Questions about the latest update (6)

Discussion of the Economic Model in SR2010

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SheepRock
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Questions about the latest update (6)

Post by SheepRock »

Hey

Long time lurker to the forum, have been playing for a long time and really really enjoy this game. Good job BattleGoat!

2 questions about the new update, after playing about 10 games on different maps:

1) Why does every single negotiation with the AI have a counter offer of 100 million attached to it? and why cant I negotiate even slighty down from that without getting rejected?

2)Why is the economic system broken? With the exeption of intentionally trashing ethopia buy purchasing 5 industrial plants in one move and maxing out all spending, and freezing all other industry, I am unable to cause economic hardship of the sort that i lose money come the next turn cycle. I can pop in to virturally any state, run a $100 million per turn trade debt, freeze my bond purchases, max out my social and military spending, and purchace industry and STILL turn a turn by turn profit. By all accounts on the numbers in the treasury i should be deep in red but i got billions. what gives?

Yes i reinstalled :P
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Balthagor
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Post by Balthagor »

1) This simply means the AI wants you to sweaten the deal before it will accept. Try asking for more stuff and it will ask for more than 100M. In some of the European maps I've seen the AI ask for 165,000M before it will accept an offer.

2) the system is not broken, check the economy section of the Wiki and you will get a detailed explanation of how to add up the expenses and income manually. I would suspect that you're seeing profit because you're in the first few weeks of the scenario. You're minister is likley selling off reserve stock of goods. We may have given some of the African regions too much initial stock. Once your minister runs out of excess to sell off you'll see a drastic change in the direction of your treasury.
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Il Duce
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Post by Il Duce »

...I've been doing a lot of haggling with the AI's. Ignore the number in the response. Be creative. If it's a simple trade, sometimes just tweaking down the cost to the AI an alt-tick is sufficient. Sometimes they want MORE - that is, you're selling 4M barrels of oil, and they really want 6M.

IIRC... Getting a NAK to an offer costs you nothing diplomatically - so feel free to be TRULY off the wall, as you never know what will happen. Best 'wacky' trade to date: As Russia in WW3 scenario, getting the U.S. (with substantial belli on both sides) to cough up their AC-130 unit design (one of my alltime favorites) for the Russian M-17 spyplane (essentially the Russian U-2). In dollar terms, it looked like a good deal to the U.S.'s AI. If you don't ask, you don't get.
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SheepRock
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Post by SheepRock »

nifty. As far as negotiation is concerned, i have yet to see it be any number other than 100million, and that number is not negotiable unless I increase it.

but on the economy front, I think where I was getting confused is when I accepted a WM offer for cash and it actually worked, money came in for more than one day, as opposed to just one turn. However it does not appear to be anywhere in the inflow list for cash.... and all that money does make the game significantly easier. I presume the extra money would increase my inflation, and it seems to, but the inflation in this game doesnt pose much of a practical threat to an economy to justify saying no.

Havig said that, what exactly is the effect of inflation in this game? the best i could find in the forum was vague referrences to an argument over the price of units. I would have thought it would hurt domestic sales and prices paid for goods, but there seems to be confusion there too.
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Post by Il Duce »

...Just how WM grants paid over time enter the books is still someting of a mystery - but perhaps the Goats will clarify it again. It does seem to come in somewhere. In general, cash that goes directly into your treasury does not inflate the economy (as it is not part of disposable GDP - the pop can't spend it, but it may increase your services subsidies, so they benefit indirectly).

Inflation is a constant issue - it is obscured somewhat by the fact that there is no foreign exchange (and no forex arbitrage, alas). You can see the effects when you compare a domestic commoditys' cost per unit to the general market prices - there are times when it is cheaper to buy than to make your own. Unfortunately, depending on the market for commodities is a bit risky as there's always someone who will jerk up the prices when you aren't looking (it's distracting to have to check a specific price daily, and ultimately you will miss a day when the price jumps).

Hey Goats - next game, ministers need an 'arbitrage for best prices' directive, so that they intelligently buy or produce depending on market prices on a daily basis.

Back to inflation... as mentioned in posts you've probably read, I tend to qualify my inflation fears with the velocity of immigrant inflows - as long as there are enough incoming population to keep unemployment high, then things are o.k., regardless of unit production costs. However, those high unit prod costs will keep you from generating revenue from your surpluses as you can not sell them off profitably. This is probably o.k. if you understand that at some point you will have to induce a recession. Having these surpluses on hand permits you to set production levels down some - to force unemployment up, while not encountering shortages during that induced recession. In principle, a recession without shortages tends to send the unemployed into the military, or they stick around and soak up your social services - a recession with shortages makes them run for the border. This is primarily anecdotal as I have no time or means to get a hard metric on this.

One very consistent inflation offset technique goes like this. Once you are self-sufficient and price-stable in a commodity (and have about 10-20% headroom in production capacity), set the production quota to 98% of demand (not 100%). Dunno why, but for most commodities, this will result in production that slightly exceeds demand, but tends to keep prices from creeping up. This does not work for coal and ore, and under certain circumstance, m-goods, and I do not know why. Coal usually needs to be at 104-106% to match demand. Go figure. Surprisingly, this does work for power generation. If you need to produce a marketable surplus, I would still tend to recommend that you use some demand based percentage, and not a hard quota.

As you will see, driving a regions' economy is sort of like driving around in carnival bumper cars. It's a lot of fun, but you get a lot of unexpected jolts. And like in most carnivals, the steering mechanisms aren't very precise and the cars are set up to veer unpredictably.

It is unlikely that you will find any specific economic how-to articles. I have a few formular approaches to setting up the economy from the start of the game - but they are contradictory. Some work for certain regions, some work for others. Getting thing under control in the first four months or so is vital - if you don't, restart and try something else. On the other hand, the premises of your econ start-up will cease to operate after the first 9 months or so and you will have to review your direction.
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SheepRock
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Post by SheepRock »

Thanks for the post, Duce.

The unemployment is very direct at effecting the price per unit...the magic 3.0 and its dire consequences... but I have yet to see an effect of inflation that mattered enough for me to worry about it. im probably just not very observant... but in most games i find myself running 8-13%, which seems high and should be damaging to the point of a forced recession at somepoint down the road.

I guess it would be nice to see a list of sorts of what gets impacted and which direction...research costs, unit training, social services, building etc.
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Post by Il Duce »

...The 8-10% inflation that you are seeing is tolerable for a while... In some scenarios, all of the regions are suffering inflation, so it's all relative. Just make sure that you are the first one to get to the end of the tunnel.

In the long run, it will mean that you can't sell anything profitably on the WM. If you have population inflow, you're probably happy. Over time, high inflation will start to strangle that, as your overall costs of production (in the treasury master stats) will begin to eat into the governments' disposable funds - that is, research (funding or adding more centers), recruiting and maint, and services - because the costs of services inflate too. Worst case scenario - you won't be able to fund basic commodities (ag and power), and you won't be able to afford to buy what you need without making some drastic cuts - a recession out of control.

Depending on how observant your opponents are, being dragged into war when you are highly inflated puts you at a serious disadvantage - as being forced to defcon 3 with no out will probably break the bank. Dunno if the AI's look at this, or how hard or at what level.

It isn't that hard to infer the state of your neighbors' economy from the non-cheat info available. How much of what are they selling? You can also get some pretty good data on what they have in the diplo screens. If they have large surpluses that they are not selling, it's probably because their cost of production exceeds the WM price significantly. I can just hear my interior minister now: "Compare and save," she calls out in that obnoxious Susie Homemaker voice. Which is still much better than hearing your Defense minister do his Hal 9000 imitation - "I can't do that, Duce."

I suggest that you save your game and do a few trial scenarios - in one, just let it ride. in the alternate, force a minor recession on your own terms. See what you think after this.
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Il Duce
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Post by Il Duce »

...A late addendum.

regarding inflation. Rather then look for an itemized list of entities affected by inflation, one might rather ask what are the sources of inflation?

And one of the prime causes of inflation is most often government demand. So if you are looking to control inflation, consider the source: reduce your builds - most notably unit builds - and keep a firm limit on infrastructure builds while you are in an inflation cycle.

Perhaps this will give some insight into the nature of inflation.
I know a lot of the experienced players do this 'naturally,' although not necessarily deliberately - but for newer players government consumption as a mover of inflation might not be obvious - this is especially troublesome when, for instance, missile and unit autobuild is left enabled.

Just because you can doesn't mean you should.
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Lightbringer
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Post by Lightbringer »

I always seem to have the opposite problem. Falling inflation (sometimes even to the point of deflation) and rising unemployment. I specify prominent inflation causers like "encourage business" and "improve economy" (I'm sure I got the exact names wrong... minister focus orders). I am building dang near my cap of units. I always seem to have a half dozen factories being upgraded or repaired. I have been activating Agriculture, lumber, and water facilities to accomodate the African population which seems not to have had any of those things covered before I moved in. I have even ordered my production guru to raise domestic prices. Some of my efficiency budget numbers are pretty high, should I lower these and activate more plants? I am about to build twenty fusion plants...will that help? I'm not even sure low inflation/deflation is hurting me. I have every major setting at reccommended for now (research, military salaries and upkeep, and all social except the safety net trio) and am only losing 2 billion a day. Considering I have almost 3 trillion in the bank this is not distressing me for the moment.

I'm not a complete economy idiot...but you definately wouldn't choose me as your treasury minister either... comments would be welcome.
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Post by Il Duce »

...Rising prices are not necessarily indicative of inflation per se - at least not in this econ: it is a way to control growth, and growth out of control is what causes inflation. If you have such an influx of population, then you won't see major inflation...

Are you playing South Africa by chance? They seem to have nothing but revenue opportunities and get to advance tech levels twice or more a year with all the surplus cash they generate (that is, faster than you can develop units available at your current level).

You pretty much have to take each region as it comes - and some have a lot of advantages, inherently. Just for contrast, try the campaign and start out from one of the Chinese regions. It ain't pretty.
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Post by Lightbringer »

Actually this is the world stage of a campaign I started out as Dallas. I have a stubborn streak about finishing games I start, but mainly I am finishing my "education" in the game before starting anything long, WWIII or another campaign, as somewhere more challenging.
"Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery.” -Winston Churchill
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Post by BigStone »

Well.. a nice prio thats works fine to inflate your inflation is:
"Increase domestic demand"

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