Spending in Local Prices

[greywulfos]

I like the local price system a lot - it's interesting for creating the kind of regional divides we see in most countries to this day. However, currently, there's one really crucial flaw with it: if the local price of an input good is more expensive than market price, it seems that the extra money the building spends goes into the void?

This really unfairly taxes the GDP growth of countries that, for instance, have both coal and iron states but don't have a single coal and iron state - both buildings are less productive but the extra money they spend on input goods does not actually go back into the economy in any way.

If local price is meant to simulate the cost of transporting goods, then maybe there should actually be pops who profit from that overhead? This could, of course, be a problem for the game's performance, but I'd like to know if it's at least been looked into.

 

[VineFynn]

I like the local price system a lot - it's interesting for creating the kind of regional divides we see in most countries to this day. However, currently, there's one really crucial flaw with it: if the local price of an input good is more expensive than market price, it seems that the extra money the building spends goes into the void?

This really unfairly taxes the GDP growth of countries that, for instance, have both coal and iron states but don't have a single coal and iron state - both buildings are less productive but the extra money they spend on input goods does not actually go back into the economy in any way.

If local price is meant to simulate the cost of transporting goods, then maybe there should actually be pops who profit from that overhead? This could, of course, be a problem for the game's performance, but I'd like to know if it's at least been looked into.

Devs are on record saying money going into the void does not matter.

 

[yurcick]

I'd like to point out several things.
First, you're right that MAPI destroys a significant amount of money and it would make sense that it would get back to the economy in some way. There actually exist computationally-lightweight ways to do that, read here.

Second, money destruction is not very rare in the game. The very act of resolving supply/demand when the supply is lower leads to money destruction (and when the supply is higher — to money creation) every week as well, in volumes comparable to MAPI losses. For example, if there's an automobile deficit, and the factory produces 10 cars and consumers get 20 cars, so the price is 175, then the economy overall creates £1750 and destroys £3500, to a significant net loss.

Third, devs said that they don't see a problem with MAPI money destruction, "because the game economy is not a closed loop" (probably meaning something along the lines of my previous paragraph). This might have been bad wording on their part and they could have meant something less definitive and generic (because it would still make sense to minimize the volume of unaccounted money magic even if the system is designed the way that some of it will always happen). However, what was said was said.

Fourth, they still are going to revise internal trade and touch this topic along with external trade some time in the next macroiteration.

The discussion with the devs on paragraphs 3 and 4 can be found here.

 

[greywulfos]

I'd like to point out several things.
First, you're right that MAPI destroys a significant amount of money and it would make sense that it would get back to the economy in some way. There actually exist computationally-lightweight ways to do that, read here.

Second, money destruction is not very rare in the game. The very act of resolving supply/demand when the supply is lower leads to money destruction (and when the supply is higher — to money creation) every week as well, in volumes comparable to MAPI losses. For example, if there's an automobile deficit, and the factory produces 10 cars and consumers get 20 cars, so the price is 175, then the economy overall creates £1750 and destroys £3500, to a significant net loss.

Third, devs said that they don't see a problem with MAPI money destruction, "because the game economy is not a closed loop" (probably meaning something along the lines of my previous paragraph). This might have been bad wording on their part and they could have meant something less definitive and generic (because it would still make sense to minimize the volume of unaccounted money magic even if the system is designed the way that some of it will always happen). However, what was said was said.

Fourth, they still are going to revise internal trade and touch this topic along with external trade some time in the next macroiteration.

The discussion with the devs on paragraphs 3 and 4 can be found here.

I think the thing that specifically bugs me about money loss through MAPI moreso than money loss through input shortages is that MAPI affects certain countries far more severely than others. You can reasonably expect any country to have money lost through supply shortages, but not every country happens to have a convenient coal and steel province for getting around MAPI.

 

[TheFlemishDuck]

I like the local price system a lot - it's interesting for creating the kind of regional divides we see in most countries to this day. However, currently, there's one really crucial flaw with it: if the local price of an input good is more expensive than market price, it seems that the extra money the building spends goes into the void?

This really unfairly taxes the GDP growth of countries that, for instance, have both coal and iron states but don't have a single coal and iron state - both buildings are less productive but the extra money they spend on input goods does not actually go back into the economy in any way.

If local price is meant to simulate the cost of transporting goods, then maybe there should actually be pops who profit from that overhead? This could, of course, be a problem for the game's performance, but I'd like to know if it's at least been looked into.

I think it's fairly simple. imho, MAPI penalty's should diminish,or be nullified for industry "that is paying for (rail) transport". A similar option could exist for water bound transport, versus simple local/road distribution.

Picture it like a option via production method button to work with rail connection that you could have on any industry, selectively even, whereas currently that exists for plantations, mines and forestry but those rail connections currently reduce labor as consequence. Selecting that option would default the price that the industry pays to the market price rather than the local price albeit it would have to pay the associated cost of transport. Aka it's effects could be 100% MAPI for the input and/or output goods for the factory but consume x amount of transportation to get that effect.

In such a case, there wouldn't be a MAPI loss (or much of it), but there would be still an extra price to pay: the transportation costs. It would simply be that taking the choice would have diminishing if not negative benefit if the price of transportation were very high locally, so that you would need to build enough railroads in the province to make it interesting and have enough industries making use of it, but the money would still be going somewhere and that would be in the pockets of the transportation providers. And from another aspect, where say youre producing clothes for the local market in a province that has all the requisite resources you just wouldn't activate the option since most if not everything would be sold locally and you could forego on paying additional and potentially expensive transport.

That way, you would have a choice early on as how extensive you go on railroads and even for what industry's. MAPI would represent a sort of "default transport cost" between two provinces and the PM a way to go around the MAPI penalty with railroads and such according to availabillety. It would be a way to represent transportation in a deeper way, albeit of that nature that transportation cost would kinda be determined by the infrastructure and transportation availabillety in the province of the sender and in the province of the receiver respectively withought counting the distance or the amount of provinces that are between those 2 provinces. But that would be a fairly acceptable system imho, since a fair amount of the cost of transport in that time likely was in the loading and offloading and such, once the train was on the move in having to drive a few hours more likely didn't add so much to the total cost, in fact wether the rail infrastructure locally would have been overused or not to the effect of potential delays likely played more into the cost.

So what this practically boils down to imho is that there needs to be a modifier that one can attach to a production method that deminishes the MAPI penalty that a local industry is subjected to, rather than that MAPI modifiers only exist trough the tech tree. Possibly one on the input and output side of production. So if that you choice "rail import" PM for an industry the MAPi penalty for the imput good is deminished or resets to market price, and the same might be true for exporting/selling youre goods at overal market price rather than just local price. So say that you had a coal mine in province A, a iron mine in province B and a steel mill in province C then the steel mill would be able to buy withought MAPI loss when it's import PM is set to rail (and pays additional volume of local transport) and when the iron and coal mines export option would be set for rail aswell, creating more transport demand in their local provinces aswell. The only advantage a country that has provinces that have both iron and coal would have is that it would not need to build railroads to be able to cheaply transport and make use of these raw resources both in the sending and receiving province, since they could use it all locally.

I would then similarly make ports produce transportation aswell, the same "pay for transport" pm could make use of sea or river transportation too albeit that it would have limitations aka a resource industry sending its stuff away arguably by boats whereas the receiver is getting it by rail. Can't be helped, we won't never be able to solve the issue that distances cant be reasonably calculated performance wise for the sake of determining transportation cost, but in this case there would be less of a MAPI loss where a player manages to provide ample regional transportation infrastructure.