Suggestion: realistic money supply

[David]

Suggestion: Add a new “Realistic Money Supply” mode that will be available when both the Banking DLC and the City Economic Simulation DLC are enabled.

When you attempt to raise funds by issuing bonds or new shares, the funds that you can raise from public individual subscribers will be limited.

The funds that people have for investments will be limited by the total GDP of the cities.

[ALICE]

good！

[tutu]

Please implement it quickly

[David]

Please implement it quickly

These are high level game ideas. The game design details, including the interface and the formulas for determining the amount of funds that public investors have for investing, still need to be defined.

Will all the companies, including the AI and player companies be competing for such funds from public investors? Should the companies be getting the funds on a first-come first-served basis?

For example, let's say that all the citizens in all the 4 cities in the game will save a total of $10 million each year and set aside the money for investments into stocks and bonds. If an AI company issues new shares, aiming to raise as much as $9 million, should this AI company be getting $9 million out of a total of $10 million of the public investors funds currently available?

Let's say that the player company then decides to issue bonds to raise $20 million, but the pool of fund has been reduced to $1 million ($10 - $9 = $1 million), will it be seen as being unfair to the player company?

Do you have any suggestions about any of these details?

[lagrelax]

Hi David. A high-level concept to clear here, when a company raise $9 million through offering shares, that 9 million actually is not simply deducted from the whole funding pool. Eventually the company will use the money to pay for employees, buy materials, do marketing etc. And the respective upstream suppliers/marketing agency will use the revenue to pay their employees too. And all of these money will in the end go back to people/companies' bank saving account. In this case, the total fund to invest would still be $10 million.But along the way the company actually has an "extra" 9 million to do more operations, like new 9 million was created. This process can keep going round and round and countless money would be created. This is somewhat the money creation process of the financial system.

Raising fund through loan is similar and more typical because it is less risky than the equity financing. And it accumulates credits. The speed for banks to do this through loans is limited by the reserve rate required by the regulators. This also make it easier to config from the government perspective

[David]

Hi David. A high-level concept to clear here, when a company raise $9 million through offering shares, that 9 million actually is not simply deducted from the whole funding pool. Eventually the company will use the money to pay for employees, buy materials, do marketing etc. And the respective upstream suppliers/marketing agency will use the revenue to pay their employees too. And all of these money will in the end go back to people/companies' bank saving account. In this case, the total fund to invest would still be $10 million.But along the way the company actually has an "extra" 9 million to do more operations, like new 9 million was created. This process can keep going round and round and countless money would be created. This is somewhat the money creation process of the financial system.

Raising fund through loan is similar and more typical because it is less risky than the equity financing. And it accumulates credits. The speed for banks to do this through loans is limited by the reserve rate required by the regulators. This also make it easier to config from the government perspective

From the gameplay mechanism perspective, how will this work in the game?

The dev team intends to implement the realistic money supply mode for the Banking and Finance DLC. They are in the process of defining the gameplay mechanism and any inputs on this will be helpful.

[lagrelax]

Hi David. A high-level concept to clear here, when a company raise $9 million through offering shares, that 9 million actually is not simply deducted from the whole funding pool. Eventually the company will use the money to pay for employees, buy materials, do marketing etc. And the respective upstream suppliers/marketing agency will use the revenue to pay their employees too. And all of these money will in the end go back to people/companies' bank saving account. In this case, the total fund to invest would still be $10 million.But along the way the company actually has an "extra" 9 million to do more operations, like new 9 million was created. This process can keep going round and round and countless money would be created. This is somewhat the money creation process of the financial system.

Raising fund through loan is similar and more typical because it is less risky than the equity financing. And it accumulates credits. The speed for banks to do this through loans is limited by the reserve rate required by the regulators. This also make it easier to config from the government perspective

From the gameplay mechanism perspective, how will this work in the game?

The dev team intends to implement the realistic money supply mode for the Banking and Finance DLC. They are in the process of defining the gameplay mechanism and any inputs on this will be helpful.

A brief thought here:

According to the equation of exchange https://en.wikipedia.org/wiki/Equation_of_exchange:

M*V=P*Q

P: Price of goods
Q: Quantity of all goods
V: Velocity of money
M: Total money in the system

In game, I feel there should be a way to get the value of P and Q (including local goods). V can be set as a config value, also will change according to different interest rates -- the lower the rate is, the velocity will be higher. Then the total financing should not exceed M, which equals P*Q/V.

On the other hand, when a company is financed, it will put those money into production, generating more P*Q. This will result in a higher M, so the entire loop can sustain.

[David]

From the gameplay mechanism standpoint, how would this exactly work? What would the user expect to see if this is implemented?

[David]

Update: work-in-progress screen of the Realistic Money Supply feature.

Public Investors' Money
Realistic Money Supply is enabled in this game. It is more difficult for player and AI companies to raise funds from IPO, issuing new shares and bonds as there is a limited supply of Public Investors' Money. The rate at which Public Investors' Money increases is based on the national GDP.

[lagrelax]

Update: work-in-progress screen of the Realistic Money Supply feature.

Public Investors' Money
Realistic Money Supply is enabled in this game. It is more difficult for player and AI companies to #raise funds# from IPO, issuing new shares and bonds as they are competing for the same pool of Public Investors' Money.

Great to hear this! Can you shed more lights on the mechanism and ETA?