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[TrashMan]

Does anyone else find the market stability mechanic to be wonky?

Why do stable planets have high prices and unstable ones low prices? Adding a trade center to a location (+10 stability) basically means that a major trading location has horrible prices.

I just don't get this. Wouldn't common logic dictate that a stable market would have stable prices (tending towards the median), while unstable ones would have prices fluctuating wildly?

[Histidine]

It's my impression that high-stability markets are intended to be analogous to developed nations and low-stability ones to not-developed nations, which would explain why higher stability = higher prices. But some stability-reducing things that can happen in game should logically raise prices (smuggling by buying from the black market, for one).

I think the primary problem is that supply and demand don't seem to exert a noticeable effect on prices.

[BHunterSEAL]

I actually like the stability system, I think it adds an interesting dynamic beyond "buy where it's made, sell where it's used." It's also pretty neat that stability is a condition that changes over time, and that player / NPC actions (and/or lack thereof) can impact it in some ways. As with the posters above, I would flip the magnitude of stability and supply / demand impacts on price and reverse the order in which they are applied. Stability should scale the 'base' price prior to supply/demand adjustments.

There's a well-documented and rather topical real-world analogy to illustrate the underlying economic rationale: the world price of oil and debate over U.S. exports.  The cost to ship crude from Corpus Christi, TX to a refinery on the East Coast is $5-$9/bbl because of the Jones Act, which mandates that all coastal commerce be carried out in U.S.-owned, -built and -crewed ships. A foreign tanker would charge about $1.50-$2.50/bbl for the same trip; that markup is a cost attributable to the regulatory burden that reduces trading profits in a "high-stability" market.

That said, $6 is just over 10% of today's price - and only 5% of where crude was trading in July. The 50% drop in crude over the past 6 months was entirely driven by supply/demand dynamics, not regulatory arbitrage. I can see how massive instability could drive major price movement but I would expect that to be reflected in the fundamentals of a planet facing war or famine. Either way, I think the stability scalar should be baked into market prices, not applied on top. For example, the Jones Act 'stability premium' has declined lately in part because a larger share of domestic crude production is being shipped via rail and pipeline; increased tanker availability means lower domestic shipping rates. With no change in non-U.S. freight costs, oil producers abroad were forced to reduce their selling price to remain competitive with U.S. supply--resulting in a narrowing of the Brent-WTI spread.

So, ideally it'd be good to see bid / ask prices on planets reflect the stability of their major trading partners. I've quite often found myself on planets or even in sectors with nonexistent trading opportunities.

[Alex]

It's my impression that high-stability markets are intended to be analogous to developed nations and low-stability ones to not-developed nations, which would explain why higher stability = higher prices. But some stability-reducing things that can happen in game should logically raise prices (smuggling by buying from the black market, for one).

Right, more or less.

I think the primary problem is that supply and demand don't seem to exert a noticeable effect on prices.

The reason it's not noticeable is because the simulation stabilizes at a certain point where prices are more or less uniform, but the point where it stabilizes very much depends on supply and demand. Where it will become noticeable is when there are disruptions to the system, but there's not an awful lot that does that now.

... I would flip the magnitude of stability and supply / demand impacts on price and reverse the order in which they are applied. Stability should scale the 'base' price prior to supply/demand adjustments.

The order wouldn't make a difference here as both are multipliers.

So, ideally it'd be good to see bid / ask prices on planets reflect the stability of their major trading partners. I've quite often found myself on planets or even in sectors with nonexistent trading opportunities.

They do, actually! Prices stabilize at a point where import/export is no longer profitable, which factors in the distance to trading partners and a measure of how risky the various trade lanes are.

[TrashMan]

Well, in less developed places there may be lower regulations (and probably lower tariffs), but stability = ALWAYS higher prices is just not something that makes sense to me.

Are you seriously telling me that if I buy a PC in the US it's going to be more expensive than if I buy the same PC in some unstable country?
I get it that simulating proper economy is extreemly difficult, it's just..redicolous.

A stable, prosperous system has 300% prices for items and high tariffs... a backwater, pirate-infested world has prices that are 60% of normal price and no tariffs??? WTF?
You'd think that vast markets and trading centers with many competitors would drive prices down.

[Alex]

Generally speaking, stability doesn't have much of an impact on the actual prices you see. For example, if you've got two markets next to each other, one stable and one unstable, and they both have demand for, say, luxury goods - the luxury goods prices on both markets will be very similar. The difference is that the high-stability market will have more of its demand met.

To explain why that is: the average consumer on a high-stability market is able to pay more (this being reflected in the base price), thus, more of the population is able to satisfy their demand, while on the low-stability market, only a small percentage near the top will be able to do so.

The prices on both markets will roughly match because the simulation will, behind the scenes, try to ship goods to make the most profit - if one market's price was higher, then a supplier of luxury goods would sell to that market until the price there went down enough due to demand being met.


An exception to this is when there was a recent stability change - in that case, supply/demand will take up to a few months to catch up to the suddenly-changed purchasing power of market. Which makes sense, as we're talking about the economy adjusting to a disruption, which would hardly be instant.

Adding a trade center to a location (+10 stability) basically means that a major trading location has horrible prices.

... and that sounds like that's what's going on here. However, I should note that this "+10 stability trade center" is either hypothetical or something from a mod (and, wow, it sounds a bit... unbalanced). Further, the prices aren't "horrible", they're just high. That can be good if you want to sell there, and it will stabilize eventually in any case.


(Btw: it's "ridiculous".)

[goduranus]

I think the stability-price relationship shouldn't have been explained in terms of "higher prices" it sounds like high stability leads to more expansive demand curve that's higher or further to the right, though how to explain in layman's terms?

[leonatus]

Does anyone else find the market stability mechanic to be wonky?

Why do stable planets have high prices and unstable ones low prices? Adding a trade center to a location (+10 stability) basically means that a major trading location has horrible prices.

I just don't get this. Wouldn't common logic dictate that a stable market would have stable prices (tending towards the median), while unstable ones would have prices fluctuating wildly?

In all honesty, I find it amazing that you even pay attention to these things. While I totally enjoy trading in these kind of games (X, Freelancer) it's been clear to me that in Star Sector it's just not viable. The in-game restrictions are too severe for anything but food-shortage events. Furthermore this is apparently works-as-intended. Trading isn't supposed to be effective for monay making. Hope I read that wrong, though. Trading and mining would certainly spice up the incessant bounty farming.


Leo



Leo