To add to the EVE comment above, it’s interesting that what you describe in terms of resource allocation across the world-space is exactly what drives much of the gameplay in EVE. According to Dr. Gundmunsson they deliberately distributed resources needed for various crafting systems across the world, such that the creation of X specific item requires resources from vastly separated regions of the galaxy — stimulating trade.

What Vicente’s point above illustrates is the need for a strong metrics system (a technology tool) in conjunction with the steady economics hand on the design wheel.

The sequel title ‘Supreme Ruler 2020′ simulates the entire world at once, so the commodity system is closed. If most of the Uranium or Oil exporters turn off the pumps, then the availability of those commodities becomes limited and the prices go through the roof. This version uses more of a central ‘futures market’ approach (meaning that each day has a set buy/sell price that changes according to market conditions), though players can buypass the markets and make deals with individual countries directly. The whole system works great and is really cool to play on. Since the game has 11 commodities and there are some subtle commodity relationships, it adds a whole new element. (For example, electricity can be produced by hydro dams, or oil fired power plants, or nuclear plants using uranium, etc. Finished good like Consumer goods require a number of raw material inputs, but they allow producers to make a profit selling those goods if the markets are strong for them, etc).

I think these games get the closest to ‘real world’ economics of anything I’ve seen.

As for how a game market should be setup I believe the guild/crafting system in place in most games is best; with an auction house for the materials and the final product. This allows for the best flow of information between both producers and consumers. The best example I know of this was ffxi. However it also has its problems, items that were player specific jumbled the market every time one was released. But the market was successful and did work. On the weekends demand went up and the price of most finished goods went up.

What was most interesting about the market in ffxi is how it transitioned. When the game was first developed there were a ton of low players farming for their money. This led to the crafters, the industrialists, making most of the profit on a good. However as the market transitioned and everyone (more people) began crafting the value of production went down, and the profit transitioned into the initial mining, the farming, the initial production of raw goods. As a crafter this sucked for me, but it just meant I had to watch the auction house and crunch the numbers more often (which I actually enjoyed). What finally put the nail in crafting though was a website that listed every production recipe with the current cost of the materials and the price history of the finished good. With this information released all, for example, gold or blacksmithers could simply go down the list and see where the profit was in making an item, there was no number crunching, just reading. The website helped most people Im sure, because they were spending their money on goods that were now lower in price. For me it wasn’t fun though, because half of my fun in the game came from crafting and the auction house.

However, you mention very little about how in-game economics may be used to encourage the players to diversify in strategies. I wonder if it is possible to study that diversity that is generated inside the game dynamics from an economics point of view, i.e. as another resource to be maximized like profit is in a market. Maybe players work much more like the agents in the theory of a free market, since the can focus on maximizing (fun through achievements) without considering most of the emotional or irrational behaviors that take place in the real world. Somehow the equilibrium of diversity, fun, level of difficulty, etc is an emergent property of the game dynamics.

It is just something I am thinking right now, maybe it does not make much sense. Do you have any recommendations on related articles?

The real world contains some economically unviable things (as I’m sure we’re all too aware these days). I guess it’s appropriate to place similarly unviable things in a game, except that it might be considered a waste of developer resources (and perhaps player time). That is, why would a player use something that is strictly worse than something else?

So on that point of scrictly better or worse, there are many tradeoffs that can be used to alter the quality of an in-game item, things like accessibility or timeliness or potential for future improvement/upgrade.

Speaking of tradeoffs, one of my favorite cost models is Advance Wars, where having a light tank now might be better than having a medium tank in two turns. That is, the real value of a unit isn’t its direct cost, but its situational use.

The other weird cost example I like is the Age of Empires pikemen vs. knights problem; a knight still beats a pikeman, but not a knight-equivalent-cost number of pikemen.

Oh, and this discussion reminded me of your post from late 2007: http://www.designer-notes.com/?p=70