Clever Way to Have hundreds of new products in the Add-On
Posted: Fri Aug 27, 2010 9:57 pm
Hello Enlight!
So glad to see you're adding another chapter to the Capitalism story. I've played the Capitalism series since day 1, and loved every minute of it. In fact, it's partly responsible for me becoming an economist.
I have a suggestion that I wish to tell you about in brief, and if you want more information on it, you are welcome to contact me directly.
You can actually add hundreds of new products into the game and still have players competing directly against each other on them. You can do this through the economic principles of "Subtitute" and "Complementary" Products.
You would do this by having similar products "overlap" into other product's territories which is *exactly* how it works in real life economics.
Let's start with "Substitutes".
Consider the example of beverages. Perhaps your company makes Cola, and it's delicious but expensive. Fortunately you have a good marketing campaign going, and so people are willing to pay that $2.50 per can you're asking. My company looks at your product and says, "We can't touch that. Let's make something else". My company then starts making beer. It's not good, but boy is it cheap! A semi-delicious can of beer for just 35 cents.
My product (beer) will ultimately steal away some portion of your cola business. Why? Because a small percentage of cola drinkers are also beer drinkers, and would accept it as a valid substitute. Those particularly concerned with price would be most interested. In this way, these two products overlap each other. All you would need to do from a design standpoint is create a whole bunch of new products for each industry, then assign overlap percentages to each one. For example, Cream and Milk would overlap each other quite heavily (perhaps 50%) whereas Beer and Milk would not (perhaps 5%).
Then each market has a larger group called "beverages" which is comprised of a certain number of units that can sell each period (day, month, hour... whatever). For example, if 10,000,000 bottles of milk are being consumed in a city and people just can't drink any more, my new cola drink is only going to cannibalize sales of Milk. Now people are drinking 9,000,000 bottles of milk and 1,000,000 cans of beer since that industry subgroup demand is being fully met.
Now let's quickly touch on "Complements", though you'll quickly see where I am going with this. I also should note that Substitutes from above can be fully implemented without ever implementing Complements. It's just that Complements complete the economic principle quite well.
Basically it works like this. If you are selling French Fries and I am selling ketchup, when I raise the price of my ketchup, the sales of my ketchup fall, but the sales of your french fries also falls.
Why? It's because that people have a budget constraint, and a certain number of people always like ketchup with their fries. If the price of the pair rises beyond their ability to purchase it, then they won't/can't purchase it. So a rise in my ketchup has hurt your sales of fries.
This would be implemented the same way. After creating a bunch of new products, just plug in the complementary relationships that it has with other products and the degree to which they're related.
As you can see, these ideas would allow Capitalism to have hundreds of new products created, without losing the motivation for players to compete directly with each other. Not only that, but I believe the Cap II engine is already largely suited to this task.
I welcome you to contact me via email if you'd like to ask some further questions about this, or even if you'd like some input from an economist.
Best of luck with your project!
So glad to see you're adding another chapter to the Capitalism story. I've played the Capitalism series since day 1, and loved every minute of it. In fact, it's partly responsible for me becoming an economist.
I have a suggestion that I wish to tell you about in brief, and if you want more information on it, you are welcome to contact me directly.
You can actually add hundreds of new products into the game and still have players competing directly against each other on them. You can do this through the economic principles of "Subtitute" and "Complementary" Products.
You would do this by having similar products "overlap" into other product's territories which is *exactly* how it works in real life economics.
Let's start with "Substitutes".
Consider the example of beverages. Perhaps your company makes Cola, and it's delicious but expensive. Fortunately you have a good marketing campaign going, and so people are willing to pay that $2.50 per can you're asking. My company looks at your product and says, "We can't touch that. Let's make something else". My company then starts making beer. It's not good, but boy is it cheap! A semi-delicious can of beer for just 35 cents.
My product (beer) will ultimately steal away some portion of your cola business. Why? Because a small percentage of cola drinkers are also beer drinkers, and would accept it as a valid substitute. Those particularly concerned with price would be most interested. In this way, these two products overlap each other. All you would need to do from a design standpoint is create a whole bunch of new products for each industry, then assign overlap percentages to each one. For example, Cream and Milk would overlap each other quite heavily (perhaps 50%) whereas Beer and Milk would not (perhaps 5%).
Then each market has a larger group called "beverages" which is comprised of a certain number of units that can sell each period (day, month, hour... whatever). For example, if 10,000,000 bottles of milk are being consumed in a city and people just can't drink any more, my new cola drink is only going to cannibalize sales of Milk. Now people are drinking 9,000,000 bottles of milk and 1,000,000 cans of beer since that industry subgroup demand is being fully met.
Now let's quickly touch on "Complements", though you'll quickly see where I am going with this. I also should note that Substitutes from above can be fully implemented without ever implementing Complements. It's just that Complements complete the economic principle quite well.
Basically it works like this. If you are selling French Fries and I am selling ketchup, when I raise the price of my ketchup, the sales of my ketchup fall, but the sales of your french fries also falls.
Why? It's because that people have a budget constraint, and a certain number of people always like ketchup with their fries. If the price of the pair rises beyond their ability to purchase it, then they won't/can't purchase it. So a rise in my ketchup has hurt your sales of fries.
This would be implemented the same way. After creating a bunch of new products, just plug in the complementary relationships that it has with other products and the degree to which they're related.
As you can see, these ideas would allow Capitalism to have hundreds of new products created, without losing the motivation for players to compete directly with each other. Not only that, but I believe the Cap II engine is already largely suited to this task.
I welcome you to contact me via email if you'd like to ask some further questions about this, or even if you'd like some input from an economist.
Best of luck with your project!
