Inflation in the Sim - Suggestion to help it

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Biff Tannen
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Inflation in the Sim - Suggestion to help it

Post by Biff Tannen » 3 months ago

Simsters,

Disclaimer - These are just my opinions, brainstorms, and suggestions based on assumptions. It is highly speculative. In no way am I suggesting this is a problem. Feel free to pick it apart.

I'm an old timer in this game. I left and came back after a few years. This game is still as awesome, frustrating, fun, and rewarding as I remember it. Thank goodness my account was still active. I had about $9M in my account. Kudos to everybody and how much it's grown!

After returning I noticed Simflation (and removing money from the game) is still something that comes up. Not surprising considering the scope of the game.

Please let me break this down.

The Problem - Money enters the system daily causing inflation.
Goal - Regulate Inflation in the Sim to ~2%, which is the norm.

Comparatively, this is similar to the Fed Reserve loaning money at 0% to banks. This means cash is free or really cheap to borrow. When cash is free, it floods the economy. When cash supply increases, so does inflation. For example, you have $10 and I'm selling trinkets for $1.00. I have 10 trinkets. Suddenly, you get $100 out of nowhere. $1.00 seems cheap now to you so you buy all 10 for $10.00. On my next order, I only get 5 trinkets, but I now know you're flushed with cash and I'm low on supply. So the price goes to $2.00 each instead of $1.00. Got it? Ok good.

How do gov'ts avoid this?
Clearly, they push their interest rate up when the economy is good, therefore making money cost something. Just think, in the 90's my first car loan was at 8.75% and that was a pretty good rate with good credit! Today, my most recent car loan was 1.5%. Since 2001, we've gone through some tough economic times. To avoid a recession, the Fed lowers interest rates to increase the amount of money available to all companies and people, thus creating spending.

The Sim is it's own economy, but understandably it doesn't charge interest for new players to get money nor does it make loans. Basically, if the Sim was a bank, they're giving away money at 0% interest every time anew player signs up. Free money.

Believe it or not, there's a few countries in Europe and Asia that are at this point in their economy. If your an American and it sounds familiar, then yes it's happening here as well.

What happens when a Gov't reaches 0% interest then? How does it curve inflation before the economy collapses or the money becomes worthless?

The easiest answer is to take money out of the economy.

I created an excel calculator but I can't upload it here, but in short we could essentially calculate the percent of inflation and then make adjustments to the Sim Economy from there.

Here's the initial calcs that I think would help (I likely missed something here but clearly this isn't something that can be solved in 1 day). They're set up using Algebra (Sorry if I'm giving you flashbacks to high school). Also, I did not double check my math because I'm a scumbag like that sometimes.

A = Total Money in the Sim (Player's Balances)
B = Total Money in New Player Sign Ups - Amount of New Player Sign Ups X $100,000 each.
C = Total Daily Purses from Races
D = Total Player Expenditures (going into the Sim, not another player)

E = To Calculate Daily Inflation Percent = ((B+C) - D) / (A+B+C) = Daily Inflation
F = To Calculate Ratio of Expenditures to Inflation = (D/(A+B+C))/ E
G = Difference = F*E
The difference is the net inflation % that comes into the Sim daily.

From there, we have a few options that adjust daily and might help inflation.

1) Decrease all purses by G% or fraction of it. This removes some inflation daily from the purses. It doesn't matter if you split 0 or 100 races. The calc always takes into account the new money being minted and then tries to deduct it daily from the purses itself. Clearly, this would not be popular. The $867,458 Santa Anita Derby doesn't sound quite right.

2) Increase all Player Expenditures by G% or fraction of it. This could be for money going to the Sim or a G% amount added to every player to player transaction, which then funnels to the Sim. This is no different than going to store and finding out that ground beef now cost $9.99/lb. As money supply increase, so does the cost of all goods. That is literally inflation, but it removes G% out of the Sim Economy daily to keep the money supply constant and even, thus controlling inflation. So for example, a farm might cost $2M today but if inflation is huge tomorrow, then the price might go to $2.3M instead. It might go down or up daily just like a commodity. As a bonus, this also encourages Simsters to spend money when the time is right.

3) Charge G% or fraction of it for Player Balances. Ok. Ok. Please put your pitchforks down lol. Earlier, I mentioned that countries in Europe and Asia are at 0% interest. This is actually a strategy they use to take money out of the economy. Basically, bank accounts are not free. If you leave money in a bank, they take a percentage of it back to decrease the money supply. When money is decreased, inflation usually goes down. Bonus - This encourages Simsters to spend instead of holding their money.

4) If the Sim Economy is already too bloated than make the percentages greater than G% temporarily. This would encourage a few things:

Player Spending on Assets like farms, reports, etc.
Players over Spending on Assets
Players looking to unload cash asap into other assets.

The end result should be:
Decrease in money supply, thus decreasing inflation
At some point, the Sim Economy should reach equilibrium (assuming the math is accurate).
It could be adjusted accordingly when necessary.

You could also increase the amount of money a new player receives upon signing up because the inflation is then re-calculated into the game and then subtracted accordingly. I know this sounds counter intuitive, but it allows new players to get a better foothold (though IDK if this is necessary...I see some NPs doing better than I am money wise lol). By increase, I mean like to $250k or something like that, not millions. They'll need it anyways since there's inflation adjustments and more expenses.

What about GPs? GPs are like another currency so to speak, so the exchange rate is likely impacted by G% as well. There could be a G% surcharge on exchange or it could be added into the calcs to account for how much money is being added to the Sim Economy.

Either way, the G% can be adjusted to make inflation whatever percentage is comfortable for the game. The growth would be based on the game's population...which is a whole nother conversation lol.

Anyways. Thanks for reading! Happy Racing All.

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Rochelle Zahacy
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Re: Inflation in the Sim - Suggestion to help it

Post by Rochelle Zahacy » 3 months ago

This went well over my head! What I understood:

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Louise Bayou
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Re: Inflation in the Sim - Suggestion to help it

Post by Louise Bayou » 3 months ago

This is a fake horse game can we just stop trying to make it ....never mind. smh
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Keith Maidlow
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Re: Inflation in the Sim - Suggestion to help it

Post by Keith Maidlow » 3 months ago

I'm a numbers guy but not necessarily an economics guy, though I do like money real and fake. There have been quite a number of attempts to take money out of the game. Some seemed simple but caused players to quit because of the size of their stables. Others, like Steward breds, have taken large sums of money out of the game but still not enough to bring balance between players. Like real life, the rich usually get richer and the poor struggle.

Now that Steward breds are not going to be part of the SIM going forward, owners need only enough money to keep their stables running (running includes racing, breeding and daily upkeep). So for a small stable like mine that just races with no breeding operation, a million dollars is plenty. But for even the largest stables, 10's of millions is probably sufficient and $100 million is bragging rights.

The biggest disadvantage for non-breeders is that there will probably be no stakes or freaks on the sales page that we can draw our racing stable from, quality mares to breed to will be at a premium and we will be forced to find other ways to succeed in the SIM. Players who have millions worked hard for that money and deserve to keep it.

I still enjoy the SIM just the way it is. The game may have passed me by a bit, but I still have some guns loaded for the next several SIM years. I have adjusted my game play and will continue to do so going forward.

The Steward could give anyone with < $1.5 million (i.e. me) a stimulus check that wouldn't take any money out of the SIM but would make my account look better.

Anyhow, thanks for the econ lesson!
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Alleyne Torres
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Re: Inflation in the Sim - Suggestion to help it

Post by Alleyne Torres » 3 months ago

All I have in life is my fake money.
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Kelly L Haggerty
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Re: Inflation in the Sim - Suggestion to help it

Post by Kelly L Haggerty » 3 months ago

Ok, I am a macroeconomics and finance person so I will bite. I wrote an article on the missing left-hand tail of the horse distribution. This is a related topic so taking it into account might be useful. Also, there are ways we can channel ol' Pigou and implement a t....bring about a system of..I can't bring myself to say it. But yeah, could work and do so in a way that would not be detrimental to new players and game growth.

PS-
For all the normal human being out there that don't sit around and think about this, Pigou was a college professor that once requested to be wheeled into faculty staff meetings posthumously. Apparently this guy was so dull that not only could he not get a life, he didn't plan to get an afterlife, either. But he wrote some kick-ass stuff about taxes.

Trastevere Peru
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Re: Inflation in the Sim - Suggestion to help it

Post by Trastevere Peru » 3 months ago

What a nice economics lesson¡¡¡
I'm a physician and until now I didn't understand the inflation theory and in my Fake Horses Game I got it.
Congrats BT and thanks again.
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Danny Derby
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Re: Inflation in the Sim - Suggestion to help it

Post by Danny Derby » 3 months ago

Nothing makes the game more fun than economy lessons and taxes. Hope we can get political parties and some kind of prison system added as features for 9.0

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Dan Kauffman
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Re: Inflation in the Sim - Suggestion to help it

Post by Dan Kauffman » 3 months ago

A prison system? Just make a bunch of sanctuary cities, defund the police and let everything be a free-for-all.
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Kelly L Haggerty
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Re: Inflation in the Sim - Suggestion to help it

Post by Kelly L Haggerty » 3 months ago

Danny Derby wrote:
3 months ago
Nothing makes the game more fun than economy lessons and taxes. Hope we can get political parties and some kind of prison system added as features for 9.0
:lol:

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Kelly L Haggerty
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Re: Inflation in the Sim - Suggestion to help it

Post by Kelly L Haggerty » 3 months ago

One more comment. There is inflation, but there is also a great deal of "charitable giving". I'm 2 months in and have had a lot of help. I don't really find it a struggle to build a competitive racing barn. Getting great mares is probably hard for newer players that try to stand stallions and need a bunch of them, but there are ways around that.

Gwen Morse
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Re: Inflation in the Sim - Suggestion to help it

Post by Gwen Morse » 3 months ago

Dan Kauffman wrote:
3 months ago
A prison system? Just make a bunch of sanctuary cities, defund the police and let everything be a free-for-all.
Add in jousting/mounted combat and we have a use for unsuccessful horses.

Gwen Morse
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Re: Inflation in the Sim - Suggestion to help it

Post by Gwen Morse » 3 months ago

Kelly L Haggerty wrote:
3 months ago
Ok, I am a macroeconomics and finance person so I will bite.
Please write more articles about the economic side of the sim!!!! I have a past history in game design but I don't have any real world economics training.

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Laura Ferguson
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Re: Inflation in the Sim - Suggestion to help it

Post by Laura Ferguson » 3 months ago

I majored in econ in college, so I've enjoyed this thread.

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Kelly L Haggerty
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Re: Inflation in the Sim - Suggestion to help it

Post by Kelly L Haggerty » 3 months ago

Gwen Morse wrote:
3 months ago
Kelly L Haggerty wrote:
3 months ago
Ok, I am a macroeconomics and finance person so I will bite.
Please write more articles about the economic side of the sim!!!! I have a past history in game design but I don't have any real world economics training.
I've been afraid everyone would start hating on me. Showing up and one month in discussing theoretical taxes could be bad for one's popularity. Then again, discussing taxes at all usually doesn't lead to many party invites. :geek: I'll get inspired and type up a little something at some point, just for kicks not as a real proposal.

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