Ur Lord Tedric Posted June 17, 2004 Report Share Posted June 17, 2004 Well, seeing as the subject came up and the lack of a monetary exchange medium was mentioned, perhaps we could suggest one....... Underpining much of our thoughts of trade possibilities, let alone gauging the economic growth of our empire, we have come up with a method of 'costing' items based upon the effort needed to produce them on the assumption that you have be build the item from Raw Resources. Now whilst many of us will have mines instead, this just means we can produce the item at a cheaper rate, probably for our own use. It's the additional stuff you need to make to trade.... Either way, this is the idea behind the Galactic Raw Resource Equivalent (GRRE) price, expressed in 'G$'. It is determined by adding up the cost of the resources need to build any item. Now whilst I have 'costed' all the items I know of to come up with such comparisons as: 1 x Cargo Bay/Fuel Tankage/Armour = G$150; and 1 x NTWD = G$13,250,000.... It's quite possible to work things out from the high level resource cost.... So, 1 ton of Steel comes from 3 tons of Iron, which would come from 30 tons of Raw Resources - ergo 1 ton of Steel = G$30 Whereas 1 ton of Electronics requires 2 tons of Refined Crystals and 1 ton of Synthetic Materials (these two being the same 'cost' as Steel), which means that 1 ton of Electronics = G$90 as it's 3x more 'expensive' to make. Now, of course, this system makes no difference between Normal, Improved or Advanced materials as the 'cost' of production doesn't change. If people are trading different levels of technology they may think of 'weighting' their result to encourage a 'fair' trade.... What it does allow is the 'costing' of any item, or group of items. I calculate the cost of each ship too. What this does allow me to do is make broad building plans, as I've also calculated the empire's economy on the same basis.. By calculating all Mine production in tons and multiplying by 10, adding in Raw Resource production as is, and then Fuel Production (including by regular skimming) x 30, then it's possible to guage the size of your economy...... It should probably be in excess of G$120,000,000 per turn...... Anyway, food for thought perhaps. It does and would allow for a method of at least establishing a basis for trade. Any questions, feel free to pursue the topic if you wish, or ignore it as you like..... Regards Chief Trader to Ur-Lord Tedric Quote Link to comment Share on other sites More sharing options...
EternusIV Posted June 17, 2004 Report Share Posted June 17, 2004 Good sir, an insightful post! This is amazingly similarly to what we use for our accounting methods. One minor twist: you add 'value' to those items made with Improved and Advanced Goods. It seems a fair trade to DOUBLE and TRIPLE such value respectively. If you were to draft something that we could refer to on a regular basis, I'd be more than happy to propose it in the Senate and refer my neighbors to the system to standardize trade calculations. Quote Link to comment Share on other sites More sharing options...
Gary Carpenter Posted June 17, 2004 Report Share Posted June 17, 2004 Seems reasonable, but does it take into account my sales skills? :lol: Quote Link to comment Share on other sites More sharing options...
Ur Lord Tedric Posted June 18, 2004 Author Report Share Posted June 18, 2004 Good sir, an insightful post! This is amazingly similarly to what we use for our accounting methods. One minor twist: you add 'value' to those items made with Improved and Advanced Goods. It seems a fair trade to DOUBLE and TRIPLE such value respectively. If you were to draft something that we could refer to on a regular basis, I'd be more than happy to propose it in the Senate and refer my neighbors to the system to standardize trade calculations. You're welcome..... Certainly we had previously thought of things like Doubling for those made with Improved and Tripling with Advanced, in fact we previously went down the route of using the simple multiplicands of: Poor tech = x1; Fair=x2; Adequate=x3; etc.... However, we came to the conclusion that the value of the system was wider than the perceived value of the items. It's basis is an economic value, pretty much rooted in a measure of industrial capacity. But the real point, is that it's only a start point for trade negotiation. As has been pointed out in the other thread, if you have a trusted total ally and are close enough to establish a meaningful industrial colony on their world, then they can 'ask' you to build anything they can supply the resources for. The only actual downside of this is the need to spend real money on changing a production queue on someone else's whim. However, it is also possible to set up a long term trade agreement with a neighbour, where it can be reasonable to negotiate on the basis of 'shared' production. Using the 'costs' calculated on this system, it's fairly easy to negotiate a fair settlement, even if you are trading for things of different technology levels. When trading in the wider community, however, empires will have to get used to sometimes trading at a 'price' differential. It will soon happen that, for example, we have something that a new contact would like to trade for, but they don't actually have anything that I need that I cannot build for myself. In that case, they may be happy to trade me simple items that I will always need, like Fuel Tankage or Fighter Bays, at an effective loss.... I'll work on a proper little guide over the next period and try and get it put up here for discussion and review, before preparing a finished article..... Regards Chief Trader to Ur-Lord Tedric Quote Link to comment Share on other sites More sharing options...
Ur Lord Tedric Posted June 18, 2004 Author Report Share Posted June 18, 2004 Seems reasonable, but does it take into account my sales skills? :lol: :lol: Actually, yes - worse still it actually encourages Piracy, although they may not get all they want for the items they seize and try to sell...... Certainly you will be able to compete to see who can make the most profit! If you can sell an item to one empire at effective exchange of 5:1, then away you go..... The Pirate, however, may have to accept a much lower margin than equal value, because of the danger to the 'fence' of trading in 'stolen' goods. Trading havens for pirates and those empires that live on the fringe and sell/buy with anyone, will be interesting places....... Chief Trader to Ur-Lord Tedric Quote Link to comment Share on other sites More sharing options...
Sakarissa Posted June 18, 2004 Report Share Posted June 18, 2004 *sets up shop* You got items 'acquired' from a friend that no one will buy? Just bring it on down and we will wheel and deal with you and take that stuff off your hands! The only trick is finding me. Sakarissa Quote Link to comment Share on other sites More sharing options...
ali-t-akua Posted June 18, 2004 Report Share Posted June 18, 2004 Isnt what Tedric is doing is determining the cost of items by referencing them to a common basis (Raw Resources)? The value of an item is really based on the supply and demand (Basic Microecon). Of course if you only have one empire to trade with it will be what you agree to but I would assume that as people expand and are able to travel to many empires, supply and demand would play a larger role. Quote Link to comment Share on other sites More sharing options...
AKO Posted June 18, 2004 Report Share Posted June 18, 2004 Hello Ur Lord Tedric, Thanks for your post, however, I do not fully agree with your model. Following your valuation, it would mean that you would be happy to trade with me 150 raw materials for 1 cargo bay. That does not apply any value to the conversion effort made by the industrial complexes. We all know that an investment in industrial complexes takes very long to pay off, so if I apply my industrial capacity to convert raw materials into cargo bays, I also want to see some payment for my efforts. In my calculations, 1000 iron has the value of about 50.000 raw materials: 10.000 raw materials as input and 40.000 raw materials as compensation for my effort (loosing the industrial capacity of 40 industrial complexes for one turn). Please send me an email if you are interested in the model. Kind regards, AKO Quote Link to comment Share on other sites More sharing options...
Clan Elder 'Keen Posted June 18, 2004 Report Share Posted June 18, 2004 I can see three variables that impact “value” of an item: 1) The value of the components. This is the raw resource model described above. 2) The value of the manufacturing. Jump Survey Sensors > Electronics > Refined Crystals > Crystals > Raw Resources due to the consumption of industrial capacity. 3) The value of the technology. At the most basic level, Advanced > Improved > Basic. But we can also assume that some technology is so commonplace that there would be no increase in value associated with it, for example Improved Crystals. But less common technology like Improved Plantfoods might be worthy of a value multiplier. This is the hardest aspect to determine since it will be highly subjective to the parties involved. So, a better formula might be… Galactic Exchange Unit = (GREE) x (Industy Consumed) x (Technology Multiplier) The second two variables would have to be constantly adjusted with time due to ever improving industrial output and advancing technology, as well as the supply and demand of trading empires. Quote Link to comment Share on other sites More sharing options...
ShadowKitsune Posted June 18, 2004 Report Share Posted June 18, 2004 AKO, You're right that the model doesn't work well in a Finished Preduct-for-Raw Materials paradigm, where one of you is using Industrial Capacity (e.g. Industrial Complexes) and the other is not. However, it does hold up pretty well in a Finished Product-for-Finsihed Product paradigm where both are using Industrial Capacity. The GRRE Model has the advantage of simplicity, which is a big plus in my corner of the Universe. Admittedly, it does not include the amount of used industrial capacity, UIC. But UIC is a hard beast to catch. How do you come up with a fair model when one Empire may be using standard Industrial Complexes with no modifications and another may have Improved Industrial Complexes plus the 10% Industrial Science (Horizon Technology) production bonus. I would be interested in seeing your Economic Model, AKO, though. -SK Quote Link to comment Share on other sites More sharing options...
ali-t-akua Posted June 18, 2004 Report Share Posted June 18, 2004 I can see three variables that impact “value” of an item: 1) The value of the components. This is the raw resource model described above. 2) The value of the manufacturing. Jump Survey Sensors > Electronics > Refined Crystals > Crystals > Raw Resources due to the consumption of industrial capacity. 3) The value of the technology. At the most basic level, Advanced > Improved > Basic. But we can also assume that some technology is so commonplace that there would be no increase in value associated with it, for example Improved Crystals. But less common technology like Improved Plantfoods might be worthy of a value multiplier. This is the hardest aspect to determine since it will be highly subjective to the parties involved. This is a good list of the factors determining cost but there is a fourth item when it comes to value and that is the relative scarcity of an item. If Empire A is the only one making something and it is something the rest of the empires need, Empire A can charge any amount they want and that will be the value. By the way I am not suggesting that the models suggested here are not helpful. I think they are. Just I think they are the starting point of a discussion, not the complete determinant of value. Quote Link to comment Share on other sites More sharing options...
The Colony Posted June 18, 2004 Report Share Posted June 18, 2004 We believe in the +30% variation. Quote Link to comment Share on other sites More sharing options...
Ur Lord Tedric Posted June 18, 2004 Author Report Share Posted June 18, 2004 Firstly the model does assume that one is wishing to trade finished items. We did have more complex models earlier, but applied the KISS principle later.....we aren't expecting wholesale transfer around of Raw Resources - the transport costs would be HUGE! So we assumed that most everyone has the infrastructure anyway..... Secondly, the 'cost' calculated is only the starting point for any negotiation and the actual trade could show wide variations - supply and demand then take their place..... If you are simply trading production between total allies and want to be fair about it, then you can use the initial costs directly and know that you are being fair. On the other hand, if you want a tithe from a client empire and settle on obtaining G$30M per turn from him in finished items, then you'll know that you're getting between 20-25% of his entire output...... If a ship is detroyed and reparations are sought, then it's a way to calculate it reasonably fairly..... Oh, there's a lot of ways the 'costs'could be used...... Chief Trader to Ur-Lord Tedric Quote Link to comment Share on other sites More sharing options...
Laserwolf Posted June 18, 2004 Report Share Posted June 18, 2004 Perhaps a multiplier equal to the square of the generation of the advance is in order. At the very least it should be 3x per generation of tech... Quote Link to comment Share on other sites More sharing options...
The Boo Consulate Posted June 18, 2004 Report Share Posted June 18, 2004 Hello Ur Lord Tedric,Thanks for your post, however, I do not fully agree with your model. Following your valuation, it would mean that you would be happy to trade with me 150 raw materials for 1 cargo bay. That does not apply any value to the conversion effort made by the industrial complexes. We all know that an investment in industrial complexes takes very long to pay off, so if I apply my industrial capacity to convert raw materials into cargo bays, I also want to see some payment for my efforts. In my calculations, 1000 iron has the value of about 50.000 raw materials: 10.000 raw materials as input and 40.000 raw materials as compensation for my effort (loosing the industrial capacity of 40 industrial complexes for one turn). Please send me an email if you are interested in the model. Kind regards, AKO President M'bete, old friend. I have not heard from you in a while and was beginning to fear your star went nova. I am glad it did not! This is an exciting thread loaded with great potential for in-game enhancement. Your economists and those of the Ur-Lord should get together. Still honored One Fethra Just a regular Boo Soon to be Boo Governor of the Cebrionnes Co-Dominion Quote Link to comment Share on other sites More sharing options...
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