Suggestion for a Galactic Exchange Medium

[AKO]

Still Honored One Fethra,

Good to hear from you again, old friend, and I hope you are well in your retreat.

Ur Lord Tedric's economists and ours have shared our theories, and they are reviewing the benefits and drawbacks.

We also very much agree with Ur Lord on his position mentioned above. Calculating the cost of an item does not mean one has determined the selling price. That will be determined by supply and demand. It can help to negotiate a fair price though.

 

I have send my treatise to several empires. Others interested can drop us an email.

Sincere yours, Kasame

[Krelnett_of_Kraan]

We have been thinking much on this topic, and we think Tedric is heading generally toward the flowers, but missed the scent-markers.

Instead of using GRRE, we propose we use ICE, the Industrial Capacity Equivalent, instead. It would solve some inequities with the GRRE concept, and yet still be comparable for every race, regardless of technological level.

Allow us to illustrate: Under Tedric's system, food concentrates for a single ground combat unit costs g$2M, the same as the foodstuffs from which they are made. ICE takes into account all steps of the manufacturing process, yielding a value of ][2.25M, a small but significant difference. Similarly, ships are not merely the sum of their parts; their value must take into account the time spent assembling those components in a slip.

The more complex an item, the more its value in ][ differs from than in g$, accurately reflecting the difficulty of its construction. We thank you for your time and attention.

[Ur Lord Tedric]

We have been thinking much on this topic, and we think Tedric is heading generally toward the flowers, but missed the scent-markers.

Instead of using GRRE, we propose we use ICE, the Industrial Capacity Equivalent, instead. It would solve some inequities with the GRRE concept, and yet still be comparable for every race, regardless of technological level.

Allow us to illustrate: Under Tedric's system, food concentrates for a single ground combat unit costs g$2M, the same as the foodstuffs from which they are made. ICE takes into account all steps of the manufacturing process, yielding a value of ][2.25M, a small but significant difference. Similarly, ships are not merely the sum of their parts; their value must take into account the time spent assembling those components in a slip.

The more complex an item, the more its value in ][ differs from than in g$, accurately reflecting the difficulty of its construction. We thank you for your time and attention.

Oh scurrying Krelnett.....

 

We assure you that we have gone down the road of terribly over complex models and previously included, not only, the industrial capacity, but also the cost of energy......(which for shipyards is still unknown..... )

 

However, when it comes down to 'trade', we do think it is extremely unlikely that anything lower than Level 2/3 resources will be traded and normally only finished items.

 

It is most likely that everyone has a very similar infrastructure of their industry - something like 100,000 Stripmine Equivalents and 450,000 Industrial Complex Equivalents (we use 'equivalents' to take into account the effects of Improved or Advanced models, or Industrial Science advances).

 

Because of this it becomes possible to use a far simpler model. Using this model it only looks at the Raw Resource Equivalent value of items - thus the name.

 

What it does show to individual empires, however, is what their own economy yields in terms that are common. So whilst the costing system is the same, each item is worth a different percentage of each empire's economy.

 

For that reason, it shows easily that things like Mines and Mining Colonies, 'cheaper' power production, Improved and Advanced equipment, technical advances, etc - all show an increase in an empire's economic output.

 

From time to time economies may not be balanced for a particular reason, but, unless some massive stockpiling is going on, in general I suspect that most will be using their production and thus the model holds true....

 

We haven't had a lot of time this week, but will be able to get this little treatise done by the next cycle as promised....

 

But even then, it's done because it was asked for - you don't have to use it if it doesn't suit.......

 

Chief Trader to Ur-Lord Tedric

[Krelnett_of_Kraan]

What about the foodstuff/ food concentrate inequity? It throws off the calculated price by 12.5% We think that's a significant enough difference that industrial capacity must be taken into account. And, again, the price won't change just because we get 3g indusci, it simply means our economy is stronger and we can afford more.

The other up-side is that we can now determine exactly how much we can build by dividing our industrial capacity by the item's cost. No more slowly increasing the count by 5s until we go negative and then backing off.

...Umm... Everyone's spreadsheet does calculate overall industrial capacity, doesn't it?

[Krelnett_of_Kraan]

Oh, and we don't scurry, we buzz. Minor point, but it further illustrates the lack of attention to detail inherent in your model.

[Pig Skin]

Nice try in creating a price for items, but trade here is all about supply and demand. If the game had megacredts then maybe a price could be used but even then it is all about supply and demand which your modle does not take into account.

 

For example, MK2 Nuke Engines are totally worthless to me. They have absolutly no value. A large quantity of MK 3 total conversion engines is extremely valuable. I'd easily pay 10 million tons of anything I have to get just half a million tons of them.

 

-Pig Skin

[Krelnett_of_Kraan]

You misunderstand the purpose. ICE (or GRRE for that matter) merely provides a starting point for negotiations. They're also useful within your own empire when calculating the worth of certain operations. If you know it takes ][14 billion to set up a colony, but you'll only get ][5 million out of it per turn, is it worth it? How long until it pays for itself?

Without an economic model, you just don't know.

[Ur Lord Tedric]

What about the foodstuff/ food concentrate inequity? It throws off the calculated price by 12.5% We think that's a significant enough difference that industrial capacity must be taken into account. And, again, the price won't change just because we get 3g indusci, it simply means our economy is stronger and we can afford more.

The other up-side is that we can now determine exactly how much we can build by dividing our industrial capacity by the item's cost. No more slowly increasing the count by 5s until we go negative and then backing off.

...Umm... Everyone's spreadsheet does calculate overall industrial capacity, doesn't it?

Greetings oh vibrant Gnat!

 

If the calculated price was off by that much then we would certainly agree with you - but can't quite follow your maths???

 

Let us assume you want to make 50,000 Food Concentrates (a not unreasonable expectation). And you are making them from Raw Resources (which is what the model is based upon).

 

It would take 2,000,000 Raw Resources to make the 4 x 50,000 tons of the Meats/Grains/Water/Fruits & Veggies. That would take 8,000 IC Equivalents.

 

To then make the 200,000 tons of food bits into Foodstuffs takes another 800 IC Equiv's. To make the final step of converting the Foodstuffs into Food Concentrates takes then only a mere 200 IC Equiv's.

 

The additional 200 over the 8,800 that have gone before are only an extra 2.27%. Not insignificant, but not very much either.

 

But hey, why would you be trading Food Concentrates when you could just deliver Imperial Guards Heavy Armour in just 10,000 tons of space?

 

The whole point of the simplicity of the model is that it determines a 'common' value that is easy to determine. Whilst everyone is assumed to have a broadly similar industrial base, the actual value to any particular empire would depend on available yields that they can exploit, their power generation ability and any advances they have achieved.

 

We are assuming, not unreasonably we think, that any advances empires achieve, or mining colonies they set up, are used to then increase their empire's economic base. The 'cost' of producing any particular item to that empire then decreases over time - but they remain in the same relation to each other.

 

And, when it all comes down to it, this 'costing' is only the starting point, perhaps, for negotiation. Individual empires can make whatever arrangements they so wish. At least one of the parties may be able to assess the 'profit' the other is making and then deciding whether the trade is 'worth' it.

 

As a final note, before I settle down to producing the treatise next week, the model only truly works if you need to make items to sell from Raw Resources. If you have such a fabulous Crystal Yield, or indeed several, that you cannot possibly use all the Crystals produced, then that empire should certainly try and sell items that are high in electronics - they would increase their economy by a far larger extent...

 

Oh, trade is certainly a viable option in this game......

 

Chief Trader to Ur-Lord Tedric

[Krelnett_of_Kraan]

There seems to be a miscommunication. ICE is based off the tonnage of industrial capacity used, not the number of ICs. As we all know, the number of ICs required for a given job changes as industrial technology improves, but the sheer input tonnage never does.

You say it requires only 30 tons of raw resources to build one ton of steel. We agree, but because it requires 33 tons of industrial input, the steel must have a higher 'price' than the 3 tons of iron on which it is based. Higher-level materials are consequently even more costly: Electronics costs ][102, but only g$90. A more extreme example is the Mk I Jump Survey Sensor, which requires 1.95M tons of raw resources, and so in your model is no more costly than the crystals, gases, petro- and industrial chemicals that make it up. However, it takes 2.23M tons of industrial capacity to create it from start to finish; a misrepresentation of its value of over 12%.

Also, we see the model as effective for high yield worlds as for low yield. The value of the item does not change, it is simply that your world produces ][99,220 worth of crystals (as an example) every turn, so you can build your electronics cheaper.

[Ur Lord Tedric]

There seems to be a miscommunication. ICE is based off the tonnage of industrial capacity used, not the number of ICs. As we all know, the number of ICs required for a given job changes as industrial technology improves, but the sheer input tonnage never does.

You say it requires only 30 tons of raw resources to build one ton of steel. We agree, but because it requires 33 tons of industrial input, the steel must have a higher 'price' than the 3 tons of iron on which it is based. Higher-level materials are consequently even more costly: Electronics costs ][102, but only g$90. A more extreme example is the Mk I Jump Survey Sensor, which requires 1.95M tons of raw resources, and so in your model is no more costly than the crystals, gases, petro- and industrial chemicals that make it up. However, it takes 2.23M tons of industrial capacity to create it from start to finish; a misrepresentation of its value of over 12%.

Also, we see the model as effective for high yield worlds as for low yield. The value of the item does not change, it is simply that your world produces ][99,220 worth of crystals (as an example) every turn, so you can build your electronics cheaper.

Oh scurrying, running, crawling, scampering, vibrating, buzzing, Krelnett

 

The miscommunication is only that your ICE and my IC Equivalent are not the same thing. Our IC Equiv comes straight from my spreadsheet that calculates how many Basic IC's in need to build what the rest of the spreadsheet calculates. Other parts of the spreadsheet calculate how many IC Equiv's we have (which takes into account Improved/Advanced and also Ind Sci techs achieved). It also, BTW, does indeed show what surplus we have available, which is matched against the extra SM Equiv's we have.

 

The rest of your post, however, proves that we are on exactly the same track. We have no problem with the additional complexity of your model, and would happily agree that it may be a more 'accurate' representation. However, the point we're trying to show is that the additional complexity is the same for every resource. It is the relative value to each other that matters and that doesn't appear to change between the models.

 

If that is accepted, then there's no reason to keep the model much simpler, and that's what we suggest.

 

As we said, and you have affirmed, individual economies will determine the relative value of certain items to that empire, but we'd be very surprised to find that most industrial set-ups are not broadly similar.....

 

And as regards your point about determining the cost of investment in new industry/mines, then the relative costs between items still holds, even in the simpler model. The underlying assumption, however, is that you're using your capacity to build something - if you're not, then it doesn't make any difference at all......we'd be surprised if that was the case....

 

Chief Trader to Ur-Lord Tedric

[Krelnett_of_Kraan]

Ah, we see. Yes, the relative costs remain equal in ALMOST every case, for items of the same "level"

Where we see the discrepancy is that your model assigns the same value to base iron that it does to refined steel or cargo bays. We find worth in the work done by our drones, not merely the materials upon which they perform said work.

And then there are food concentrates, where the relative value isn't the same at all.

[Ur Lord Tedric]

Ah, we see. Yes, the relative costs remain equal in ALMOST every case, for items of the same "level"

Where we see the discrepancy is that your model assigns the same value to base iron that it does to refined steel or cargo bays. We find worth in the work done by our drones, not merely the materials upon which they perform said work.

And then there are food concentrates, where the relative value isn't the same at all.

Yes indeed oh industrious one!

 

As we originally postulated and indeed you agreed - it's true for things at the same level. Gievn that we are suggesting that it's only built items that are traded, apart from special circumstances when we are sure trade will be unequal anyway, then it does all indeed come out in the wash.....

 

Forward the G$.......

 

Chief Trader to Ur-Lord Tedric

[Ur Lord Tedric]

I've finished the first draft and deliberately kept it nice and simple....

 

Here's the text....

 

If anyone would like to comment and ask me to add anything to it, please let me know?

 

If not I'll send it to Russ and ask that he attach it to this thread and perhaps put it in the RTG download area.

 

If anyone wants an up front copy before then, please just drop me a line to StarLeague9@aol.com and I'll relpy with it attached..

 

Mx

 

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The Galactic Raw Resource Equivalent – GRRE – G$

 

A Suggestion for a Common Base for Trade and Economic Calculations

 

 

Background

 

We have seen a number of models that calculate the ‘cost’ of making items/resources in the game so far and nearly all have a logical basis. In various ways they have tried to include the effects of the various steps needed to produce the items, the power requirements and the ever more complex variable introduced when empire deviate from simple Stripmines and Industrial Complexes, into Colony Mines, Improved and Advanced ICs/SMs, and the effect of Industrial Science breakthroughs. However, we realised that all these models assume that you are effectively ‘investing’ from scratch, which tends not to be the case. With very few exceptions, we believe, empires are set up to produce resources and items in similar ways. On that basis, one is merely swapping one sort of production for another and it is all relative. This certainly applies to any desire to trade, when one is normally arranging to effectively trade-off production ability, but with items that an empire cannot produce for itself.

 

On this basis it is possible to reduce the model to one based upon the lowest common denominator – the Raw Resource….

 

Basis

 

The basis for the model is very simple. It merely assigns a value to any item based upon the number of Raw Resources (RRs) it would take to build that item assuming that all you have available were SMs to make the RRs and ICs to convert them through the various stages to get to the finished item. Because it is assumed everyone has sufficient industry to do just that, then the model will work for comparing the cost between items on that, very simple, basis.

 

What this achieves is a comparative value expressed as a number of GRREs or G$’s.

 

What the model does not do is change the ‘cost’ of making any item with the effect of Mines, Improved or Advanced production facilities, or production bonuses. It is assumed that when an empire gains such things it produced a net increase in the economic output of any particular empires. Thus the cost of producing any particular item goes down relative to another empire with a smaller economy.

 

In addition, the model shows no effect from whether the items are made from Improved or Advanced resources. Any such disparity would be reflected in the actual trade negotiation between the parties concerned. The ‘cost’ of production doesn’t actually change, however.

 

Costs

 

Whilst it is possible to fairly easily work out the costs of items from first principles, it is suggested that the simple Level 2/3 resources that appear in the ANZs of items are used. These then have the following values (Improved and Advanced versions too):

 

 

(Level 1) Iron, Lumber, Light Metals, Petrochemicals, Gaseous Elements, Industrial Chemicals, Crystals, Radioactive Elements, Grains, Meats, Water, Fruits & Vegetables, Fibers, Coal, Precious Metals, Gem Stones, Rare Elements, Rare Herbs & Spices, Mineral Fertilizers, Caldaran Crystals, Garoxx Jewels, Jinn Crystals, Ghuran Demonblood, Shenn Stones, & Tritantantalum - G$10

 

(Level 2) Steel, Timber, Transaluminium, Petroleum, Fuel, Synthetic Materials, Refined Crystals, Processed Radioactives, Textiles, Pharmaceuticals, Luxury Goods, Plantfoods & Weapons – G$30

 

Food Concentrates – G$40

 

Consumer Goods – G$50

 

Black Market Goods – G$70

 

Construction Materials, Heavy Machinery & Electronics - $90

 

Results

 

There are some interesting consequences of this approach. Many will have noticed that nearly all ship items are produced on a 5:1 basis. Those that contain Level 1 resources are consequently ‘cheaper’ than others, and those that contain high a percentage of Electronics are more ‘expensive’ than others on a ton for ton basis.

 

Examples

 

A few examples may illustrate the results of this costing:

 

Mk I Computer – 500 Electronics – G$45,000

Mk II Jump survey Sensor – 20,000 Electronics, 5,000 Synth Mats – G$1,950,000

10cm Autocannon – 400 Steel, 100 Electronics – G$21,000

Mk I NJD – 100 Steel, 100 Electronics, 100 Synth Mats, 100 Proc Rads, 100 Rare Elements – G$19,000

Mk I Force Shield – 200 Transaluminium, 100 Electronics, 100 Synth Mats, 100 Rare Elements – G$19,000

NTWD – 250 Mk I NJD, 250 Mk I Force Shield, 25,000 ImpElectronics, 25,000 Imp Synth Mats, 25,000 Adv Fuel – G$13,250,000

 

Economy

 

It is also possible to gauge the size of your economy and the value of mining colonies, as well as the effect of such things as Orbital Crystal Refineries, the Fuel Installations, etc. Simply add up the values of the Raw Resources and Level 1 & 2 Resources produced and multiply by the appropriate cost as above.

 

At the very start (since single pop gp’s were introduced) everyone’s economy was the same as we all had 85,000 SMs. They produced 85M RRs and therefore the economy was worth G$85M. However, as soon as mines were established on the HW and CMs were moved around to everyone’s satisfaction, then this will have jumped straight over G$100M, and probably higher.

 

Summary

 

This model is now submitted to the galaxy at large to use as you will. It has the virtue of being very simple – it even fits on just two pages!!!

[Clan Elder 'Keen]

"There are some interesting consequences of this approach. Many will have noticed that nearly all ship items are produced on a 5:1 basis. Those that contain Level 1 resources are consequently ‘cheaper’ than others, and those that contain high percentages are more ‘expensive’ than others on a ton for ton basis."

 

 

When you say "and those that contain higher percentages", what are you refering to? If you are refereing to Level 1 resources, it should read "lower percentages". If you are refering to something else, could you clarify?

[EternusIV]

I agree that 'supply and demand' still applies....

 

But considering that raw resources can be sued to make anything (tech is the only contraint)....it stands to reason that an intrinsic resource-value system is appropriate.

 

The only catch is this - if the Beulah Trading Company are the only ones with Matter Transporters in the game, they might refuse to sell their wares for the standard Ur-Lord Tedric Book Price.

 

Of course...how do we KNOW that the Beulah Trading Company is the only empire with Matter Transporters? Etc. (I don't have them, yet BTW....but does anyone else have -ALL- the Advanced Goods?)

 

Anyway - I think the direction UL Tedric is taking it is a good one!