Fwurg

[Praetorian Empire]

It looks like that with the current setup of the open market you can no longer buy trade fleet for just 500 . If you want to buy trade fleet now you still pay 500 but you have to assign a trade fleet that has at least 100 as well. Who provided the trade capacity before? If this isn't the case nobody will ever buy trade fleet on the open market because it is a waste of trade capacity.

[The Lifebringer Clans]

I have an Open Market question as well:

Can I buy and sell simultaneously, using capacity from a single trade fleet?

[Veolian Commonwealth]

I think I can answer these questions:

@Chriz: Your analysis is right for the moment. I have already spoken with admin about this: the plan is to phase out the buying of MTCFs through the current method in favour of buying through the open market. This reduces the amount of 'undetermined' economy, which allows people to have a better idea of who produces what.

@Revenant: As far as I can see in the wiki page you can use the capacity assigned to the Open Market in any way you see fit.

[Mercury]

You can buy and sell simultaneously (though it is advisable not to sell and buy the same product - that's just silly).

You can do this using capacity of one or more trade fleets. The only requirement is that the total capacity equals the sum of the number of goods bought and sold.

Thus, if you buy 50 and sell 20 , you need to assign fleets with a capacity of no less than 70 total that turn.

Regarding Trade fleets and other special goods:

It is my intention to phase out the ability to purchase fleet capacity and the likes directly from what some have called the 'white hole market'.

Instead, you would buy the necessary goods from the open market, trade for them or produce them yourself which can be used in turn to produce the relevant upgrades.

However, I will not cut off the option to buy directly immediately. First, I want to make sure the open market works properly, then I will phase this option out in a smooth manner that doesn't hinder players too much.

That means that at this specific point in time, buying trade fleets on the open market is potentially somewhat foolish, however that situation will be corrected in time.

[Mercury]

Open market prices have been added. Due to the fact that this is a new feature, the prices do have a chance of fluctuating in the coming weeks to adjust for new insights or miscalculations, however they have been carefully calculated and I hope they won't be too far off.

Don't forget you need trade capacity to use the open market! Also note: You are responsible for selling any left-overs you have yourself (please list this as a trade route with the open market). I do not check to see if you have anything going to waste and even if I did notice you forgot an opportunity to make extra , I don't know what you would have wanted to spend it on.

For your convenience, why not use the tax tool to see what your leftover are?

[Veolian Commonwealth]

I'm interested in how these prices are derived from the information available -- especially since the market is undercutting some of my own calculated prices at the moment (something I'm not really happy about since I can't really compete with an unlimited market).

Will the actual price calculations be shared with us?

[Mercury]

Sure, I'll share the calculations. At a later time though, its bedtime and such nonsense.

Though if they are undercutting your prices, either you or me has borked a calculation, because these prices shouldn't undercut even bad planners.

Tax Set 7 is the most efficient tax set and it costs about 13.5 to make on the open market. Its worth 9. If you have costs greater than 9 per 12 products you produce, your economy is in serious trouble.

EDIT: I'm curious to see your cost calculation btw

[The Lifebringer Clans]

I'm guessing this refers to for MTCF. As far as I can tell, your trade with Chriz is balanced?

It would cost him about 200 to buy the on the open market. The 40 MTCF he gives you can be bought for the same price. If either of you were to sell to the market instead of each other, you'd make a whole lot less.

[Veolian Commonwealth]

Yes, it has to do with for MTCF's in this case. But it's actually about gasses in general, and possibly some other products (not sure yet; that's why I want to see the calculations).

I understand your point, but I think you paint only half the picture. I agree about the prices you mention, wth the current Open Market configuration the trade is balanced. But you ignore the option to buy on the open market. (As a side note: The selling prices are low to the point of it rather dumping products in outer space, but that's a discussion for another time).

As it is now, buying gasses from the open market is actually better than buying them from someone producing gasses. Under the economic model I currently use each 1 is worth 3/8 , which is exactly the buy price the Open Market offers. So overall (taking into account the required trade capacity, with transport capacity requirements being higher than Open Market requirements), and the political entanglement resulting from dealing directly with a faction the price of gasses is lower on the Open Market then if you buy them from me.

The point is this: most prices on the Open Market are such that it is better to trade with actual systems instead of with the Open Market. However, due to the low gas prices the Open Market forces me to choose between lowering my prices, or kissing my future trades goodbye. And I really don't like to compete with an Open Market that has unlimited supply and, is always in your neighbourhood and is clean of any political entanglement.

[The Lifebringer Clans]

Ah, you're right. Open Market prices are more or less exactly your prices, which might end up being a problem for all the reasons you mentioned.

Note that the trade capacity needed is still less. To get 500 gas from the open market, Chriz needs 500 . To get it from you, he needs to transport 40 MTCF your way, which requires 100-ish .

I'm guessing the prices are a result of availability. I suppose this has something to do with everyone and their grandmother having an Extended Heliosheath.


I've just done the math, and for me, all my 'real' trades are still better than the Open Market.

[Praetorian Empire]

The point is that Brend needs 500 * 2,3 = 1150 to ship it all to me and if i would just buy it on the open market i would only need 500 and would have no political ties with anybody and no risk since the open market is unlimited. I also agree with Brend that selling your items for 1/20 of the buying price is just not worth it. Only if you have a trade fleet free with loads of capacity you would do it. Now it just isn't worth splitting a trade fleet from your real trade routes. Since extra trade fleets cost you 100 you will need a fleet of 4000 capacity and 4000 spare raw materials to get the 100 back, thats not gonna happen...

[Mercury]

Prices for goods were calculated in three steps.

First, the absolute minimum and maximum economic value of the two different types of goods were determined. This gives a range within which prices must fall, lest reality would break (Actually, they can go out by a little bit provided they don't all do the same, but we had to be safe here). Then the variation within is calculated and finally actual prices are determined.

For buying, it was determined that as a principle, it should not be possible to buy a tax set from the open market and turn this into more taxes - for obvious reasons. Thus, the cost of a product should be 9/12th (9 taxes for 12 products) or 0,75 at minimum.

As an added advantage that price level means 1 on 1 trading for the goods you need will always(!) be equally or more profitable than buying those goods from the open market so long as tax sets are produced (any tax set, in fact, as the monetary value of individual products decreases if lower level tax sets are traded in).

Since products are made of 2 raw materials, the absolute minimum value of Raw Materials was determined to be (9/12)/2 or 0,375. However, the actual value of products is somewhat higher than the sum of its raw material cost, since it requires additional processing.

Since the cost of producing products from raw materials is somewhat arbitrary (it depends heavily on the cost of making zones, the time over which the cost is spread out, etc.), we determined that for the minimum cost, we would take this cost as 0. That means the absolute minimum for raw materials is actually below 0,375, but we used 0,375 as a safe limit.

The absolute minimum price of Special Goods was calculated by adding the absolute minimum prices of the raw materials and products it is made of.

Note that these minimums do not include any cost for actually transforming the goods. In this case, since we're calculating in the opposite direction, that means the listed minimums are actually too low. This fact has not been ignored, but is not relevant for this explanation.

Now, the maximum prices for buying any raw material or product was set to 9, the profit from the best tax set (it is actually lower than that, but the maximum buying price was not as relevant as the minimum). Regardless, if you pay more than 9 tax for any product or raw material, you are guaranteed to suffer a loss.

The maximum price for special goods was set at the rule-decided level from the White Hole Market. The actual economic value of the goods is higher than this, but we want to stimulate players improving their infrastructure, so that's a deliberate decision.

For selling goods, a very similar calculation was made, but it was done the other way around. We set as a principle that selling a product on the open market should always be worse than making a tax set. That means the absolute maximum selling price of a product is 0,333 tax. At that price, forming tax set 1 is better than selling the three relevant products individually.

Again, as an added advantage, it means that a 1 on 1 trade of products will always(!) be better than selling it directly to the open market, so long as (any) tax sets are produced.

As a result, the maximum value of a raw material would be half that, or 0,166 tax. Since processing raw materials into products cost taxes, the maximum value is actually lower. Again, this was noted, but isn't relevant right now.

In the reverse direction, the maximum value of Special Goods was set to the sum of the cost of the maximum value for the products and raw materials that make it up. Its actually more than that since processing costs taxes, but its a safe limit.

Since you can always dump leftovers on the open market, the minimum open market value for selling is 0. Nobody pays to sell goods, but 1 is always better than 0 .

Thus the ranges are:

Code: Select all

Price Ranges  | Min Sell | Max Sell | Min Buy  | Max Buy
--------------+----------+----------+----------+----------
Raw Materials | 0        | 0.166    | 0.375    | 9
Product       | 0        | 0.333    | 0.75     | 9


Now that the range has been determined, we can go on to the second step, calculating the variation in price between different goods.

To determine the relationships between product selling prices, I took a look at the supply side of the economy. Specifically, I calculated how many of each type of product was being produced. In this, I took some minor liberties, for example regarding vehicles as these were used for MTCFs and to account for balanced differences between production capacity and actual production. The values were normalised and weighed to have the maximum value slightly below the maximum selling price, to leave room for rising prices.

Upon inspection and recalculation, I found these prices to be unacceptably high. The reason for this is that high open market prices encourage the sale of products directly, rather than trading them. The Open Market has a significant advantage, as was mentioned by Brend, by having no political links, being always close (lower transport cost), etc. For this reason, I have added a profit factor for the open market operators of 50%. Effectively, this has cut the open market selling price for products in half.

That's a drastic measure, and not everyone may agree with me on it. I noticed several comments saying that selling to the open market is rarely worth it as you cannot turn a profit that way.

However, that's how its supposed to be.

You can sell to the open market to dump goods and gain a few extra taxes if you have spare products and capacity without having to worry about the interests of the other party. It is only a small boost, and it is most useful if you are adding a new product to your arsenal which isn't completing any tax sets yet. However, it is not and has never been intended to be profitable in and of itself. The opportunity cost is (deliberately!) too high.

Basically, if you have leftover goods and fleet capacity, selling to the Open Market provides a bit of free money which may help you adapt to the market. It is not, should not and will not be worth it to trade with the open market instead of another player.

I will say this: if it turns out that cutting the selling prices in half was overzealous, I may reverse that decision and raise selling prices in the future. For now, I'd like to heavily stimulate player-to-player trade and see how things develop.

Now, getting back to the prices.

Based upon the values for products, I then calculated the price of individual raw materials. As a rule, it should be better to sell a product than to sell a raw material to the open market. Thus, it should not be the case that the raw materials plus production cost is greater than the value of the product.

No longer able to avoid taking the production cost into account, I calculated it for the most common case amongst the players: A zone in a natural-life planet (1000 cost), producing 210 products (420 resources processed). I spread out the cost over 1 year, or 52 turns. That's a production cost of 0.045788 per raw material processed. I feel that is a realistic and reasonable foundation, but your mileage may vary considerably based on assumptions and local situation. It is however the most common case.

Subtracting the production cost (twice) for each product left a system with 12 comparisons and 6 variables which has no valid solutions, so a best effort was done to determine the various possible prices of each raw material in various possible subsystems. The average of the minimal values for each raw material was taken (based on the condition of raw materials + production cost being lower than the product value) which was determined to be 0.023217454 per raw material.

Not all raw materials are equal. Some raw materials are more abundant and more easily produced. For example, it is easy to get a bonus on Gasses and Metals, but hard to get a bonus on Rares. Those bonuses are offset by penalties, however, bonuses are more effective than penalties since distribution of primary zones is (presumably) non-random. Additionally, certain resources can be collected in more places (Metal, Gasses) than others (Organics).

To compensate for this, I looked at the actual production of raw materials by players, noting that the differences followed the expected production discrepancy - Gasses and Metals were produced in greater numbers than Rares and Crystals, for example. I then used the actual amount produced for that raw material vs the average production for all raw materials (the ratio) as a factor over the average minimum price of raw materials, finding that they fit nicely into the model.

I double checked to see if the condition held, finding it was good with 2 exceptions: Food and Entertainment. I decided that the level of violation of the condition was acceptable as the actual difference was low and the production cost calculation was interpretable - especially since the average production per zone is currently still very low compared to the long term when Tertiary Zones, Corporations and Focussed Planets will become more common.

Based on these numbers and the previously determined production values, the selling prices of special products was calculated. To be specific, I took the component cost of the products and raw materials necessary for each special product and added the production cost to find the values currently on the Wiki.

With the selling prices determined, I moved on to decide on the buying prices.

The buying price of raw materials was determined off of the minimal buying cost of 0.375, the 3/8th mentioned in Brend's post. On top came a factor of the difference between the actual selling price of the specific raw material and the minimum selling price of any raw material. In case of gasses, the cheapest of all raw materials, this factor was 1, resulting in the price of 0.375.

Note that, as mentioned when determining the minimum buying price above, this value is actually -above- the actual minimal economic value of the raw material, as it does not include the cost of production.

Prices were deliberately set on the low side, while there the price rises well above the minimum for products. This is done because raw materials cannot produce taxes directly, requiring players to have additional infrastructure. This significantly limits what options they have in buying from the open market. Additionally, variation within the raw materials is quite high (up to 50% between lowest and highest). Raising the base price means high cost raw materials become extremely expensive.

Now, with the buying price for raw materials set, I determined the ratio between each product and the cheapest product (with Utilities being the cheapest of the products, this led to it having a ratio of 1, the others with ratio's above 1.)

That ratio was multiplied by 10/12th. 10/12th was chosen as it was slightly above the 9/12th ratio for tax set 7. Then the production cost was added for each raw material. I found the resulting prices to still be somewhat low, so I added the production cost again, as if the zone was constructed on a planet without natural life. This results in prices that are in similar (but not identical) ratio's to the selling prices while maintaining a valid and clear relationship to the raw material cost - and its still cheaper to buy the raw materials and produce the products yourself, which was another criteria I feel was important.

The prices for special goods were set at the rule-based prices, which are in turn determined on a % above the tax-set 7 value of the average product / raw material. Those (deliberately) do not take rareness of raw materials / products into account.

Now, if I were to calculate the ACTUAL economic value of special goods in the same way as I did with products from the raw materials value, I might then add up the cost of the necessary raw materials and products and then add the same (double) production cost as I did for making products. This would result in the following prices for special goods:

Hyperspace Nodes (1 raw + 1 product) = 1.821942081
Holonet Relays (6 products) = 7.090698044
Mass Transit Cargo Freighters (4 products, 4 raw) = 6.044806105

This value for special goods is thus between 20% and 50% higher than the current prices on the open market. The reason is that I want to stimulate infrastructure (though in time the prices may rise, especially when demand decreases because people have completed their basic infrastructures).

Now, regarding the point about Gas prices raised by Brend.

I hadn't looked at his trade beforehand, but I can see where the issue lies. At the very least I feel confident to say that this deal is at two ends of the spectrum, the MTCF on one side being under-priced and the Gasses having the lowest price of any raw material. I was aware of trading for MTCF's when I made the prices, but I wasn't aware of the details of this specific deal and it didn't influence the price determination in any way. Even so, that particular deal is at two unlucky sides of the pricing spectrum.

Now, having said that, I have gone over my calculations. I do not exclude the option that I have missed something, but I as far as I can tell, they are correct.

I have additionally made a detailed analysis of not just the trade agreement between Brend and Chriz, but of all trade agreements currently listed on the Wiki. Additionally, I have analysed the turn reports of the last three turns and I have looked into various options and developments.

Based on my analysis, I must conclude that the price for gas on the open market is fair. I do not exclude that the price will rise at some point, but at this time I do not feel it needs to be altered.

However, if you have other insights or idea's, I am open to feedback.

[Praetorian Empire]

Anyway when will the phasing out of the white hole market MTCF happen? Since the current prices are only reasonable if this happens on a short term... Admin?

[Mercury]

Probably around Turn 12 or 13. There will be an announcement beforehand indicating that it is imminent, followed by the actual announcement that it is so.