Galactic Market exploits

[Dinkelman]

I have no problem with the ability to buy up minerals when noticing a low market price, and then hoard it until the price is higher to sell for profit. But this is very different.

@Blurb About treating it as several smaller transactions. Keep in mind then that it would need to show a price that isn't the same per unit for different quantities.

If what I described is not a problem, it's at least illogical right? If you sell and rebuy the same quantity over and over, why would the price get higher and higher after each transaction? The net market supply is the same, and that is what essentially decides the price. Is it because the market loses supply in energy credits? After trying the exploit in game, I see that this happens. I guess yes, in the real world, one single transaction could never be large enough to affect the market price so drastically so that you immediately can sell it back for more than you bought it for, which is what needs to be the case in the game too.

The transactions need to be smaller relative to the market. Yes like you said, one way would be to only allow smaller transactions (but bundling several for less clicks), the other would be to make the price not as easily affected, meaning that the market is bigger, more stable. This should be the case as the game progresses, and the quantities empires trade increase. The desired effect of having a larger market relative to the transaction sizes is achieved. I think the latter is the needed solution.

Maybe there is an algorithmic solution to it. The more the market is being used, i.e. the more resources that flow through, the less should it fluctuate from transactions per resource. The price change function must be dynamic. For example, in the early game the market trades less resources and the price fluctuations are at a reasonable level for that time. But later, quantities grow to the level that the fluctuations become so high that they're exploitable. With more resource flow, do prices need to be more inert. The result should be for example: when I sell 20% of my stockpile in the early game, the market price fluctuation is the same as when I sell 20% of my stockpile in the mid and late game, in spite of, and because my stockpile being larger. To put things short, the price inertia must be proportionate to the market's resource flow.

Sorry for the length of the post, but it's hard to concisely explain what I mean.

 

[Blurb]

I've sketched up a diagram to show how Paradox's mistake works.

The red line 'Minerals' plots the price of a resource as units are traded.
I don't actually know the exact relation, but that has no effect on this demonstration.
I'm using f(x)=1.01^(0.5*x) here. A reader who knows the exact function can plug this in instead, and still reach the same conclusion: market work bad.

If you were to sell resources in the tiniest batches possible, you'd follow this curve exactly.
The current implementation of large transactions instead completely ignores how prices would be affected (as the entirety of the transaction is traded at the initial price), resulting in the wonkiness described in the OP.

With this specific growth curve, if 500 minerals were bought in small batches at a starting price of 1 energy pr. mineral, you'd pay 2217 energy (plus fees). [integrate 'Minerals' from 0 to 500]
Instead buying them in one batch, you pay only 500 energy.
Regardless of whether you buy in one or multiple batches, the price then ends up at 12.0322 energy/mineral
Selling back your minerals in small batches would then give you 2217 energy again (minus fees).
Seeling back your minerals in one batch instead yields you 6016 energy (minus fees).

Because large batches are not traded at the correct price, it means that trading in sufficiently large quantities allows you to completely bypass any market fee and effectively generate money by exploiting a poorly tested feature. Green and blue arrow should precisely follow the red growth curve, and so long as they deviate it will mean that at some point a moneyloop becomes possible. Less deviation means it takes larger transactions to create a moneyloop.

Again, the exact equation for how prices change does not matter, what matters is that the function is currently not applied correctly to large transactions. There is no problem with the smallest transactions, the problem is exclusively with larger transactions.

I have no problem with the ability to buy up minerals when noticing a low market price, and then hoard it until the price is higher to sell for profit. But this is very different.

@Blurb About treating it as several smaller transactions. Keep in mind then that it would need to show a price that isn't the same per unit for different quantities.

If what I described is not a problem, it's at least illogical right? If you sell and rebuy the same quantity over and over, why would the price get higher and higher after each transaction? The net market supply is the same, and that is what essentially decides the price. Is it because the market loses supply in energy credits? After trying the exploit in game, I see that this happens. I guess yes, in the real world, one single transaction could never be large enough to affect the market price so drastically so that you immediately can sell it back for more than you bought it for, which is what needs to be the case in the game too.

Yeah I don't know if that's the "tweak to the galactic market" (of questionable efficacy) in 2.2.2, but that sounds wonky too.
Are you sure it's not just AI nations using the market? I can't replicate that gradual price shift from selling and reselling goods.

 

[Dinkelman]

Yeah I totally get what you mean and how it works. I'm saying your solution is going to work for your described intents and purposes, but I think it's not necessarily the root of the problem. As you said, small transactions work without screwing things up as the price you pay will be very close to the price of the resource after the purchase, the market fee won't allow profiting from buying and then selling. Small transactions will make the curve more like a curve and less like dramatic steps. The price for large transactions is much lower than the price after the purchase. If small transactions can't be exploited, the fact is that it's the fluctuations being large enough that enables the exploit. If those huge fluctuations from single transactions are prevented, the exploit is solved as well.

What I wanted to explain, which I don't know if you understood, was that the "size" of a transaction is just relative. It is related to how much it causes the market price to change. As transactions scale up in size throughout the game, the prices need to become more inert, meaning resistant to change. The supply and demand of the galaxy grows, so the supply and demand of the market should grow with it. Otherwise, a simple 10k transaction from one empire will cause the price to get unreasonably inflated considering the size of the economy at the stage when 10k transactions are possible.

Making it work like I described will not only make the market have more natural price changes that are relative to the economy size, but it will fix the exploit by making "large" transactions work like normal size transactions in the same principle as what you describe. It will make the curve on your graph flatter, so the energy credits "stolen" from the market, meaning the green area below the curve, won't be as large. I don't know how I can explain it better. The thing is that an average sized transaction should always affect the price the same average amount. But the average sized transaction increases during a game.

 

[Jorgen_CAB]

Yeah I totally get what you mean and how it works. I'm saying your solution is going to work for your described intents and purposes, but I think it's not necessarily the root of the problem. As you said, small transactions work without screwing things up as you the price you pay will be very close to the price of the resource after the purchase, the market fee won't allow profiting from buying and then selling. Small transactions will make the curve more like a curve and less like dramatic steps. The price for large transactions is much lower than the price after the purchase. If small transactions can't be exploited, the fact is that it's the fluctuations being large enough that enables the exploit. If those huge fluctuations from single transactions are prevented, the exploit is solved as well.

What I wanted to explain, which I don't know if you understood, was that the "size" of a transaction is just relative. It is related to how much it causes the market price to change. As transactions scale up in size throughout the game, the prices need to become more inert, meaning resistant to change. The supply and demand of the galaxy grows, so the supply and demand of the market should grow with it. Otherwise, a simple 10k transaction from one empire will cause the price to get unreasonably inflated considering the size of the economy at the stage when 10k transactions are possible.

Making it work like I described will not only make the market have more natural price changes that are relative to the economy size, but it will fix the exploit by making "large" transactions work like normal size transactions in the same principle as what you describe. It will make the curve on your graph flatter, so the energy credits "stolen" from the market, meaning the green area below the curve, won't be as large. I don't know how I can explain it better. The thing is that an average sized transaction should always affect the price the same average amount. But the average sized transaction increases during a game.

Yes... I agree... this is one of the bigger flaws of not having a real supply and demand market which will see the growing scale of resources flowing though the system.

A transaction of 1000k in the early game is not the same as a transaction of 1000k in the late game and price resistance need to reflect this in proportion to the resources that flow through the empires monthly balance cheats.

 

[Tryor]

The market works fine, just the change of price dependig on market transactions is ridiculously high. I made a mod which just lower this value a lot and tested it on empire with 5% market fee (tradition + galactic market station + leader trait), cost of rebuying my resources after selling them was always higher then what I got.

 

[Jorgen_CAB]

The market works fine, just the change of price dependig on market transactions is ridiculously high. I made a mod which just lower this value a lot and tested it on empire with 5% market fee (tradition + galactic market station + leader trait), cost of rebuying my resources after selling them was always higher then what I got.

So... basically no price change at all in your games so then?!?

How does that make the market fine, you just made a permanent conversion rate of all resources pretty stable and calculable.

You can also use the monthly trade to make even larger transactions, you will break it eventually with large enough transactions.