how I envision VIII

[calvinhobbeslik]

Ideally, I think the biggest step of all Paradox games is a defensive AI. This along with a better warscore generator that factored in a collapsed nation would be much better.

I should not need to Occupy an entire nation to get peace after total decimation of the army.

One other thing, making States in Africa needs to be much much harder, if not impossible. Maybe I am wrong, but I do not believe France, England and Belgium industrialized the entirety of Africa.

It makes no sense that by 1870 I cannot use a Place in the Sun CB on France because every African possession is not only a State but is more industrialised than the entirety of Spain.

Huh? In my OE game in 1890, the only states in Africa were my original Libyan posessions(including Tripoli) and British South Africa

[marnues]

Transportation cost, for my money, is the big win. This would necessarily remove the World Market as it is now and would institute an actual buyer/seller scenario. Shipping and therefore naval might would become hugely important for purposes other than fighting the UK, and railroads would take on a whole new economic meaning. With known buyers and sellers numerous new socio-political relationships could be added, such as real tariffs and embargoes.

To completely derail the comparative advantage discussion, it's meaningless while all non-rubber goods saturate the markets. Right now, country 1 makes all the steel and lumber while country 2 rots.

[iskallinn]

How would one go about setting up different currencies? That would be a great feature along with some sort of comparative advantages and transportation costs for goods.

Actually the more I think about it, currencies would be so awesome. Making the ownership of colonies more important and also the "tuning" of the economy (import vs export).

Making the AI understand it, don't know since most people do not even get it

[keynes2.0]

To completely derail the comparative advantage discussion, it's meaningless while all non-rubber goods saturate the markets. Right now, country 1 makes all the steel and lumber while country 2 rots.

This is a result of the lack of comparative advantage and substitution. If you have scarcity with comparative advantage and substitution then producers adapt to some profitable niche and consumers will get what they can afford. If you have scarcity without these balancing influences, you plunge the world into depression. This is why all the major economic rebalances of the game (AHD expansion, PDM, VRRP) "correct" shortages and make money easier to come by. The market has no means to deal with shortages and no way to keep 1 country from monopolizing all the industries.

How would one go about setting up different currencies? That would be a great feature along with some sort of comparative advantages and transportation costs for goods.

Actually the more I think about it, currencies would be so awesome. Making the ownership of colonies more important and also the "tuning" of the economy (import vs export).

Making the AI understand it, don't know since most people do not even get it

You would still handle all calculations in terms of the reserve currency, British pounds. These represent the precious metals that backed the currency in this time frame. You would just apply an exchange rate multiplier to the price of a good depending on the country you are buying from. So you might have to pay %110 of the WM price when buying from the UK but only %80 of the price when buying from Russia. A simple way to set the rate might be the import-export balance. On a tick when the country imports sufficiently more then it exports, the rate falls. A net exporter would have it's rate rise. This would however make it so that prices rather then prestige determine a countries market share, at least partially. If even 10% of the market was determined by prestige, that would still enable the most prestigious nation to be a huge net exporter, just less so then currently.

[Eichenthal]

No problem. But I still don't see how creating a new currency helps factories sell their goods...

it doesn't. It helps building/maintaing regional price differences. In times where transportation costs + tarrifs of an imported good would sometimes be more than 80% of the end-users price, local differences in price are a nobrainer anyway.

As a concession in the direction of true regional markets, I'd settle for transportation costs. This would at least make overseas market penetration a bit harder than it is now.

Transportation cost, for my money, is the big win. This would necessarily remove the World Market as it is now and would institute an actual buyer/seller scenario. Shipping and therefore naval might would become hugely important for purposes other than fighting the UK, and railroads would take on a whole new economic meaning. With known buyers and sellers numerous new socio-political relationships could be added, such as real tariffs and embargoes.

To completely derail the comparative advantage discussion, it's meaningless while all non-rubber goods saturate the markets. Right now, country 1 makes all the steel and lumber while country 2 rots.

actually transportation costs (+ decreasing economies of scale) is all that is needed to on the one side allow win-win trades due to comparative advantages while still having wide-variety local production to avoid "rotting".

this is what I am proposing.

This is a result of the lack of comparative advantage and substitution. If you have scarcity with comparative advantage and substitution then producers adapt to some profitable niche and consumers will get what they can afford. If you have scarcity without these balancing influences, you plunge the world into depression. This is why all the major economic rebalances of the game (AHD expansion, PDM, VRRP) "correct" shortages and make money easier to come by. The market has no means to deal with shortages and no way to keep 1 country from monopolizing all the industries.

actually production side substitution (multiple production pacts for one single high-end good) as in APD DOES stabilize the economy loads. Of course, additional consumption side substitution would help further.

Maybe seeing any need as "covered" if only , say, 50% are fulfilled and make people choose their purchases to fulfil these 50% cheapest possible would be an easy way of implementing consumption side substitution.

You would still handle all calculations in terms of the reserve currency, British pounds. These represent the precious metals that backed the currency in this time frame. You would just apply an exchange rate multiplier to the price of a good depending on the country you are buying from. So you might have to pay %110 of the WM price when buying from the UK but only %80 of the price when buying from Russia. A simple way to set the rate might be the import-export balance. On a tick when the country imports sufficiently more then it exports, the rate falls. A net exporter would have it's rate rise. This would however make it so that prices rather then prestige determine a countries market share, at least partially. If even 10% of the market was determined by prestige, that would still enable the most prestigious nation to be a huge net exporter, just less so then currently.

Once there is no "world market" any more, just bilateral trade (with transportation costs), market dominanace is not really an issue any more even without implementing national currencies. Nor would there be a need to distribute "market shares" depending on prestige. Which was a rather weird concept in the first place. If your willingness to is above price, you should get the desired good. If it is below, you should be able to sell it. Punkt.

[Eichenthal]

If anyone could name me a location I could freely upload the current Version 1.4 of the document to, I would be quite grateful

[calvinhobbeslik]

If anyone could name me a location I could freely upload the current Version 1.4 of the document to, I would be quite grateful

Mediafire? Dropbox?

[Eichenthal]

thanks.

Version 1.4 here

[SDSkinner]

No problem. But I still don't see how creating a new currency helps factories sell their goods...

If everyone uses a single currency than while comparitive advantage exists in game, it has near zero effect- country 2 only can take advantage of it as long as country 1 has a craftsmen shortage. Multiple currencies are one way to deal with this, although as I mentioned if the ratios for the goods are the same it wouldn't work. The only way out of that would be differences based on input prices, but I think as the game currently works there is a single price for all goods so that option is out as well.

It is possible that you could create comparitive advantage without multiple currencies though- the big problem is that there isn't much of a way to get a comparitive advantage in the first place- the techs benefit everyone equally.

I don't think local currencies can work without local markets and prices. You see anyway around this problem or would the whole edifice of the worlds economy have to be constructed in one go?

[keynes2.0]

Production side substitution certainly helps but I strongly suspect that demand side substitution would be preferable. In some releases of APD we see prosperous nations intermittently plunged into famine because of disruptions in the canned goods market. With consumer side substitution a nation could always at least eat it's own agricultural outputs, no matter how little it's WM clout. But flexibility in either regards would be great. This could go hand in hand with multiple outputs from RGOs/factories/artisans.

And I'm pretty sure that comparative advantage can still work with symmetric prices. Prices being the same doesn't mean that profit margins are the same. As long as profits are asymmetric then a universal exchange rate multiplier would make some goods profitable for some countries to export and other goods profitable for others.

[Eichenthal]

it seems some rather funny ideas of what a comparative advantage is are floating around here

imagine this simple cenario:

farmer A works 50 weeks a year. It takes him 2 weeks to produce 1 ton of potatoes and 3 weeks to produce 1 ton of grain. As he favours eating those two in equal amounts, he will spent 20 weeks to produce 10 tons of potatoes and 30 weeks to produce 10 tons of grain.

farmer B works 50 weeks a year. It takes him 6 weeks to produce 1 ton of potatoes and 4 weeks to produce 1 ton of grain. As he favours eating those two in equal amounts, he will spent 30 weeks to produce 5 tons of potatoes and 20 weeks to produce 5 tons of grain.

Obviously, farmer A has an absolute production advantage for both goods. He can produce potatoes "cheaper" than he can produce grain. Farmer B can produce grain "cheaper" than he can produce potatoes. Thus, farmer A has relative production advantage for potatoes and Farmer B for grain.

Overall production is 15 tons of potatoes and 15 tons of grain.
If we allow them to trade, each will produce more of the good he is best at. In this example, Farmer B would produce 12.5 tons of grain and farmer B 17.5 tons of potatoes and 5 tons of grain.
Overall production is 17.5 tons of potatoes and 17.5 tons of grain. Both could be better off with trading.

This little example shows, that you do not need different currencies to allow gains from trade. Aparently you don't even need one

[keynes2.0]

I know what comparative advantage is in the real world and how it can take place within, for example, a currency union. However we are not discussing the real world. We are discussing the Vicky II economy and any hypothetical changed version of that economy.

[safferli]

Comparative advantage can also be seen in a pure barter economy. But anyone who's as well-versed in real-life and V2 economy, and has the username of, keynes2.0 definitely already knows this

[SDSkinner]

To Eichenthal
Yes, but comparitive advantage with a single currency doesn't work if your factories can supply the entire world market- it just means they focus on what your country is best at first, before hitting the other good.

And I'm pretty sure that comparative advantage can still work with symmetric prices. Prices being the same doesn't mean that profit margins are the same. As long as profits are asymmetric then a universal exchange rate multiplier would make some goods profitable for some countries to export and other goods profitable for others.

Probably, but I don't think something like that currently exists in the game and I'm unsure what would be the best way to cause it. All I've ever heard suggested is having inventions fire that give bonuses to certain industries but provide malus to other inventions firing (like how the prestiege line works). I don't think that would get the results we are aiming for though.

[keynes2.0]

Um, assymetric profits are already in the game. Surely you noticed that the differences in input and output costs, not to mention the quantities needed mean that not all industries are equally profitable.

[Stratagyfan101]

Huh? In my OE game in 1890, the only states in Africa were my original Libyan posessions(including Tripoli) and British South Africa

Maybe this was changed for AHD. I'm still on the original and its insane how quickly France will convert North Africa to a state.

[calvinhobbeslik]

Maybe this was changed for AHD. I'm still on the original and its insane how quickly France will convert North Africa to a state.

Yeah, it's one of the things AHD changed

[SDSkinner]

Um, assymetric profits are already in the game. Surely you noticed that the differences in input and output costs, not to mention the quantities needed mean that not all industries are equally profitable.

I missed your mention of currency multiplier. I'm not sure that would work though- wouldn't it just mean the country with the cheapest currency becomes the workshop of the world?

[keynes2.0]

No, a country would have it's currency depreciate until some factory or other became profitable for profit and the trade gap closed. At that point it's currency would stop depreciating. The factories wouldn't all become profitable at the same time (asymmetric profits) so currency depreciation wouldn't let you get ahead in everything. If for some reason you did get ahead in everything, your trade deficit would have been reversed so your currency would start appreciating until you start having industries become unprofitable.

[SDSkinner]

I see what you mean and it could potentially work. My immediate concern was that there would be a ladder of most to least profitable goods and countries would cluster, but that autocorrects as it becomes saturated and countries move to them next one causing boom and bust cycles. Unless you use government stockpiles to attempt to equalize imports and exports, but it would be insanely expensive and only work buying raw materials.

Other problems I see.... since the currency is devaluing imports become more expensive which may screw over the factories and/or populance. While it woulld be historically accurate for aristocrats to continue importing goods, worsening the balance of trade and killing Latin American industrialization, it wouldn't be fun. Or an anarcho-liberal revolt in the US, taking over the grain districts, spiking the price of food which increases import costs for poor countries and since food is a giffen good, the value of their own exports drops, rapidly screwing them over and causing planet wide famine.

I think subsistence farming would have to be modeled in game in order to avoid things like that from occuring.