At the moment the system doesn't make much sense. Pops buy goods to fulfill their needs proportional to the supply of these goods, which is not a natural behavour and not really how goods substitution must work.
This leads to pops overpaying for needs fulfillment and industries getting unfair profits or disadvantages, sometimes killing them outright.
How it works now?
See these screenshots:
After the initial tinkering, the price of wood and oil stabilized at 29,3 and 27,2 respectively (see pics 1 and 2). But one unit of oil is equivalent to two units of wood (see pic 3), meaning that for a unit of heating_fulfillment people pay 13,6 in case of oil and 29,3 in case of wood. So those that use wood overpay for it more than twice (!) at the moment (although pops in general are overpaying only about 5% compared to the equilibrium, this is stil not minimal for them, and more importantly, it's life and death for the whaling industry).
How it should work?
Prices should try to reach a reasonable equilibrium. Pops should shift their purchasing behaviour to the point where there is no way to marginally decrease price for the same level of need fulfillment.
Here it would be achieved, if my math is correct and no other goods are used for heating (like cloth), at about 28 and 56 per unit of wood and oil (compare with 29,3 and 27,2 in current design). So the market price of oil is lowered massively due to this.
Why is this important?
First of all, this is only logical. Goods substitution demands that the price per utility is minimized, and failing this causes all sorts of weirdness.
Examples of wierdness:
Death spirals with undersupply of whale oil and other similar substitutable goods. If the supply is low, the current system sets pop demand as low too, making whalers even less profitable until industrial oil consumption kicks in. If meat is cheap too, they would simply close, despite the fact that pops could pay significantly less for heating and provide whalers with huge income in the process if the system worked correctly.
A farther but a more important example is that the same likely affects services price, leading to them being massively underused for art, free movement and communication needs, which leads to urban centers being unprofitable, which is one of the leading causes of massive, ahistorical and game-breaking late-game unemployment. There are also limits in place on how much of a need can be fulfilled with a substitution good (services in the example), but I believe that the actual consumption is always very far from those anyway.
So the questions to the devs are:
Do you agree that the problem exists?
Do you agree with my assessment of its severity?
Are there any hidden problems in attempts to tackle this head on (make pops correct their purchasing behaviour every week towards equilibrium prices for a unit of utility, instead of correcting it towards supply share)?
Are you going to fix this all and when?
I was really surprised to not hear about it in the "what we're going to do in 1.3" dev diary.
UPD in 1.4, late August 2023: no major changes here. The 1836 situation is slightly more bearable and the whaling industry isn't dead from the start, but overall the system isn't logical or mathematically correct yet, oil is still underused, and the death loops that kill whaling still happen. No amount of playing with weights can fix the fundamental problem, using sell share as a model distribution just can't work and thus doesn't work
This leads to pops overpaying for needs fulfillment and industries getting unfair profits or disadvantages, sometimes killing them outright.
How it works now?
See these screenshots:
After the initial tinkering, the price of wood and oil stabilized at 29,3 and 27,2 respectively (see pics 1 and 2). But one unit of oil is equivalent to two units of wood (see pic 3), meaning that for a unit of heating_fulfillment people pay 13,6 in case of oil and 29,3 in case of wood. So those that use wood overpay for it more than twice (!) at the moment (although pops in general are overpaying only about 5% compared to the equilibrium, this is stil not minimal for them, and more importantly, it's life and death for the whaling industry).
How it should work?
Prices should try to reach a reasonable equilibrium. Pops should shift their purchasing behaviour to the point where there is no way to marginally decrease price for the same level of need fulfillment.
Here it would be achieved, if my math is correct and no other goods are used for heating (like cloth), at about 28 and 56 per unit of wood and oil (compare with 29,3 and 27,2 in current design). So the market price of oil is lowered massively due to this.
Why is this important?
First of all, this is only logical. Goods substitution demands that the price per utility is minimized, and failing this causes all sorts of weirdness.
Examples of wierdness:
Death spirals with undersupply of whale oil and other similar substitutable goods. If the supply is low, the current system sets pop demand as low too, making whalers even less profitable until industrial oil consumption kicks in. If meat is cheap too, they would simply close, despite the fact that pops could pay significantly less for heating and provide whalers with huge income in the process if the system worked correctly.
A farther but a more important example is that the same likely affects services price, leading to them being massively underused for art, free movement and communication needs, which leads to urban centers being unprofitable, which is one of the leading causes of massive, ahistorical and game-breaking late-game unemployment. There are also limits in place on how much of a need can be fulfilled with a substitution good (services in the example), but I believe that the actual consumption is always very far from those anyway.
So the questions to the devs are:
Do you agree that the problem exists?
Do you agree with my assessment of its severity?
Are there any hidden problems in attempts to tackle this head on (make pops correct their purchasing behaviour every week towards equilibrium prices for a unit of utility, instead of correcting it towards supply share)?
Are you going to fix this all and when?
I was really surprised to not hear about it in the "what we're going to do in 1.3" dev diary.
UPD in 1.4, late August 2023: no major changes here. The 1836 situation is slightly more bearable and the whaling industry isn't dead from the start, but overall the system isn't logical or mathematically correct yet, oil is still underused, and the death loops that kill whaling still happen. No amount of playing with weights can fix the fundamental problem, using sell share as a model distribution just can't work and thus doesn't work
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