Trading -- Equal Value vs 2:1 All the Way Up

[DeletedUser26965]

For example, trading up from Industrial to Progressive, the 'Fair Trade' ratios seem to underestimate the value of the Progressive goods, in part due to the need for 2 lane roads makes them especially big in comparison.

Right, that's what I said, whether it's 2ln roads or the size of the building or needing more population and happiness the question becomes in any case what value do you place on a 1x1 tile? The Stone Mason is 16sqft all the other BA goods buildings are 9sqft so right from the start there is an asymmetry, in other words not equal or fair because the stone guy gets less space than the lumber guy. Supplies costs the same, coins cost the same, time costs the same, but what of the tile space?

The question of this symmetry or fairness or equality we are apparently looking for gets even muddier like I said when you consider goods gb's and special buildings. What is the value of my 5 TE goods produced by the 6sqft Kiosk? Or the 200 TE goods I win in GE?

That's always the same problem every time this issue comes up.

 

[DeletedUser25273]

Goods are fungible, so there source shouldn't matter to their real absolute value, but how YOU get your goods affects your costs, and thus how you value them. This just goes to show that the REAL 'Fair Market Value' isn't really a single number, but really does vary person to person.

 

[DeletedUser13838]

The Equal Value ratios may be reasonable in many conditions, but are in no way perfect. For example, trading up from Industrial to Progressive, the 'Fair Trade' ratios seem to underestimate the value of the Progressive goods, in part due to the need for 2 lane roads makes them especially big in comparison.

Thinking about the value of goods in terms of relative space misses the point since you're only going to produce goods that you are boosted for. You might decide to produce goods with the smallest building but that leads to artificial gluts and shortages in supply. If you're unlucky to only have boosts in the larger buildings you're still going to produce them. The most important resource is time. Why spend 8 hours producing 10 glass if you can make 20 brass in the same amount of time? The production cost is double so by fair trade standards your 10 brass is worth 20 glass and if you really wanted glass you could trade the glass and essentially have 20 glass in 8 hours. Even if you can only get 19 glass via the market, you're still better off.

I would love to put a bid in for goods or ask a price for goods and let there be a stock market that way, but that's not the trading system we have.

There is a stock market but only in the sense of a barter economy. It might be more interesting to introduce another resource strictly for the trading of goods. Otherwise we'll be stuck with 20 exchange rates within each age and 25 between ages. I've made several proposals on ways to change the market (and in fact make it more like the stock market - eg partial fills). None of them went anywhere so I don't expect anything to change.

 

[DeletedUser27096]

Fair trade means only if you and the person you are trading with find the deal fair, that's it, end of story.

I don't know what you mean by "equal-value convention", if you mean trying to figure out if a trade is "equal"/fair then refer to my first sentence.

However if you must insist, the closest thing to equal/fair trade is in the early ages when buildings are the same size, different size buildings means attempting to put some sort of value on space but what is the value of a 1x1 tile? Then CA and beyond gets really messy. Then considering gb's/special buildings make goods makes it even messier. How do account for value in those regarding goods in a trade?

Isn't it just easier to use supply/demand theory (as you mentioned in your opening sentence)? Then you don't have to go through a bunch of complex calculations. If I really need something, I will usually try to make my offer attractive by offering same age goods at 1.2 to 1. If I want to replenish but don't desperately need the good, I'll usually offer same age goods at 1:1. If I can only trade higher age goods for what I desperately need, I try to stick to between 1.5 and 2 to 1. I don't care about what it costs me to make and how many spaces the building takes up. Once I place a building and start producing, those are sunk costs and (if you follow economic theory) should not be taken into consideration. See, easy peasy !

 

[DeletedUser26154]

When trading across ages, what do people feel about the equal-value convention versus 2:1 per age all the way up?

The numbers would be astounding.

Based on 24-hour collection time.
Here are the costs in Coins and Supplies as they stand now.

Bronze age: 400/400
Iron age: 800/800
Early middle ages: 1600/1600
High middle ages: 3200/3200
Late middle ages: 6400/6400
Colonial age: 9600/9600
Industrial age: 12800/12800
Progressive Era: 16000/16000
Modern Era: 19200/19200
Postmodern Era: 24000/24000
Contemporary Era: 28800/28800
Tomorrow: 33600/33600
The Future: 40000/40000
Arctic Future: 46800/46800

Now let's double as suggested.
To scale for new trade system.

Bronze age: 400/400
Iron age: 800/800
Early middle ages: 1600/1600
High middle ages: 3200/3200
Late middle ages: 6400/6400
Colonial age: 12800/12800
Industrial age: 25600/25600
Progressive Era: 51200/51200
Modern Era: 102400/102400
Postmodern Era: 204800/204800
Contemporary Era: 409600/409600
Tomorrow: 819200/819200
The Future: 1638400/1638400
Arctic Future: 3276800/3276800

Three million, two hundred and seventy-six thousand, eight hundred coins, and supplies for one AF 24-hour goods production.

Trading according to this scale of comparison would not work.

 

[DeletedUser26965]

Isn't it just easier to use supply/demand theory (as you mentioned in your opening sentence)? Then you don't have to go through a bunch of complex calculations. If I really need something, I will usually try to make my offer attractive by offering same age goods at 1.2 to 1. If I want to replenish but don't desperately need the good, I'll usually offer same age goods at 1:1. If I can only trade higher age goods for what I desperately need, I try to stick to between 1.5 and 2 to 1. I don't care about what it costs me to make and how many spaces the building takes up. Once I place a building and start producing, those are sunk costs and (if you follow economic theory) should not be taken into consideration. See, easy peasy !

Sure, do the deal whatever your considerations. However, as old as time itself, people attempt to ascertain the value with many variables as I'm sure you know. One might consider the cost of the building as a sunk cost but I'm not so sure considering the cost of time, supplies and coins to make goods as a sunk cost would be the wisest thing or else it would seem when bartering my BA goods are as valuable as your AF goods and you shouldn't mind trading those goods to me.

Regardless that is the measure; coins and supplies cost per good and many a FoE player considers such trades based on that measure as fair and some guilds bide by that, other guilds do 2:1 up one age, 1:1 across, 1:2 down one age, through all ages despite the c/s cost or any other cost for that matter. If I'm forced to say which of those two is more fair then clearly the c/s measure is the choice.

 

[DeletedUser8152]

Once I place a building and start producing, those are sunk costs and (if you follow economic theory) should not be taken into consideration.

I'm not so familiar with that economic theory... cost of investment is usually an important financial consideration.

 

[DeletedUser27096]

Yes, the cost before you make a decision, however once the cost has been paid, it is no longer relevant as it is unrecoverable". So before you build a goods building, you may consider the soundness of the investment using cost per square or per population or some other algorithm but once you've spent the money to build it, you can't recover it (okay, Inno makes it possible to recover some of it but this is economic theory, dang it; ceteris paribus and all that esoteric crap).

That said, you could possibly argue that you could try to recoup some of your investment via pricing of your goods or services, however, that strategy is unsound because the market will only pay what it feels your product is worth so you may or may not be successful in recouping some of your fixed investment.

Take that University of Chicago !

 

[DeletedUser27096]

Sure, do the deal whatever your considerations. However, as old as time itself, people attempt to ascertain the value with many variables as I'm sure you know. One might consider the cost of the building as a sunk cost but I'm not so sure considering the cost of time, supplies and coins to make goods as a sunk cost would be the wisest thing or else it would seem when bartering my BA goods are as valuable as your AF goods and you shouldn't mind trading those goods to me.

Regardless that is the measure; coins and supplies cost per good and many a FoE player considers such trades based on that measure as fair and some guilds bide by that, other guilds do 2:1 up one age, 1:1 across, 1:2 down one age, through all ages despite the c/s cost or any other cost for that matter. If I'm forced to say which of those two is more fair then clearly the c/s measure is the choice.

I hear you, SJS, and I totally agree with you about the ratios considering the age of the goods, moreso because a later age player has little need for the earlier age player's goods and vice versa (somewhat...I'm not considering people who might want to stockpile late age goods for the future or for profit). As in all economic theory though, a lot of it is based on an ivory tower "perfect world" which doesn't always hold up in the real world (and hence why behavioral economics was born). I still stand by our earlier position, though, in that one's goods are worth whatever another player will pay for them, regardless of sunk costs, time and coins to produce, etc.

 

[DeletedUser26965]

I still stand by our earlier position, though, in that one's goods are worth whatever another player will pay for them, regardless of sunk costs, time and coins to produce, etc.

Yes, that is the only rational position.

 

[DeletedUser13838]

Yes, the cost before you make a decision, however once the cost has been paid, it is no longer relevant as it is unrecoverable". So before you build a goods building, you may consider the soundness of the investment using cost per square or per population or some other algorithm but once you've spent the money to build it, you can't recover it (okay, Inno makes it possible to recover some of it but this is economic theory, dang it; ceteris paribus and all that esoteric crap).

That said, you could possibly argue that you could try to recoup some of your investment via pricing of your goods or services, however, that strategy is unsound because the market will only pay what it feels your product is worth so you may or may not be successful in recouping some of your fixed investment.

Take that University of Chicago !

Well, marginal cost = marginal revenue is really just the condition for profit maximization (technically it's just a condition for "stationarity" but whatever). But this concept really goes out the window in our case since there's no way to convert from goods to supplies/coins so no way to define profit in those terms.

 

[DeletedUser27096]

Well, marginal cost = marginal revenue is really just the condition for profit maximization (technically it's just a condition for "stationarity" but whatever). But this concept really goes out the window in our case since there's no way to convert from goods to supplies/coins so no way to define profit in those terms.

You, Sir Konrad, are an economics master...I bow to your superior knowledge of the subject (Whatever I know is what I can remember from Microeconomics and Pricing Theory which I took 23 years ago) !

 

[DeletedUser27096]

A fundamental principle of economics is that if you force an exchange rate that doesn't match what people really feel, you will create a scarcity of the undervalued item. If, for example a guild forced a 2:1 ratio of LMA:Colonial, while most people felt the 1.5:1 ratio was closer to fair, would tend to find few people offering LMA goods for Colonial, and people offering Colonial Goods for LMA would likely find their trades taking longer than normal to get accepted. Some trade would still occur, as different people, in different circumstances do have differing values, and there will be some people with LMA goods with a strong need for the Colonial goods (or a sense of egalitarianism willing to be helpful) to make the trades at those ratio.

The Equal Value ratios may be reasonable in many conditions, but are in no way perfect. For example, trading up from Industrial to Progressive, the 'Fair Trade' ratios seem to underestimate the value of the Progressive goods, in part due to the need for 2 lane roads makes them especially big in comparison.

At lower ages, the fair trade ratios seem real close to what would generally be considered a good ratio, and establish a reasonable baseline for trade. I think the real idea that started behind the concept of Fair Trade, was to exclude those doing predatory trades,like 1:1 going up an age of 2:1 going up a couple, not with the idea that the ratio was 'fair', but hoping someone doesn't notice that it is a really bad deal. Others seem to object to the concept that someone might be able to profit from the needs of others, doing something like offering at a slight markup goods that seem to be scarce.

Interesting and well put. My perspective is from the lower ages (I'm in LMA) but my perspective could change once I reach the higher ages with their unique restraints and requirements.

 

[DeletedUser27096]

Agreed, with the one exception of taking advantage of n00bs.

Hey!! I resemble that statement! Thanks a lot buddy !

 

[DeletedUser26579]

Yes, the cost before you make a decision, however once the cost has been paid, it is no longer relevant as it is unrecoverable". So before you build a goods building, you may consider the soundness of the investment using cost per square or per population or some other algorithm but once you've spent the money to build it, you can't recover it (okay, Inno makes it possible to recover some of it but this is economic theory, dang it; ceteris paribus and all that esoteric crap).

That said, you could possibly argue that you could try to recoup some of your investment via pricing of your goods or services, however, that strategy is unsound because the market will only pay what it feels your product is worth so you may or may not be successful in recouping some of your fixed investment.

Take that University of Chicago !

I would like to point out that the land is very much recoverable. People rip up buildings and use that land for something more efficient all the time (both in game and in real life). So, the cost of a tile is *not* a sunk cost.

To be more explicit, I can always rip up a lower-age goods production building and put in a higher-age goods production building, so the amount of land the respective buildings take up should be a valid consideration in that decision.

The supplies and coin for building the goods production building is a sunk cost, however. (Well, a portion of it, anyway, since some of it can be reclaimed too, but not all of it.)

 

[DeletedUser27096]

True, but again, your goods are only worth what someone else will pay for them and I'm not sure other players take into account that your goods are more valuable bc the building takes up a larger space. Some of that logic will be a given since presumably those goods will be more scarce, however, I'd be surprised to hear that many people realize this and, in turn, are willing to accept lower trade ratios because of it.

 

[DeletedUser8152]

True, but again, your goods are only worth what someone else will pay for them and I'm not sure other players take into account that your goods are more valuable bc the building takes up a larger space. Some of that logic will be a given since presumably those goods will be more scarce, however, I'd be surprised to hear that many people realize this and, in turn, are willing to accept lower trade ratios because of it.

They will accept it if that is the best rate they can find

 

[DeletedUser27096]

Yep, that's supply and demand plus scarcity of resources. People will only pay an unbalanced price until they can find another source or substitute. In this case, if the player who needs the scarce resource finds that the trades for that item are consistently disadvantageous, he or she will likely attempt to find someone to do direct deals with. The market should eventually correct itself (if the in-game market is viewed as an efficient market system) since bad offers will just not be taken and will eventually expire.

 

[DeletedUser25273]

Also, if a good starts to demand a premium over 'Standard' rates, some people who might be able to produce some/more of it might do so, increasing supply.

 

[sirblu]

There are conventions -- they are baked into online "fair trade" calculators and described on the wiki.

Regardless of whether or not you agree that they are "fair", those conventions exist.

Does anyone have a link to the Trade Calculators they would like to share?