all I really need to know I learned from video games – part 1

From Thomas Sowell’s Basic Economics:

If the entire contents of a store get sold out in about two weeks, then that penny on a dollar becomes more like a quarter on the dollar (26 cents, to be exact) over the course of a year, when that same dollar comes back to be re-used 25 more times a year.

In college I had plenty of free time to play video games. There was a week or two period when I focused my effort on the space adventure free play RPG called Privateer 2. In this game, the two main methods of making money are either trading (hauling goods from planet to planet) or running mercenary missions. I figured out fairly quickly that mercenary missions were not only dangerous, but also had extremely low pay. I then looked to maximize profit in trade.

There are about 35 commodities in Privateer, 30 if you do not count illegal commodities (with the number of police patrolling space, it is not a good idea to peddle illegal commodities). These commodities fluctuate in price. During my various visits to planets I mapped the average price of each commodity and then compared the various planets to each other to determine trade routes (see this spreadsheet).

My first mistake was attempting to peddle Bex Beer. Bex Beer is made on the planet Bex and the best trade partner is about 10 jumps away. While I could double my profit using Bex Beer, the game limits the total cargo capacity (your own ship plus one hired freighter). With 10 jumps, there was a good chance the freighter would be destroyed by pirates, ensuring me that I would have to reload my game and try again. This took an exuberant amount of time. Even though I might make a profit at 100%, with the same time that I was making 100% profit I could make more money at a lesser profit rate.

I learned that time must be considered as an input for profit.

I turned my focus to two planets only 3 jumps away from each other. After charting the profits of the various items, I began stocking my ships with the highest profit yielding commodities. At first, I was hiring the largest transports, but soon realized that I could not fill them to capacity depending on the planet.

I started saving money by hiring smaller cargo ships for smaller hauls. Even when I could fill a large cargo ship to capacity, I figured out that it would be only worth it to hire the larger cargo ship if the difference in price between the small ship and the large ship were exceeded by the nominal profit for the added cargo space. If hiring a larger ship created 1 more cargo space for $10, but the cargo that filled the area only created $2 in profit then that equals a loss of $8.

I learned that investments only make sense if the profits cover the cost.

After several jumps back and forth, it became apparent that I had excess money that just sat in my bank account after filling the ship with high profit commodities. Instead of focusing my money on commodities that yielded the highest percent profits, I began filling my ships with commodities that produced the highest nominal profit. Although Brikcrete could give me a 30.56% profit ($2), Solar Generators could give me a 17.2% profit ($12).

I learned that uninvested money is wasted money.

About christopher fisher

The blog is meant for educational/entertainment purposes. All material can be used and reproduced in any length for any purpose as long as I am cited as the source.
This entry was posted in Econ 101, Economics, Trade, Video Games. Bookmark the permalink.

4 Responses to all I really need to know I learned from video games – part 1

  1. gamerofcardboard says:

    I often find video games to mimic Milgrom’s Linear incentive model quite well; especially in regards to DLC; that being said do you think that video games deal very well in terms of how a player spends their currency?

    • The problem with many nonlinear sandbox games is that after a point, people have nothing left on which to spend money. Some games try to cope with this by vastly undervaluing items the player is selling and overvaluing the items the player is buying (e.g. making the player sell at 10% of the store price). Some games try to limit levels of items, so if the player wants to best items he can use then he must purchase new items at every level (this is also a bad copout that I try to mod out of games). Some games try to limit inventory and merchant cash to avoid huge profits (I also mod this out of games). The best thing a game can do is expand the possibilities of what can be purchased. Oblivion added buying houses. A mod for Morrowind added buying your own business. Mods for fallout allow you to create your own army or village.

      The best games in terms of cash handling are those in which players can install mods to add new items for purchase into an existing game. Skyrim, Morrowind, Oblivion, Fallout 3, New Vegas.

  2. Pingback: in defense of video games | reality is not optional

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s