I often have trouble getting people to want to take out a bond or a loan with me. What are good recommended margins for bonds and loans? Right now I have 7.5 return on bonds after 2 days and a 6 percent return on loans after 1 day. But nobody is taking either. So what gives?
External link →On Tiger both percentages are typically well below 5%. We do work with those systems a lot though, so we have a big audience for them and train the audience to use them.
should only cost what it takes to replace the good (which should go down with efficiency modules and excess work stations
It would be better if the modules were not factored into the price, and prices were not lowered. Because continually lowering prices benefits long term players, by making markets unprofitable for new ones. You create a monopoly this way. Once you get the modules, you should create jobs with excess wealth. You do this by paying more for inputs than they're worth, so players will transport them too you. Also, by building big ashlar mansions which consume a lot of resources. Prices in a healthy economy should go up, not down.
That's where government should come into play to find solutions, for example with subsidies paid by the very taxes the long-term players pay. Of course no player itself will want to loose out on profits when they can make much more by just lowering their prices a bit so that others can't keep up but they still have a larger profit margin and the others.
Loans and bonds just seem really risky because there is a chance a player will leave. You can set reputation checks in contracts which can be good. I've seen servers have central banks through the government which seemed to work and I have also seen very punitive banking laws which basically gave loanies land/assets to loaner. Short of a non risky regulatory environment I would keep margins high and just market your services. Or maybe invest all that excess cash you have into buying vehicles to rent out or skill houses (is renting in yet?)
Yes, that's something that needs to be fixed by governance. On Tiger in such cases the Federal Bank reimburses the private bank loaning the money and will sue for getting back the loan, that can include convictions of land loss, e.g. seizing, then done by government. Works similar to collateral, just more security for the players loaning, so they dont have to deal with it. Of course you can keep the courts out and just do it via government directly.
Yes, renting is in, but only partially yet.
Undercutting is a valid strategy in the real world, because products can be marketed to differentiate themselves from similar products. Features such as, different colors, "heavy duty", lighter construction, faster, etc... But there is no marketing in Eco, and everyone sells the same medium rug. There is no market segmentation which makes one medium rug worth more than another.
Price wars kill the servers because, in order to make prices ever cheaper, the producer must cut job opportunities out of the marketplace to become more efficient. For example, eating scavenged free foods eliminates buying foods from the chef skills, therefore cutting chef labor from participating in the economy. This is why undercutting is a failed strategy long term.
In a healthy economy, prices should be slowly rising. Falling prices is the sign of a recession. Long term drop in prices due to module efficiency, competition price wars, and reduction of labor costs, creates a depression.
To be clear, I'm not advocating that competitors shouldn't compete on price/location/selection. But predatory pricing comes into play once modules are factored into pricing calculations for a retail price. Ideally, for this simulation, the product producers should agree that the minimum price a product should be priced, is based off the inputs of the recipe. The addition of modules to improve efficiency is kept as profit, and not to be used to prevent market competition.
That might be very valid, but the vast majority of participants in the economy in Eco do not agree to that and is even willing to sell at a loss, just to undercut. Hence, some regulation is required to make it work.
How do you regulate prices with the law system?
You can set minimum and maximum prices, if those are not kept, sales don't work.
Are the terms on Tiger typically as short as 24-48 hours?
No, more three to five days, government bonds up to 7.
Right, but $4 is a lot easier to earn today than a Nickle was then
You're just making this up. In what year was gas a nickel? You have no idea what it was like to earn a living back then. But nevermind, this point is moot, as it has absolutely nothing to do with Eco.
IDK why you linked that definition of natural monopoly. I don't know how many football teams your city has but, everyone else has 1 pro team. I guess since I didn't state that I was talking about pro teams, you misunderstood.
For soccer there is cities having two pro teams, even playing in the same league :D
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