Export company

[David]

Would you like to see the introduction of a new firm type "Export Company" in the game ?

Here are some preliminary ideas:

Its purpose will be exporting your products to overseas markets.

The firm can have the following functional units:
• Purchasing Unit
• Export Unit
• Inventory Unit

There are 3 possible ways to export your products:
1) Set up a wholly-owned overseas subsidiary to market and sell your products in an overseas market

2) Form a joint-venture with a local company to market and sell your products in an overseas market

3) Let local companies do the entire job of marketing and selling your products in an overseas market. You will just make your products available to them via your export company.


Each overseas country will have a competitiveness rating.

It will lists all major countries in the world, including the US, Germany, France, UK, China and etc.

Typically, the larger the market, the higher the competitiveness rating, which means tougher competition.


Any comments and feedback are welcome.

[thorstein]

While we have up to 10 cities in the game it's seems kidna useless.

If we need to increase the demand for some product we should have possibility to set up social campaign ads (f.e. "Eat vegetables").

But if you want just meddle with import/export it is better to start from editing existing problems.
It is weird for me that local socks factory in Berlin is more profitable than one in Bangladore (export focused)...

We need the trade company, which should have to:
1. build or upgrade airports and trucks (to downsize costs of global/local shipments) (main goal)
2. build private import/export ports (import like existing ports, export like you said) (secondary goal)



Also it will be great to improve manpower factor (unemployment, wage policy, product demand flows(ads, social campaigns, seasons based flows)

[counting]

I am just curious, is nationality going to play a role in this "export".

Will a city within part of the export nation be part of the export market?

Is the export nation be treated like a separate "nation market", just like a city's market, but much larger in scale?

[David]

I am just curious, is nationality going to play a role in this "export".

Will a city within part of the export nation be part of the export market?

Is the export nation be treated like a separate "nation market", just like a city's market, but much larger in scale?

The current gameplay model that we have been experimenting with put the player in the role of managing a small nation (assuming that the player is able to win elections, make his/her way from a business person to the president of nation.)

The nation will consist of a small number of cities, as in the current Capitalism Lab game.

In that sense, the export from all of the cities will be aggregated as the national export.

(Check out the preview screen about the new Nation report if you are interested: http://www.capitalismlab.com/forum/view ... =16&t=2551)

Anything that companies buy from seaports are thus import.

----------------------

With the above implementation in place, it might be possible to further enhance the simulation to include the following:

Trade Balance = Import - Export.

Sustained deficits in trade balance will lead to increases in the national debt.
Sustained surplus in trade balance will lead to increases in foreign exchange reserves.

This will potentially open new simulation possibilities like a floating currency for the nation.

With a floating currency, deficits in trade balance over a long period of time will lead to devaluation of the nation's currency and thus increase inflation.

But at the moment we haven't decided whether it will actually add to the gameplay by further complicating the simulation engine to this extent. Or we should just leave these details out and prevent it from becoming inaccessible.

Any feedback or suggestions are welcome.

[counting]

Currency system, hmm... that's a very broad question.

And what kind of floating exchange rate are we talking about? Without many fundamental financial institutions, foundations, and active forex market, I don't think it could be simulated well. And honestly in real world, it's more of a political issue than purely economic phenomena.

As for grouping cities to formed a "trade empire" like nation, that's a very interesting direction to take. Somehow reminded of me 7-kingdoms and Merchant republic in CK2. Are we moving from business simulation to RTS game now ??

[Nazka231]

If we don't implement a full currency system that will mean that sometimes you will have depression in different cities or at the opposite high spikes of inflation, that in both case cause damages in the economy. This leads to worst the case scenario with: high risks of a spiral of death in the first case and the formation of bubbles in the second case. Now well it's a game so it's ok if it happens and maybe its game mechanics limit that but with how things are the economy should behave like that.

In CapLab because the total amount of cities in a game is not very high, it's ok I guess but there is also the problem that with only one currency cities that are at the extremes (low wage rate so export is the best, and high wage rate so import is the best) won't quantify at the real value. Again I think it's minor for how the game is, but in reality, well like I said elsewhere Germany is eating all the cake of the EU for instance and the other countries can't do that much about that...

[counting]

Actually most top-down macroeconomic theories don't blend well (sometimes even inconsistent) with bottom-up microeconomics models. Before the computational and experimental economics can tested their compatibility, a lot of incompatible theories exist, and no-one can tell which are correct under what conditions. Recent researches have told us lots of theories are very limited in when and where they can be applied. It's even possible to design a theory without currency at all (actually a lot of classic theories don't), and still have emerging behavior like economy cycles. Inflation itself is more of an aggregated phenomena, and a lot of different types of inflation existed.

IMO, although financial foundations are important, the currency or floating exchange rate doesn't have to be implemented for game simulation to function. What level of realism are we trying to achieve?

[Nazka231]

Actually most top-down macroeconomic theories don't blend well (sometimes even inconsistent) with bottom-up microeconomics models. Before the computational and experimental economics can tested their compatibility, a lot of incompatible theories exist, and no-one can tell which are correct under what conditions. Recent researches have told us lots of theories are very limited in when and where they can be applied. It's even possible to design a theory without currency at all (actually a lot of classic theories don't), and still have emerging behavior like economy cycles. Inflation itself is more of an aggregated phenomena, and a lot of different types of inflation existed.

I am curious about that. If you have more info I will be glad to read them. I agree that there is different types of inflation. But the 2 main tools to control it is with the fed rate, and with fiscal policies. At least we can have the first one for now.

IMO, although financial foundations are important, the currency or floating exchange rate doesn't have to be implemented for game simulation to function. What level of realism are we trying to achieve?

If we simplify the real system that will mean we will cut and simplify things here and there which can create bad behaviors. But yes like I said it's just a game, nobody will scream because they have a big depression. And for how the game is right now it's ok to avoid too complex things. (Like if it was a MMO however I will definitely ask to have this implemented).

[counting]

Actually most top-down macroeconomic theories don't blend well (sometimes even inconsistent) with bottom-up microeconomics models. Before the computational and experimental economics can tested their compatibility, a lot of incompatible theories exist, and no-one can tell which are correct under what conditions. Recent researches have told us lots of theories are very limited in when and where they can be applied. It's even possible to design a theory without currency at all (actually a lot of classic theories don't), and still have emerging behavior like economy cycles. Inflation itself is more of an aggregated phenomena, and a lot of different types of inflation existed.

I am curious about that. If you have more info I will be glad to read them. I agree that there is different types of inflation. But the 2 main tools to control it is with the fed rate, and with fiscal policies. At least we can have the first one for now.

Which part? the incompatibility? limitation of theories? or macro structure without currency (note. what I meant currency here in monetary theory context is the specific entity carrying the functions of money within certain types of economic structure and scope)? the emergence of cycle based on simulation?

[Nazka231]

This part: "Recent researches have told us lots of theories are very limited in when and where they can be applied. It's even possible to design a theory without currency at all (actually a lot of classic theories don't), and still have emerging behavior like economy cycles."

If you have information about that, I will be glad to read them.