Equipment and Economics in RPG’s
Let’s face it, RPG’s economies are usually either busted, or abstracted to a point where other problems arise. Generally speaking economics in RPG’s works in one of the following three ways:
Money is it’s own thing, and creates a second source of power for the characters. This involved monetary accounting.
Money is traded for character ability on a fixed ratio.
Money is an abstract ability. Powerful items must be obtained through some sort of character build, and one monetary ability is simply another way to solve problems.
Money is traded for character ability on a fixed ratio.
Each of these suffers from sometimes serious flaws.
Money is it’s own thing
This is the system featured in Dungeons and Dragons and a few other games. With this system wealth is accumulated either in the form of money or as magic items. This of course means that the system needs to be balanced with actual economics, which it never is. Consider the following:
In D&D 3.5E a suit of Full Plate requires half it’s weight in Gold.
No one can look at that fact and accept that as being rational. Gold is presented in source material as coveted and precious, it is given exchange values of $100 to $300 dollars. Commoners are said t be paid 1/100 that a day. Plate Armor that expensive simply would never have existed. Consider the alternative faced before a king:
We can increase the effectiveness of ten troops 40% costing use 300 pounds of gold and , or we can increase the effectiveness of 100 troop by 20% for the same value. The decision is obvious, so unless plate is a concoction of a corrupt military industrial complex, then it’s an unrealistic element.
You may be thinking that this is specific to this specific thing in Dungeons and Dragons. It’s not, it’s all over the place. A system with this form of pricing needs a way of crafting the items that reflects the prices (more on that later). Given the listed payoff for adventuring in D&D, there should be many many adventurers. D&D games are easy to lampoon ala Order of the Stick, because the absurdity of the rules is literally in the rules.
Money is Character Points
I first saw this in GURPS. But GURPS is unique in that it has all three of these systems (and to varying degrees simultaneously), earlier versions of D&D also used something like this in the form of Money = XP.
Under this system, when you get somethings, you have to pay for it with your Character Points (whatever that is). This is often awkwardly mixed with Money is an Abstract Ability. You want to start with the Hammer of Doom, cool that costs X character points that can not be spent in other ways now. That’s fine. But what happens if you find the Hammer of Doom lying on the ground somewhere? Well, apparently in order to pick it up and keep it (as opposed to temporarily use it) you now have to spend character points. Since you’ve probably already spent them all, the system probably has a method for letting you “borrow” them from future experience points.
What is the effect of this on play? Two bad things happen here. The first is that the rush of finding the powerful item has been completely stripped, and the second is that if the item isn’t kept there now needs to be narrative contrivance to remove it from play.
Of course theres a quick fix that some people employ. Simply give the Player who keeps the item more experience for keeping that item. OF course then there is the issue of party balance, so the GM feels pressure to grant similar boons to the other players.
Money is an Abstract Ability
This system is featured in the World of Darkness games and most elegantly in Fate. Under such a system the set of equipment one can purchase with the money is typically pretty limited, but the Resource ability lets you throw lavish parties, bribe people, temporarily gain powerful equipment, etc…
When you want a powerful piece of equipment an entirely separate set of rules is used. Now you go back to Money is Character Points (or Feats or Extras or whatever), or you get really abstract and make using that item based on your Resource ability rather than the ability it would intuitively be tied to.
Okay, things aren’t that bad
I may be over emphasizing the flaws here. The fact is that thousands of games are played every day where the Equipment and economy rules are deemed irrelevant and so tangental to play that no one has ever felt any fuss about it. So to clarify, all three of the systems above are completely workable, and usually won’t interfere with play in a meaningful way. Nonetheless, they all suffer the risk of breaking immersion or unbalancing play.
The Labor Theory of Value
One really easy way to bring a game economy into reality is to look at some actual economics. One law is The Labor Theory of Value, which I don’t thing is accurate from a general economic theory standpoint, but which does act as a good proxy for prices. Let’s assume that a person with no skill makes $10 an hour. We can assume then that a base skill check 0+1d20 for example represents the value a person can produce in an hour. In this case that happens to be 10 units of value. So a laborer creates $1*Skill in labor value, and we’ll say that labor value is 25% of an items value. Now, looking at this and realizing that some masters in their field make $100 an hour tells us that either the master is has ten times the ability of the untrained person, or that the distribution is non-linear. To handle this you can pay labor a premium based on minimum skill required to make an item. To understand, no matter how long the average fast food worker sat in front of a computer that person would never produce a working computer program (at least not without first raising the skill). Assuming that a skill can go to 20 (thus averaging 30), you can account for minimum skill required to make something. For example, you could pay 2*Minimum Skill + Skill + Skill Check. Again this tells you how much value was created in one hour. So if we assume that a master craftsman is making a suit of armor that costs $10,000 we can assert things like it requires $2,500 in labor value. We can further decide things like it has a minimum skill of 18 and the laborer has a 20 skill, and they average a roll of 10, we know they will typically produce $66 worth of value an hour, meaning it will take this laborer a week to make this suit of armor. If the armor instead costs $150,000 (an estimate of D20 plate), then instead it will take four years if she is working alone.
Why this works
To understand why this works, and by extension why the Labor Theory of Value works as a proxy measure for prices, consider this: If you have a choice of skill to develop, and a choice of what to make, as a maximally rational agent you will choose the one with the highest payoff. So if you are an armorer, and making a suit of Chain takes one week, and making a suit of Plate takes two weeks, but the market is paying ten times for plate as it is for chain, you will make nothing but Plate. Since all the other armorers are going to do the same thing the market will flood with plate armor suppressing the price of armor. Eventually the value of plate will fall enough that armorers will start making chain again. What is the point where that switch happens? When the time a laborer has to spend is proportional to the difference in price.
How does this tie in with Money Mechanics
This way of measuring equipment produces a reality check to anything that a person can do in the game. Assume any action produces a similar value. Jumping over a pit doesn’t seem like something with monetary value, but nonetheless it can be thought of as a combination of skill and labor. How much is magic worth, and what does it cost? Figure it out the same way. What this will end up telling you is what your society will look like. If apprentice magicians can earn a small pile of gold for their talents then soon everyone will want to be a mage. When that happens the mages will compete on price suppressing the cost of magic until equilibrium is restored. If that means that magic will be too cheap in your game, then magic is too easy in your game.
Finally, this tells us what sorts of rewards are reasonable for a particular thing a player is going to do. The reward can be calculated relative to haw difficult the challenge is and how long it’s expected to take + A Risk Premium. You are going to face DC 10 challenges for presumptively 10 hours? That’s $100 + a Risk premium.
So now, crafting, adventuring, magic, and anything else you want your character to do have a way of automatically balancing against each other. Thus, money mechanics solved.