Chapters * Title * Contents * Introduction * Place * System * Design * Using * Future * Bibliography
Sections
* Using * Composite_Story * Behavior * Supply_and_Demand * Trade * Central * Externalities * Chicken * Monopolies * Geography * Money
Commodities, Monopolies and the Size of the Market
What do the game commodities of food, energy and machinery correspond to? What does it imply that players can trade units of
food without knowing anything more about it than that it's food? A player attacked these questions by asking "What does
'food' in the game mean?" That gave a lead in for me to talk about the difference between generic items--where you can know
what you're getting just by naming it, and unique items--where you have to look at every item itself. I made an analogy between
the simplification in the simulation (all kinds of food -> food) and the simplification made possible by having
standardized items (all sorts of possible types wheat flour -> standard wheat flour). Commodities make the market simpler to
use.
Is there a down side to that simplification? I expected a comment about a loss of diversity. However, one student then brought
up the issue of monopoly. If only one company can take advantage of the cognitive simplification (when I am hungry--I can just
buy "food"), then they can charge higher prices. This issue was a natural lead in to the second thing you need in order to
have a real commodity--many suppliers.
In MarketPlace, with its small number of suppliers, the big difference is between markets for an item that have one supplier
and markets that have more. Monopoly and oligopoly (a market dominated by a small number of companies) are well illustrated by
this difference in pricing power.
Greg Kimberly/gregkimb@gak.com