" of a 2 star trade may or may not be "fair."
More necromancy! 4 years ago Inno assigned the labels using specifically those terms. Expensive, Fair and Bargain. 4 years later and those in game labels do not appear on mobile, I dont know if that is a mobile limitation or if the labels were removed.

Also, not sure how this applies to your lovely analogy. But I am willing to overload the ship with iron and hit a sandbar with it! Mack of course wont allow that, but I can try!
 

samidodamage

Well-Known Member
Not to quibble but the "fairness" of a 2 star trade may or may not be "fair."
AJ, dammit! I was enjoying reading this thread. Why did you have to go necro a 2016 post from another thread talking about a system that no longer exists?? And then respond to it with conditions present today that were not present then??
I was looking forward to some back and forth between you and Kataphractos and while I did read your responses, I was too annoyed to enjoy them. I'll come back later when I can just let my eyes glide past your first paragraph...
I dont know if that is a mobile limitation or if the labels were removed.
The labels were removed on browser. The browser now displays 'Ratio:' with the numerical ratio of the trade. There is then a description, saying 3star trades 'bargain...wanted goods...less valuable than...offered goods', 2star trades 'fair...wanted goods...same value as...offered goods' 1star trades 'somewhat expensive...wanted goods...slightly more valuable than...offered goods' and 0star trades 'expensive...wanted goods...far more valuable than...offered goods'.
But, please don't overload the ship with iron and hit a sandbar. I still enjoy playing on this ship (in this floating casino?) and really want it to continue sailing! ;)
 

Iyapo1

Active Member
please don't overload the ship with iron and hit a sandbar. I still enjoy playing on this ship (in this floating casino?) and really want it to continue sailing! ;)
Mack is ready for me! He put several different sized cannons on the ship, jumbo(events), large(spire?), medium(tournaments?), and small(FA?). He keeps the smallest 3 on rotating fire to ward off pirates. But the jumbo is for tipping the ship off sandbars.

Hitting chapter 3 tomorrow and opening up the spire. I have not played in a FA yet either. So I am not sure if I ranked the cannon sizes correctly.

Either way Mack gave me all these free chips so when the nets holding the iron rot, I wont even notice.
 

AtaguS

Well-Known Member
AJ, dammit! I was enjoying reading this thread. Why did you have to go necro a 2016 post from another thread talking about a system that no longer exists?? And then respond to it with conditions present today that were not present then??
I was looking forward to some back and forth between you and Kataphractos and while I did read your responses, I was too annoyed to enjoy them. I'll come back later when I can just let my eyes glide past your first paragraph...
+1
Argh
Sigh
Grrr
 

ajqtrz

Well-Known Member
AJ, dammit! I was enjoying reading this thread. Why did you have to go necro a 2016 post from another thread talking about a system that no longer exists?? And then respond to it with conditions present today that were not present then??
I was looking forward to some back and forth between you and Kataphractos and while I did read your responses, I was too annoyed to enjoy them. I'll come back later when I can just let my eyes glide past your first paragraph...

The labels were removed on browser. The browser now displays 'Ratio:' with the numerical ratio of the trade. There is then a description, saying 3star trades 'bargain...wanted goods...less valuable than...offered goods', 2star trades 'fair...wanted goods...same value as...offered goods' 1star trades 'somewhat expensive...wanted goods...slightly more valuable than...offered goods' and 0star trades 'expensive...wanted goods...far more valuable than...offered goods'.
But, please don't overload the ship with iron and hit a sandbar. I still enjoy playing on this ship (in this floating casino?) and really want it to continue sailing! ;)
Call me "confused," but I'm not sure to what you are referring exactly. "necro a 2016 post?" means.... what? Did I resurrect somebody's view? In any case, the point is Inno was Mack from the beginning and we are still Mike no matter what or how the game changes -- unless they put us in charge, of course. So how has the game changed in the last 4 years that changes the fundamental distinction between micro (player) and macro (developers)? I believe I was playing under those conditions (2016, though it may have been 2017 that I started), and I can't see anything which is different to the point that it contradicts my point.

The following is an edit of the above since I found to what you were referring in a post by lyapo1.

@lyapo1 After I wrote the above response I looked back and saw your post that the devs did label the levels of trade. Too bad it's meaningless since the only measure of what's fair for me is if I think it's fair -- a statement that is true fopr everyone. Right now I think it's fair I discount my scroll sales because there is an abundance of scrolls. Who are the devs to tell me how I should feel about a transaction where I discount scrolls by 25%? Should I be mad at the person who takes those trades and gives me tne more needed silk or crystal? Should I be reporting them as "unfair" players? Of course not. They take the trades because they feel they are getting something more than "fair," and I offer the bargains because I view them, in light of current imbalances, as "a fair trade" to me! Ultimately fairness is a personal measure of how you feel about a transaction, not some arbitrary measure of how the devs might feel about the trade.

AND, sorry if I inadvertently upset your enjoyment, I'll try to include more humor in the future to balance things out. LOL. (Are we laughing yet?)

AJ
 
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Iyapo1

Active Member
The only issue I have with what you said is this
some arbitrary measure of how the devs might feel about the trade.

AJ
It is not an arbitrary measure. Calling it arbitrary is dismissive and insulting. People on this forum spent years pushing the current calculations through, and lord bless them for that! I am boosted in scrolls! One of my boosts is all but useless.

Other than that, no issue except you let the casino float away.
 

samidodamage

Well-Known Member
Well, I wrote this last night, saved the draft when I got distracted, then apparently forgot to come back and post it!
"necro a 2016 post?" means.... what? Did I resurrect somebody's view?
The post you quoted by DeletedUser2963 is dated November 28, 2016. Necro is sorta like 'raise from the dead'. ;)
Sometimes things that old are still relevant, but that thread...not so much. It was a discussion about the issues in the trader at that time. Ratios for the star ratings were different than they are now. Market conditions were much different then; your example of a glut of scrolls in the market, for example, was not present at that time. Sentient goods had not yet been introduced. When I started in March 2017 the end game chapter was S&D, so direct knowledge of what was around in 2016 is beyond me, but it's fair to say statements made then about market conditions and the trader ratios that determined the star ratings were very different than they are today. To me, that makes digging up that old post distracting and irrelevant to this discussion.
As far as the word 'fair'. I try to give some leeway in terminology, as I'm not sure how things translate to English from other languages. I'm also not sure that there was ever a use of the word 'unfair' in the official labeling of the star ratings. I think that was started by players trying to define trading rules for their FS's and such. There was and is use of the word 'fair', but I take the star ratings to be more: 'Good, Fair, Below Average, Poor' and meant as a guideline, not some emotionally laden 'that's fair', 'that's unfair!' judgments. I also understand there can be a difference in ratios even among the same star rating, but divisions had to be made somewhere to provide some relevance.
Now, can we get back to talking about whether we're on a boat or if we can have a floating casino, too? :p
 

BrinDarby

Active Member
Great post AJ, I just wish 40 yr olds paid the same price 18 yr olds do......
I guess its some sort of loyalty program, or earned income credit scheme....
 

ajqtrz

Well-Known Member
@samidodamage I reread my original post and found no place where I quoted anybody. At least if I did it was just a coincidence.

In addition, you are right to point out the use of fair as a label. "Fair" is sometimes used as a label in a graduated scale, usually in the middle. Unfortunately, most people, when labeling something as "unfair" in this forum are not using it as part of a scale, as in "Great, Good, Fair, Weak, Bad" or something like that, but as a moral judgement. Thus, it's not a relative measure as they use it, but a term of blame, implying it should not be so. A scale merely tells you where something is on the scale, and while it implies praise/blame, it is not the same thing as what most people use the phrase, "it's unfair," in general conversation.

And it's a ship, not a casino. ;>). A casino provides services but you must invest some real cash to get those services. The ship of Elvenar requires no cash investment and is free to board. However, to get some amenities while aboard you will need "real world currency."

But either way, it probably just me quibbling more over semantics.

@lyapo1 Sorry if "arbitrary" seemed a bit over the top. Certainly a good deal of consideration was given to how the value of things would be related to other things. The ratios in the trader are what they are exactly because the devs are Mack and they compute how things will run based upon their models (i.e. weather forcasts). The term "arbitrary" was not meant to be a denigration of the people at Inno and their decision making processes. Perhaps though, it's my fundamental belief that any market valuations done by the authorities are in danger of become arbitrary since they are, over time, almost always out of step with market forces. Humans can predict market movements based upon good models, but long term predictions are difficult and usually wrong, and thus the long term valuations made at the macroeconomic level often end up taxing the markets rather than aiding them on their journey Prosperity Bay. The "arbitrariness" of such valuations is in their basic "snap shot" approach when markets are dynamic and, long term, somewhat unpredictable.

AJ
 
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samidodamage

Well-Known Member
@ajqtrz Your original post didn't quote anyone. Where I got sidetracked was in your response here

Now all I need is for @Kataphractos to come back and defend the idea that it's a casino. Since I see many 'gambling' scenarios in this game, I'm thinking it has to fit somewhere in the economic scheme of things...
 

ajqtrz

Well-Known Member
Maybe one of the activities on the ship is a gambling den. My point is not that gambling isn't done, that's true in or out of the casino because everything we do is stacked with odds. It's only an argument that there is no need to make the ship a casino since the purpose of a casino is to make money, not take their casino to Prosperity Bay (where everybody is prosperous). A casino in only concerned with their prosperity and cares less than anything about if their clients win or lose. And, sadly, it doesn't make a lot of sense to about 1/2 of gamblers if they win or lose, as they are addicted. According to Gamblers Anonymous, 1/3 to 1/2 of those gambling at any one time are "problem gamblers," which is not quite, but quite close to saying they are addicts. If I sold chocolate and 1/3 to 1/2 of my customers were addicted I would feel morally obligated to stop selling chocolate. That would be my choice based upon my sense of my moral responsibility. A casino, obviously, does not see it that way.

AJ
 

BrinDarby

Active Member
I can't seem to "like" posts all of a sudden, wierd ......

AJ, are there parts of prosperity bay, such as ports of call, that are off limit to some shipgoers ??
Is the "ship" metaphor, more a shipping line company with many boats, or do you mean just 1 boat ???

While it may be available to all passengers, fresh water to drink, its very possible... that without
buying a plastic cup you are not allowed to just drink straight from the barrel of water..... and
its only 1 cup of water per cup, not unlimited water per cup.....

How do you rationalize things like passangers that have made the trip 20 times, a cup of water
is 1$ and the passanger on his 1st trip pays 5$ for the same cup ??
BrinD