Warehouse Ponzi Scheme

[greene345]

As much as I love the idea of not having to work to make a really amazing profit in Capitalism, being able to have a $246 billion yearly profit without actually selling anything is pretty strange.



Here's what I did to be able to have this amazing profit.
1) Build a warehouse, and use a seaport supplier (I chose Gold). Have 7 "inventory" or whatever you call it, 1 input and 1 output.
2) Build a second warehouse, use the same build plan, but instead of linking the seaport as the supplier, link the first warehouse.
3) Repeat step 2
4) Repeat step 3
etc. etc.

Eventually I decided I wanted to try something a little different, so I built a factory, made tablet computer, maxed the price, and then did the same thing as above. By doing this, every consecutive warehouse was bringing in even more money. As of the Save Game (LINK), the most expensive tablets are over $60 million per unit, and my scheme is making me $246 billion profit.

This can only sustain itself if I keep building warehouses and buying from the previous warehouse. If I stop building warehouses, eventually it'll all come crashing down.

Summary? I think this is a bug, not because it's an error or anything, but because in real life, I'd be losing money since I'm not selling my tablets to another company, or to any consumers.

[counting]

I don't think it works at all in a normal setup game. Your corporation is actually losing cash every day no matter what, even if you keep building warehouses. The only reason you can play this long is because you give yourself near 170 trillion from the beginning to burn through. All the earning in balance sheet comes from inventory and land value increase. If you delete them all, you are back to square 1.

As to use bloating account book and window dress the revenue is nothing new in real life, a lot of scandals are mostly done by using similar method. Like the famous Enron case, but they did it even smarter, one of the trick they used is to list future potential sell values as current revenue (sort of like one step to get where you take layers of selling and reselling to increase price). Other less impressive scandals (like Procomp Informatics) use roughly the same method, since in real world, B2B sells is quite common, but there are regulations in accounting, hence they have to setup layers of shadow subsidiaries and foreign shell companies who buy products from the front corporation, choosing products that are new and unfamiliar to investors. Using the strong financial report to fool the public and make a killing on the stock market. (Which by the way CAN make cash even in this game, and you can actually sell your stocks and gain a lot of cash for personal wealth, although the company account still loses cash).

[WilliamMGary]

hmmm...

[counting]

After some thought and I suddenly remembered there used to be an "exploit" (nearly a bug) in Cap 2, where you can set ridiculous price for new product that doesn't have a market yet and make a quick killing before other AIs move in. Although this exploit is largely dampening down by the upper price limit setting in retails.

However there is a trick where you can by pass it, using automatic price setting when you first linking a product. It's something around 120% of the source price. So I think why not try it in this save. And see how end customer AI reacts to the insane price. And by my surprise the rating doesn't go down to -100 as expected, but went up to several thousand rating points due to the city price average is related to the product price currently existed in the city whethere it's been sold by warehouse or retails. Hence it goes from crazy to insanity.

15 trillion profit.zip

(4.31 MiB) Downloaded 357 times

This save is currently have 15 trillion annual profit and rising. Exclude warehouse trading, there are 1.4 trillion sells profit per month to customers. Although the rating does slowly dropping over time, so this exploit will come to an end in a year or so, and sometimes it doesn't work with other cities, if you don't setup enough warehouse chain to boost the price there. Nevertheless I guess the top 0.01% really love buying their 24-karat gold iPad at 100+ million a piece.

IMO this "exploit" certainly should be considered a bug now.

[greene345]

I can confirm that this exploit, bug, whatever we're calling it, works both in a standard (no script) game AND my scripted game. The standard game just takes a bit longer to build up the ponzi since I don't have as much money to start with. In a matter of maybe 10 game days, I was able to make a few hundred million profit.

[counting]

Yep, I've also done it in a standard 200% difficulty game, with inverse inflation, and still able to get trillions of profit. It takes even longer to setup. When you done research one of the new product, first you setup 1 chain using medium warehouse as long as possible, let it run a bit to bloat your revenue figure, then you can borrow more money to keep setup chain, until desirable price. Setup the end point large warehouse to get an insane price, and build more factories to provide this end warehouse direct input. And finally selling the new product to unclaimed markets. If there are enough cities, about half of them will buy your "golden products". Repeat this process for the next chain. Also(contradict to my initial thought), this exploit can run for a very long time, when one city's rating drop to -100, another city's rating will come back to replace the old one.

I've done 4 chains of Notebook, Tablet, Smartphone, and HUDs, selling them at about 1 billion a piece, and they all work. It's just broken.

But I think this can be fixed quite easily, just define an upper limit to the available purchasing power in every city based on its living standard, wage, and population.

P.S. I've tested another game, and it doesn't have to be new products either, it can also be done with normal products (like washing machine), as long as it's selling to unclaimed markets. (But new products usually have higher base price, and a shorter chain), I am able to make billions and buy out 12 AIs within a year.

[greene345]

I don't think dev. needs to set an upper limit. In my case, I'm just buying the tablets from myself. If there is no outside revenue, then there should be no profit. If you think about it, a factory that is only selling internally isn't really making a profit, so realistically, any product that is being sold to another internal company shouldn't be counted except when it's sold to a third party (i.e. consumer or competitor). That's just my thinking though. It would change strategy a bit I expect, but it'd easily solve this problem and may even make the game a bit more realistic.

[counting]

billons profit in a year.zip

(1.2 MiB) Downloaded 125 times

This is the save of a normal game at 200% difficulty started with 100m. I used washing machine to get billions of real profit within a year. Sold 100k a piece to end consumers. You can make a trillion if you like, just extend the chain with 35 or so warehouses and sell 100m a piece (about 12 warehouses to get 10 fold price).

This is like using cheat code to get infinite money and really need to be fixed.

I think I'll make a trillion dollar save, and report this "bug" in a new post. Since There are separate issues of exploiting unclaimed market, and unrealistic rating calculation, I just borrow your idea of bloating the the price using warehouse chains.

[David]

This loophole has been fixed. You may download the latest patch v2.4.05 from http://www.capitalismlab.com/capserver/ ... 052402.zip

p.s. You will have to start a new game though.

[counting]

The Ponzi Scheme alone can still be done, although it's now purely moving goods back and forth. It can be used to manipulated your stock price, and make personal wealth at the expense of maintaining warehouse chains (sort of like in real life, to setup shell companies and window dressing the financial reports, could be profitable but not free). And generally speaking not affecting the game play too much.