What about the economy?! Intro part 7

This post is the seventh part in a series called “introduction to economics”. I recommend that you go back and read the previous posts in the series if you’re unfamiliar with economics as a subject. 

As of my last post we’re finally done with going through a basic definition of what economics is: the study of production, consumption, and distribution of goods and services. That’s all well and dandy but now, we’re instead faced with an immediate follow up question – what is an economy? The definition for economics covers all the activities and behaviors associated with goods and services but not the space or domain  in which economic agents operate. 

Economy comes from a Greek word (oikonomía) which basically translates to ‘management of a household’. The modern use of the word far extends beyond the scope of a single household though as it is used to refer to the economic performance of a myriad of entities. Individuals have an economy, firms have an economy, states, nations, and games (!) also have an economy. Just think of all the times you’ve heard the phrase: “that’s bad/good for the economy”. 

The most greek-looking thing I could find.

More formally, an economy can be defined as ‘the production, consumption, and distribution of goods and services under scarcity’. As you might have noticed, this is the definition for economics that I’ve used previously with the addition of one word: scarcity

Scarcity is the basic fact of life that there is a finite amount of resources which can be used to produce a limited amount of goods and services. There will only ever be that many trees that we can cut down to make things made out of wood. There is a finite amount of precious metals in the earth that we can dig up and so on. Thus, an economy operates in a domain or space defined by scarcity of resources.

With scarcity, consumption becomes a competition to see who is prepared to pay the most to acquire goods and services. By consuming a good that was produced using scarce resources I reduce the amount available to others which might in turn raise the price of the good as it is now harder to come by.

If there was no scarcity then we, as a society, could always produce the desired amount of goods at any point in time as there would be an infinite supply of resources. There would be no conflict of interest between individuals in their consumption – anyone could theoretically get as much as they want at all times. 

Are dice in a game a scarce resource?

Do all board games have an economy? To answer this question we need to determine two things: do all board games contain goods and do they have scarcity of resources? As you might recall the definition for a good is something that provides utility to individuals. A board game itself is a good, but in terms of gameplay games generally have a win condition that needs to be satisfied. 

Assuming that players actually want to win the game then they will strive to acquire anything that will help them win. Therefore, all resources in a game that help a player win, provide utility and should be classified as goods.

With this definition I would say that all the games that I know of contain goods, and I struggle to think of a theoretical design where no goods can be said to be present at all. It would have to be a game without things that provide utility to players. Maybe something without a win condition? Although, could something without a win condition even be called a game? I’ll leave it up to you to decide. 

Trains are scarce.

Moving on, in terms of scarcity of resources I would say that it comes naturally for any game to have some sort of scarcity. Just like in the real world a system without scarcity holds no conflict of interest between players and therefore no problem to be solved. In a game the problem to be solved is deciding a winner.

Without scarcity players could immediately acquire all resources that they need in order to win, the game would most likely end on the first turn of play. Again: is that even a game at all? I certainly don’t think so.

All games have an economy: they contain goods, and operate under the assumption of scarcity of resources. Tweaking the utility provided by the resources in a game along with managing the scarcity of the same resources is an inherent part of any game design. By extension, how scarce and valuable you make resources in a design is an extremely important part of making a game fun and enjoyable.

My knee-jerk reaction for how to go about it is to make resources that are relatively valuable more scarce – otherwise players will just never pursue the less valuable resources. But I’m wondering: does that always have to be the case? 

Challenge: do more valuable resources in a game always have to be more scarce? Why? Why not? I would love to hear your thoughts on the subject. 

2 Comments on “What about the economy?! Intro part 7

  1. I was wondering: Is “The Mind” a game without resources?

    Concerning your main question: I think it comes down to what “more valuable” means. If different resources do different things, it is reasonable that the more scarce resources become the bottleneck. Thus the scarcity itself makes the resource more valuable. When there is an abundance of sheep in Catan, they are worth less. When there is a shortage, they are worth more. They are still (almost) as necessary as other resources, but the scarcity affects the value on the market.

    A fictive counterexample would be when some resource _always_ can be traded for victory points, but a game that has an abundance of such resources is broken.

    Another fictive example: Imagine a version of 7 Wonders where all cards producing refined goods produce 2 refined goods of different kinds. The refined goods are arguably more worth than the non-refined resources, but in this alternative game they would probably be worth less – because they would not be a bottleneck.

    1. About the mind: I don’t think so? The cards you hold should be considered a scarce resource in my book – in my experience playing that game cards with extreme values hold more utility for the players. Having a 1 on hand guarantees that you can play it without losing.

      I was thinking of more valueable in the economic sense of ‘generates more utility upon consumption’. I would say that increases scarcity can increase the value of resource if it also provides more utility than it’s alternatives – what’s the point of chasing after rare resource if other resources will net me more utility? I love that you bring up Catan because I think it does a brilliant job of shifting the scarcity of resources from game to game: you don’t know what resource is going to be more scarce at the start of the game. But Catan also does an excellent job of invoking utility in all of its resources – they all have their uses even if they’re balanced in their relative values.

      I would agree that a game where a resource can be traded for VP and the same resource is abundant will most likely broken. Players would have no incentive to explore other strategies when there is an apparent dominant strategy.

      Been a long time since I played 7 wonders so I’m gonna have to pass on that one 🙂

      Thanks for commenting!

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