Economics | Board Games
Supply, Demand and Animal Spirits: Making a Market in a Board Game
This is a bit of a follow-up to a piece I wrote about my re-design of Robert Simpson’s cult classic Supremacy. In that article, I talked about how I wanted to build a believable ‘market’ mechanism within the game — a purely analogue system which would give players a dynamic price for the goods which their nations were producing.
In case you missed that blog, here’s the quick low-down. In my re-design, players are vying for, much like in Risk or Diplomacy, hegemony over the modern world. To do so, they have to build a formidable economic engine, create a flexible military and deploy some diplomatic nous to navigate the geopolitical landscape. Players need to manage the game’s three critical resources: oil (which allows you move your forces around the world), minerals (which let you summon more soldiers and devastating nuclear missiles) and grain (used to ‘pay’ for your territories, at a 1:1 ratio), all of which can be found and produced from the different regions around the world.
This is a grandiose way of saying that in a typical game of Supremacy, you’ll be pushing little armies and fleets around on a map, forming tenuous alliances before ruthlessly back-stabbing your neighbors and trying to make a quick buck by selling off your country’s natural resources when the price is just right.
The first two things I just mentioned were fairly easy to design; there are a plethora of interesting games which I could draw upon for combat design. Any game with direct conflict and trading implies some form of player-interaction. The tricky part was working out what my market was going to look like. Players could produce resources, sell them to the market and buy them from the market. I was determined to keep in the ‘spirit’ of the original game, so my only limitation was to use the neat price track on the top of the board, telling players of the going rate for those three vital resources.
Essentially, the problem I faced was one of prices. How could I make my analogue market ‘read’ the game state and determine the price of each resource? Moreover, how would the game understand the various economic interactions taking place without a complicated resolution system or some computer-based gimmick?
My initial draft invoked the idea of competition: the number of firms fighting to produce a given good. It was obvious from the start that the mode of ‘perfect’ competition was a poor framework for Supremacy. For instance, if the player who controlled the majority of the game’s grain supply decided not produce anything during a round, intuitively, that would have some sort of impact on the price of grain as supply falls drastically. One of the key principles of perfect competition, that individual suppliers cannot affect the market price, didn’t make any sense in the context of a game about hegemony and power struggles.
In this light, I introduced the idea of oligopoly being the dominant form of market competition in Supremacy. In this type of imperfect competition, there would be two or more suppliers (in the game’s case, the suppliers are the players) who each have the capability to influence the others and the market price. In order to determine the number of ‘firms’ operating in a given resource’s market, you would count the number of resource cards played by each player (each territory has a card denoting the type and amount of a resource located there) and see which was the most common type.
What is the relationship between the number of cards played and price? Here, I fell back on some classic game theory by using the logic of the ‘Prisoner’s Dilemma’. In a simple scenario, firms can either ‘collude’ (by keeping prices high) or ‘compete’ by slashing prices. If a firm decides to compete, they will take on a greater market share (consumers love lower prices) and make greater profits, at the expense of the firms who have higher prices. If one firm knows all the other firms are keeping prices high, they will be best responding by ‘competing’. Likewise, if they know other firms will be cutting prices, they would also best respond by enacting price cuts of their own to maintain their market share. In this case, we could say that ‘competing’ is a dominant strategy, a Nash equilibrium if you will— the point where players are best responding given another’s choice. If they all opt to ‘collude’, we might say that this is the Pareto optimal outcome — they can’t improve their own profits without harming the profits of the other firms.
Thematically, this meant that large markets with lots of firms might be more likely to see a ‘competing’ spiral as the opportunities for any one firm to break away are increased. So, when counting the resource cards to find the most common type, the most populous market would see prices fall and small markets (who might be able to successfully collude more easily) will see prices rise.
There was a lot to like about this system, it allowed for dynamic price movements and added an interesting mini-game of trying to build up a reserve of resources before selling them off en-masse for big profits. Alas, it suffered a critical weakness, it was far too slow. Counting those resource cards every round became excessively tedious and fiddly, wasting precious minutes of game time. Worse still, for those not acquainted with intermediate microeconomics, it made the game slightly more opaque, just that little more difficult to understand and grasp.
In a more general sense however, it was also a system that seemed somewhat disconnected. When players shipped off goods to the ‘market’, where did they go? Who was buying them? When players purchased additional resources from the market, where were these resources coming from? In terms of theme, you could argue that players were importing and exporting to each other, but it certainly didn’t feel like that. There was what might be described as a ‘ludonarrative dissonance’, the game’s market mechanic didn’t feel like you were buying and selling to a real international goods market.
Going back to the drawing board, I returned to one of the most influential ideas in economic theory: supply and demand. Intuitive and easy to grasp, we can think of it in graphical form:
One of the key problems with the ‘competition’ system was that it was wholly supply-side focussed, and players in Supremacy are both suppliers and demanders. When players chose what cards they wanted to play, they would be conveying what they wanted to supply to the market, not necessarily what they demanded. The demand component would be shown by each player ‘buying’ additional resources at market price. Put simply, the old market mechanism was only telling half of the story.
In some respects, markets are like a giant calculator. They see what people are demanding, they see what people are supplying and then through gradual price adjustment (or, as Adam Smith fans like to call it, the ‘invisible hand’) a market price is reached where the amount people are willing to buy is equal to the amount people are willing to sell; supply equals demand. All I needed to do then was integrate player’s demands into the calculation and we would have a far tighter and more realistic system.
Of course, this is easier said than done. If counting up the number of resource cards played was awkward, then trying to factor in how many units were bought and sold would take the game to a total meltdown! Thankfully there was an elegant solution to this conundrum, and it came in the form of little wooden discs shipped from Germany.
If you add up the total number of resources listed on the resource cards, a total of 53 resources of a given type could be produced at any time. First, I represented each of these 159 resources with a small disc (yellow for minerals, green for grain and pink for oil) and placed these in a ‘supply’ box close to the board. While a disc is in this box it represents a resource which has the potential to be extracted, but is otherwise worthless. When a player plays a resource card to gain the resources listed on it, they take the corresponding discs from the supply and add them to their player board. So far, so good.
Here’s the twist: when a player decides to sell a resource to the market, they place it in a separate ‘market’ box at the side of the board. This represents a pool of all the exported goods in the system at a given time. What happens when you buy a good from the market? Yup, you guessed it, you take it from the market box if, and only if, there’s a disc there corresponding to the resource which you want to buy. This went a long way to resolving the dissonance which players experienced with the market. Now, it was clear just how much was being exported and imported within Supremacy’s closed economy.
To set prices, we simply follow the logic of supply and demand. After everyone has finished buying and selling, we check the market box. If any number of discs of one resource type remain in the box, we can say that there was excess supply for that resource — players did not want to purchase those extra units at the current prices. What happens? Prices fall. If there are no resources of a type left over, we say that there was excess demand — players wanted all of the units of that resource (and presumably more) at the given price! So, prices rise. For sure, this system doesn’t allow for any equilibrium, but for the sake of simplicity, it works wonders.
The advantages of this model are clear to see. Crucially, we capture the dynamic and player-driven price behaviour we wanted out of our oligopolistic market. We still have the form of competition we wanted to depict in the original iteration; prices are very much determined by collective player decision-making, and dominant players with lots of money or resources at their disposal can make real power plays which can shift the market one way or another. Most importantly, it is intuitive (which helps new players learn the game quickly) and very easy to evaluate (you only need to see if one resource of each type is lurking in the market box).
So far, I’ve talked a lot about the direction in which the prices move, but not about the magnitude of the movements. This entire discussion has treated markets like a rational computer, a calculating arbiter of efficiency. However, we should all remember that there’s another side to the market. The wild side, if you will. As John Maynard Keynes points out in his seminal General Theory, markets are ruled by ‘animal spirits’ — volatile and often erratic human emotions.
To depict this, I went for a simple D5 roll (a 10-sided dice with 1–5 printed twice) to determine how much the prices would move. At certain times, the random result will reflect the extent to which demand or supply was excessive and prices will move accordingly. Other times, there will be truly wild or unexpected swings. That outcome represents the sporadic irrationality of markets. A price might be set to fall, but perhaps it only falls by one unit — traders and investors might have an unwavering belief in the value of the resource.
For the gameplay, there are peaks and troughs throughout the rounds as players offload resources while prices are high and hoover up cheap supply when the market is depressed. It’s fun trying to spot an incoming ‘Minsky Moment’, the point where reckless speculation (perhaps driven by some high dice rolls) finally peters out and the market price collapses. These occasional ‘manias’ provide wonderful moments of unpredictability which add plenty of strategic texture to the game. As a game tool, the dice worked perfectly to introduce Keynes’ animal spirits to the world of Supremacy.
So, there you have it! The blueprint to my Supremacy market design. While this article might have been centred around my own work, I think there are lessons here which could easily carry across to other games which want to experiment with economics. Chiefly, that markets are a fusion of lots of ideas, and you need a clear vision of what parts you want to emphasise.
I’ll leave you with some examples of other board game markets which I’ve found inspiring. In Reiner Knizia’s Modern Art, there is an exploration of how a market for luxury Veblen goods (ones where demand increases with price) might operate. In Pax Pamir by Cole Wehrle, there’s a beautiful expression of supply and demand with a ‘card market’, where cards which are overlooked by players gradually accumulate additional currency on top of them to make them more ‘palatable’ (or equitable in terms of price) to the other cards. I could name other more ‘traditional’ euro-style titles, but these two strike me as nice instances where a clever market plays a key supporting role in the larger production.
What games do you play which feature markets? How are they depicted, what do they prioritise? What stories do they tell? Most importantly, are they any fun?
