Controlling Currency Hyper-Inflation

[thelopez]

I have found, through my personal gaming experience and reading articles about the failure of CRPGs, that one of the many reasons why CRPGs fail is due to the hyper-inflation of the currency used in the CRPGs economy. One of the more useful articles I read was: Mu's Unbelievably Long and Disjointed Ramblings About RPG Design. The relavent section of the article for this posting is the: Reasonable Cash Economy section.

First, is this a true statement?

Second, what is the best way to control hyper-inflation in CRPGs? I know that there are common design patterns for "money sinks" such as Taxes, charging to learn skills in schools, buying titles of nobility, etc.

If the Taxes design pattern was implemented into a fantasy CRPG what type of taxes should be implemented?

I have come up with some examples of types of taxes:

1. Non-residental entrance fee
    Due?
        When a character and his or her party enters a town where one or more of them are not residents of that town.

    How is the tax amount determined?
        By counting number of heads in characters party including livestock, mounts, etc.

2. Income Tax
    Due?
        Hmmm ... good question. I don't really have a good answer for this one. Should it be once a in game week? month? year?
    How is the tax amount determined?
        Another good questions. Again I don't really have a good answer for this one either.

Thanks

[Harlequin]

One suggestion: Change your timescale.

One-to-one timing means that your adventurers (I'm assuming a standard fantasy environment) are going on life-threatening adventures, different ones, every couple of days.  Healing up either in seconds, or at worst overnight, from crippling wounds, and then heading back out to something new and fantastically important and/or lucrative.  Hmmm.

If you tried divorcing "adventuring timescale" from "town timescale" somehow, better done in a single-player CRPG (commercial sell) than in an MMORPG, then having months or years of life between adventures would make them more significant in and of themselves, and open up some interesting options (characters aging significantly, children, etc).  Take a look at King Arthur Pendragon - I'm not sure about the current editions, but my First Ed book assumes that each game session will be a distinct story and that the advancement phase at the end of each session is a Winter season.  That is, it assumes a default scale of one adventure per year of life.

Another thought would be to assign some kind of statistical value denoting how spendthrift/wasteful each character is, and use that to calculate their costs of living.  With a high, what, Ascetic score, your cost of living and your day job or equivalent (monastic duties, painting for your patrons, hunting and gathering) probably roughly cancel out, depending on where your relevant skills are compared to the expected norm for your social class and standard of living.  With a high Ascetic score (or low Indulgent), you end up keeping quite a small surplus.

Lower Ascetic scores denote most of us.  You get paid tomorrow, you're hungry, McDonald's is more expensive than cooking at home but you're not much of a cook anyway.  You buy CDs, T-shirts with neat pictures, gaming books.  You try to keep a girlfriend happy (perhaps it's her Asceticism score you use there!).  So your cost of living scales upward.

And we all know people who can't keep a coin in the bank to save their souls.  Would these be the people saving up to buy plate armour?  No, these would be the people maintaining that it would be too heavy anyway, they might buy some someday, but not now, they've just gone to a concert and can't afford it.

Those trying to keep in active training are, similarly, not spending that time earning their wages or their keep.  That's not to say that the increased cost might not be covered, by them or someone else... that's the point of a standing army, you decide it's worth feeding these guys so the lord spends his cash doing so.

So maybe you could use a slow-time "out of adventuring mode" timescale, with seasons as the base unit of time, and work out cost of living like so:
- Base cost, based strictly on social class.  Rent/upkeep, food, clothing.
- Base income, based on your profession.  This, plus the above, might be near zero or even negative for many people with real (non-adventuring) jobs of a kind that the local economy will bear.  (Two armoursmiths in a small town, you're probably going to have a fight on your hands.)  It's pure adventurers with no day jobs who end up shorted, here.  Either way, it's an additive change to your bank account, for better or for worse.
- Martial/magical training is a day job (or part of one) which doesn't bring in cash.  Maybe give them a sliding scale: of your "working time," how much puts food on the table and how much is research, training, etc.?
- Multiplier, based on Asceticism/Indulgent score.  This is the amount of your life savings you actually get to keep, after each season's base costs are paid out; I'd do it as a percentage.  This is spent on fripperies with redeeming qualities that are social in nature; pay them back with lots of non-adventuring-relevant gewgaws that sound like they were, arguably, worth the expense, after evaporating most of the money on short-term desires with no lasting goods attached at all.

Obviously players will want a low Indulgent score - ninety percent Indulgent would mean that you found a dragon's hoard, and next season only 10% is left, and the season after that only 1% remains.  And you have fancy friends and a lot of expensive hangovers to show for it.  But make them balance this against their other characteristics; it costs attribute points to "buy down" your Indulgent from a default (30%?), or you can get attribute points back by buying it up instead.  [Note that the money "lost to" Indulgent must be earmarked from the moment they find treasure... he's greedy, he already has things in mind for his share, no shuffling it around to the cleric so it'll get saved.  Not unless you want to replicate situations like the captain hanging onto his sailors' wages for them so that they actually have any left when they get home.]

Plus the obvious advice that not every troll has sacks of gold, not every adventure ends in pelf.  In fact, honestly, one could easily (more easily than the reverse?) envision the opposite case... most deeds of derring-do aren't done for profit.  Most people who adventure to make their fortune end up just getting by, and only one in a hundred makes it rich.

Just some thoughts for you,

- Eric

[Mike Holmes]

Cool question. Welcome to The Forge.

First, is this a true statement?

I assume the statement in question is that CRPGs tend to fail due to hyper-inflation? If so, then I'd say that it all depends on your definition of failure. Yes, I think they all suffer from somthing like this, but people continue to play. We'll assume that we're just looking to get rid of the uglyness that is hyperinflation.

First, Mu has great thoughts on the idea, but he dismisses one without much analysis. Yes, the closed systems of UO and the like are problematic. But they're the most realistic, and with help, they can be "semi-open" enough so that you avoid the hoarder problem. I think that this line of solution is probably overlooked.

Do you want to look at that as a potential solution? Or would you rather just look at how to solve the problem of completely open systems?

Second, what is the best way to control hyper-inflation in CRPGs? I know that there are common design patterns for "money sinks" such as Taxes, charging to learn skills in schools, buying titles of nobility, etc.

Well, the "best" way is going to depend a lot on your goals for the game. What can you tell us about what you'd want the game to be like in other regards?

Your sample taxes are an OK, but I'd find a way to make their incorporation somehow important to the big picture. For instance, you could have the emperor in the game building a huge monument, and clock some metagame changes to the setting based on it's completion. That is, what happens to the taxes? I think if players saw the effects that the taxes themselves would make more sense.

Once you have that in place, I think that "progressive" taxes are the perfect way to keep things balanced. You don't make it impossible to make a profit, but you make it progressively more difficult. Making late comers have much more of a chance to "catch up".

Mike

[Christopher Weeks]

Thanks for the link, it was a good read.  But like Mike says, he kind of just poo-pooed closed economies with out any substance.  

I think close analysis of the economy of A Tale in the Desert is in order.  There is no pharaonic currency in that game -- players are able to print their own notes.  Some of the resources are part of a closed economy while others are not.  Sand and Grass and mud and water are infinitely plentiful, but take time.  Gold ore can be panned at the shore by highly perceptive people, but like Iron and the other minerals, when mined from the ground are pseudo-closed (in that it becomes cost-prohibitive to mine after a time).

In general, I think these games all suffer from their open economy.  Mu's objections to the closed economy, I think, could more easily be negated than all of the tremendous problems created by managing and open economy.  It's particularly funny to me that he describes the real world (closed) economy as having "no chance of success."

Eric's ideas on indulgence as a stat are interesting, but I really like Mu's suggestion for taxation.  It's all a protection racket (I mean, even still, really) with a hierarchy of levels in which the expected taxation increases...kind of like the mafia.  And a wealth tax is healthier for the economy than an income tax anyway.  In theory an income tax disincents earning taxable income (bad) while a wealth tax might incent spending it (good) or do nothing (ok).  Whatever the tax form ends up being, Mike's idea of funding tangible stuff is fantastic.  Especially if it were tied into technological growth of some kind: allowing new skills or buildings, driving further economy, deeper mining, faster or safer travel, opening new schools of magic, etc.

Chris

[thelopez]

Cool question. Welcome to The Forge.

Thanks for the welcome.

I assume the statement in question is that CRPGs tend to fail due to hyper-inflation? If so, then I'd say that it all depends on your definition of failure. Yes, I think they all suffer from somthing like this, but people continue to play. We'll assume that we're just looking to get rid of the uglyness that is hyperinflation.

When I say that CRPGs tend to fail due to hyper-inflation I mean that the whole concept of currency is blown out of the water and no longer has a value thus the entire carefully designed economy comes crashing down because anyone can buy anything, etc, etc.

Yes, the closed systems of UO and the like are problematic. But they're the most realistic, and with help, they can be "semi-open" enough so that you avoid the hoarder problem. I think that this line of solution is probably overlooked.

I have been pondering how to handle this part of the design and I have been considering a semi-open system like you mentioned. Here is what I have so far:
The game is going to include for instance the ability to harvest resources.
A harvestable resource could be some type of wood, plant, ore, etc. Each resource instance in an region will have two values
1. The current available amount of that resource left that can be harvested.
2. The max amount of that resource available. The max amount of resource available is not fixed. It will go up and down depending on how many people are currently registered to play.

Over time the resource replenishes itself, the replenishment rate depends on what type of resource it is. The replenishment rate can increase or decrease depending on:
- current number of players in the game
- the current available amount of that resource. So if some players completely devastate a forest by completely deforesting it, then it will take a long time for the forest to be replenished.

Also, the availability of some resources in a region will depend on the current season in the game. So for instance if the current season is Autumn and its almost the end of the season then the replenishment rate for bears will slowly be reduced close to zero. When the season changes to Winter, the replenishment rate for bears will be zero and players wouldn't be able to encounter bears unless they discovered a hibernating bear.

Bear in mind, this is still a work in progress and I haven't explored all of the details yet.

Well, the "best" way is going to depend a lot on your goals for the game. What can you tell us about what you'd want the game to be like in other regards?

Actually, I am still doing a lot of research on RPG design, current RPGs, etc. I want to finish most of this before I actually set any goals or wants for the RPG that I want to develop.

That is, what happens to the taxes? I think if players saw the effects that the taxes themselves would make more sense.

What happens to the taxes? Hmmm.... Well the city guard would have to be paid for instance. And the more people are paying taxes there would be more guards with better equipment and experience. So if you try to skip on paying the entrance taxes then you might find yourself fighting some city guards.

Again, bear in mind, this is still a work in progress and I haven't explored all of the details yet.

Thanks for the insight Mike.

[thelopez]

Thanks for the link, it was a good read.  But like Mike says, he kind of just poo-pooed closed economies with out any substance.  

Your welcome. I am always looking for good reads on RPG design, I'll post more if I find them. As for Mu poo-pooing closed economies, from what I have read in some of his other writings he tends to be that way. What can I say ... he's human ... I hope.

I think close analysis of the economy of A Tale in the Desert is in order.  There is no pharaonic currency in that game -- players are able to print their own notes.

Thanks for the link to A Tale in the Desert I've added it to my resource URL list and I'll have to explore it further when I get a chance. Actually, I had thought about this. Players should be able to mint their own coins, but, it would be illegal unless they had the permission of the current ruler in the town that they reside in. If they are caught without the rulers permission then that would be considered forgery and it would be punishable. The punishment would be either jail time and/or a fine.

Some of the resources are part of a closed economy while others are not.  Sand and Grass and mud and water are infinitely plentiful, but take time.  Gold ore can be panned at the shore by highly perceptive people, but like Iron and the other minerals, when mined from the ground are pseudo-closed (in that it becomes cost-prohibitive to mine after a time).

I agree with that idea but I want to handle it differently, I explain this in my reply to Mike.

Thanks for the insight Chris.

[Christopher Weeks]

I agree with that idea but I want to handle it differently, I explain this in my reply to Mike.

Actually, unless I'm failing to read it right, you don't.  You do say how you want to handle it differently, but not why.  And I'd be interested in hearing why you (or Mu!) think mysteriously regenerative resources are a good idea.

Chris

[thelopez]

I agree with that idea but I want to handle it differently, I explain this in my reply to Mike.

Actually, unless I'm failing to read it right, you don't.  You do say how you want to handle it differently, but not why.  And I'd be interested in hearing why you (or Mu!) think mysteriously regenerative resources are a good idea.

Chris

Chris you are correct I never did explain why I wanted to handle regenerative harvestable resources differently. Well here it goes. Typically in nature there are resources that replenish themselves naturally. Sand for instance is created due to the erosion of rocks. Take away all of the sand (unlikely situation but whatever) and it will take quite a long time for more to be there due to the nature of erosion. But after quite a while more sand will be created.

Again in nature, plants and trees grow. Right?
And bears do actually have a reproduction cycle, right?

What about ores and such? Well again, ores could be brought down from mountains through erosion, mined from the ground, etc.

Well there's the reason for the existence of "mysteriously regenerative resources".

Did I answer your question to your satisfaction? Let me know if I didn't.

Thanks for asking a pointed question, Chris. If I can't answer these types of questions then maybe whatever it is shouldn't be designed and implemented into the game, right?

[Harlequin]

I agree that closed econonmies may be getting the short end of the stick.

Here's a closed economy thought for you (LONG):  The world is big, but finite.  Every piece of gold is physically tracked, and came from somewhere.  Ditto for everything else.  Nothing "spawns" by magic except, well, actual magical spawny monster thingies like fire elementals in a volcano (but of course not treasure for them to carry!).

This includes Player Characters.

When someone signs up to play in the game, the character creation process has a main starting point: Pick Someone.  Pick a town, and within that town pick a social class or type (blacksmith's apprentice, whatever) of the appropriate sort.  The game then "instances" the character, probably via a process like:

Large town Zeebob (which has 2 smithies in it) has 5 blacksmith's apprentices, who merge into a seamless blob which produces instances of itself (single apprentices) when required, such as to help a PC blacksmith.  Mostly, though, they're treated as single object with "Quantity: Five" as an attribute of that blob.  You sign on and choose "Blacksmith's Apprentice" and, from the ensuing dialogue box, "One of the five as-yet-unplayed apprentices living in Zeebob."  Or vice versa, if you care more about coming from Zeebob with your pals and end up a blacksmith's apprentice because we're out of foresters.

You click OK.  Suddenly, there are only four NPC apprentices in Zeebob, and one PC.  You.  We know how much money our bloblike average local apprentice possesses, so you own that much.  (If PC adventurers have been raising the standard of living for blacksmiths' apprentices through providing lots of custom, more power to you.)  No money has been added to the economy.

(We probably use an explicit name convention, such that NPCs of "starting PC" stature have little or no name, being called "Arian's Apprentice" and the like.  Having one gain a name lets you know it's been instanced and is now a PC or significant NPC.)

Same thing goes for orcs.  There are not an infinite number of orcs.  There are simply a very large number of them, an orcish nation perhaps.  When you generate an encounter with an orcish raiding party, those orcs came from there, and are deducted from their force.  They respawn only inasmuch as female orcs accomplish this through the usual methods, generally far, far away from you.

If those orcs are carrying gold pieces, they got them from raiding villages and killing merchants.  Much of this can happen in the abstract... the village of Pine used to own 250 coins all told, it got raided by orcs.  Villagers have a "hide 20% successfully" figure, so the orcs stole 200 coins.  If this was recent enough that the specific band is still around, then that band has those coins.  If it happened awhile ago, then the coins got absorbed into the collective wealth of the warband, and became subject to the usual averaged distribution of wealth among orcs (50% to the Great Goblin, 25% spread evenly-plus-a-random-factor among orcs of rank, 25% spread the same way among all other orcs), which is only actually made manifest if and when those orcs are actually instanced for use.

In terms of magic items, this would mean designing such that all of the magic items which exist (shy of PCs/NPCs making them) must exist from the start, at least in theory.  Many of them may exist as placeholders, until their area gets approached, but they do already exist there in theory.  This is the issue Mu is worried about most in terms of closed economies, but IMO the key here is simply to make the closed economy large, such that there are still unexplored regions if one joins six months after launch, and to make magic items particular and probably unique, such that owning one is a big deal.  [Use of Hero Wars-esque "pay currency to make the magic item part of your specific myth" rules would also help.  Make it such that acquiring a magic sword changes the character outright.]

Build to recycle magic items and, as Mu suggests, to make them breakable and subject to wear.  PCs and NPCs alike may be engaged in the difficult tasks of creating them... but rather than ever-increasing the number of such tools in the world, these efforts more-or-less keep up with the decay rate.  (See below for some other notes on how to set the decay rate.)

Same thing goes for resource generation by mining or what have you.  First off this is bloody slow, making progress only because there are a whole lot of NPCs involved; second, the NPCs are already doing so at their listed rates of effort, and it makes a lot less difference if you step in and incarnate as one of the miners.  In fact, odds are that with the time you take off of your job to become an adventurer, time the NPC you used to be wasn't taking, the overall mining income has dropped.  Setting your downtime efforts toward mining probably gets you, as a PC, slightly better time-to-effort ratio than the NPC you were... but not enormously so, and at the expense of your other options as a PC.  The impact on the economy is not "someone is mining where nobody was before," it's "this person is mining a little more dedicatedly, and keeping it for himself instead of selling it."  No hyperinflation.  

If the PC mines and smelts ore and passes that to his friends to make him and themselves swords, then there's a shortage of iron in the markets the NPC miner used to supply, prices rise, the NPC miners get richer, maybe mining becomes more attractive as a cash source... but there's still a fairly fixed amount of iron there, and incarnating PC miners does little to change that (and incarnating "mules" does zero, with a little careful coding they'd function the same as an un-incarnated NPC).  All still closed-economy work.

If you think in terms of PC effort being a redirection of existing NPC work, not in terms of it being previously nonexistent labour, the whole thing hangs together awfully well.

If players do increase the overall "gross domestic product" of anything, here's another trick.  This would be particularly interesting in terms of magic items.  Tie the entropy rate to the inflow rate and/or quantity of that object.  Hide this from the players, hide it hard... but if a gang of players reallocates themselves from being bowyers/lawyers/coopers to all being swordsmiths, they convince others to increase the mining industry to supply them, and swords start to flood the market... then the breakage rate and wear-and-tear rate (requiring more frequent repair which in turn risks or leads to increased breakage) of swords, quietly behind the scenes, goes up.  [Or of all weapons, or whatever.]  If it's all running on low- to moderate-probability curves (0.5% per hundred swords in this kingdom), the hidden variable will be all but unnoticeable as long as the economy doesn't become ridiculous in some other manner, and your closed economy will remain homeostatically stable.

Each such negative-feedback curve has an equilibrium point.  It may not be what you planned (the decay rate is too slow, so the equilibrium point is still way too many swords), but this is tweakable behind the scenes, and at least the equilibrium exists to be tweaked.

This model seems really interesting to me, because I can see it motivating grand schemes in an effort to reallocate things.  Ten percent of the world's wealth is in orcish hands, and we publish that stat.  That sounds like a good reason (OOC) to push for an extinction campaign - and it could work, but there are many, many thousands of orcs to kill first.  In exchange, having the orcs raid your village and kill off a bunch of peasants is more of a big deal - this cuts into the goods being produced by the NPC economy, and has impact which radiates outward to all those other collections of "average shopkeeper" in nearby towns.  Treating the NPCs as amorphous blobs of X individuals each putting in a day's work means that PC actions are less disruptive, and also that you can build the NPC interactions as blob-on-blob rather than person-on-person, at least until the PCs come along - in which case you look at one average member of the blob, interact, and "reabsorb" it once it's well out of sight.

Creepy in concept, in a way, but nonetheless interesting...

- Eric

[Callan S.]

I would have thought it's simple, if I'm getting it correctly.

What you do is determine an amount of money per level of each character that exists in the game world. Eg, level 1 = 100, level 2 = 200

You get your program to go through ALL PC's in your game and add it up. This is the maximum amount of money you want to allow in the game world.

Then you get it to go through each character and record how much they actually have. This is how much is actually in the world.

When the latter exceeds the former, bleed points ramp up.

Eg, all items in shops increase by 10% or something for everyone, until that amount drops below the allowed amount (Then they return to normal). This money is simply destroyed. In an emergency (the total money amount just isn't dropping fast enough), they can be raised even higher.

You also ensure there are bleed points for those who don't use shops, which includes toll gates, bribes, whatever. It's all taxes, with different names.

Once the total drops to a standardised amount, the prices drop. Or has this been done before and failed?

Edit: Basically, from reading further, it looks like my idea is a pseudo closed cash economy which expands with each new PC added. It then begins destroying excess money after X amount, rather than only having X to begin with.

[contracycle]

Another thought on closed economies.  So OK, cheesegraters are the thing to have, and the first player outta the gate gets the most opportunity.  What tyou end with then is presumably some interaction amongst early players and further incomers... you get a power structure, possibly involving rivalries and conflict.  This especially so if only a proportion of 'graters were findable at the start condition.

I think the problem then is understanding the goals.  What is the intended effect of the economic system in the game?  Balance?  Passive resistance?  Do these games favour blocs and camps, or avoid them?

Edit: the flip side of mountains producing more sand is that then we have smaller mountains.  Entropy has to be modelled to give an open system somewhere to vent. 'Ashes to ashes, dust to dust' and all that.

[erithromycin]

Isn't the "hyper inflation" simply a product of additive cash reserves? That is, when a player joins, they've got money, so the total sum of money goes up, and everything has to take this into account?

Now, to my mind, the two obvious solutions are the provision of debt services (that is to say loans) and abandoning any notion of a fixed price for goods. Though this is really venturing into deep economics, more than anything else.

However, I do think that the subject of inflation is interesting in terms of game theory/design. How many games start you poor, then start to fall apart when you become rich enough to buy whatever you might need? The problem in many is providing challenge when sufficiently equipped - which raises the question of 'how much wealth is enough?'

Perhaps the biggest problem is not that the economies are hyper-inflationary because the sum total of money is ever increasing at the bottom end, but that the economy is hyper-inflationary because the primary activities in the game increase the sum total of money* and those who have been playing for a long time will earn more and more.

Ultimately, I suppose, the problem is that money comes from sources other than the players or other entities - things are accorded value before they are sold.

I think that this can be tracked back to the notion of monetary reward for killing monsters that arrives with the monster itself, rather than after some sort of processing performed upon the monster, be it the rendering of the creature for meat which must then be sold, or the removal or particular organs that a bounty might be paid.

Rambling now. I'll stop.

[thelopez]

Isn't the "hyper inflation" simply a product of additive cash reserves?

Well sort of, hyper-inflation could be applied to resources as well. If gold ore for instance becomes as abundant as sand then it will completely loose its value and is hyper-inflated. And not only that, if a game uses silver coins as currency and players are able to mint coins then it would be possible that players could mint so many silver coins that it would cause hyper-inflation of the currency but it would reduce the hyper-inflation of the silver ore.

Ultimately, I suppose, the problem is that money comes from sources other than the players or other entities - things are accorded value before they are sold.

I think that this can be tracked back to the notion of monetary reward for killing monsters that arrives with the monster itself...

I completely agree with you on this point. Really, where for instance, would a giant fire ant carry: 30 gold coins, a broadsword and a pair of Boots of Giant strength? I guess the giant fire ant could be wearing the boots (that would be a sight), the broadsword could be stuck in the ant and the gold coins could be in its guts.

I think requiring players to "render" / process the monster is a wonderful idea. Think of the possibilities. There could be an entire branch of a skill tree devoted to the art of "rendering" a dispatched monster. Spell components would have a logical place to be found in the game world. Characters could wear the antennas, harvested from the giant fire ant, in town parties. Kudos to you erithromycin, kudos.

[Harlequin]

I would make a mild warning on the "rendering" idea...  this can be very dangerous if it's made too significant.  Think far-reaching cultural implications if "hunter" is considered a route to great riches.  Think resources "from nowhere" without good controls over the influx.  Think combat bias, again.  I've had this happen to me, and it's not a pretty sight.

Two suggestions there: First, don't devote a lot of rules weight to the rendering process.  A 'butcher' skill, or as a subset of 'hunter,' tops.  The more rules weight you devote to it, the more it will be perceived as important.  It can involve skills with other applications - perhaps proper extraction of certain components uses Medical skill, and some exotic critters invoke your Mining skill or the like - but dedicated skills which don't do anything else are a strong indicator of game focus.

Second, consider having such things possess zero or little intrinsic value to the NPC community.  Apothecaries and magi may pay a few pennies, but since they'll assume you're ignorant of the true value, and they'll pretty much always have a source which is ignorant in this way, you're unlikely to get much from them.  Make the true value be PC-to-PC... this would couple well with hidden lore and magic item creation or augmentation.  It works especially well if the primary application is directly relevant to the adventuring profession... the feathers of the JubJub bird terrify snakes, the poison of the Rock Scorpion is particularly effective against the orcish kind, that sort of thing.  (And don't be afraid to have this hidden lore change over time... the orcs discover that the wigmar blossom is a preventative for Rock Scorpion poison... once it becomes too wide-spread through the playerbase.  Nor be afraid to require in-character communication of this fact; a PC who has never, IC, learned how to use the feathers of the JubJub bird merely looks silly.)

[Mike Holmes]

When I say that CRPGs tend to fail due to hyper-inflation I mean that the whole concept of currency is blown out of the water and no longer has a value thus the entire carefully designed economy comes crashing down because anyone can buy anything, etc, etc.

Well, this is actually the opposite of what actual hyperinflation does. Because, in the real world, prices aren't fixed. If you allow the prices to vary with inflation, then at least you don't have the problem that anyone can buy anything. Instead you get the problem that nobody can buy anything without a wheelbarrow of cash (see Weimar Republic).

The arguments against free markets are that having them means that starting characters can't compete because they don't have enough money to start with. But to that I say popycock. Either give them more money, or, better yet, start them with none at all. That way you don't worsen the inflation problem from the base up, either, and all entry points are "fair".

How does the character get money, then? Same way as anybody else, they earn it somehow.

That fixes the problem of anybody can buy anything - but we still have the wheelbarrow problem. So...

I have been pondering how to handle this part of the design and I have been considering a semi-open system like you mentioned. Here is what I have so far:
The game is going to include for instance the ability to harvest resources.
A harvestable resource could be some type of wood, plant, ore, etc. Each resource instance in an region will have two values
1. The current available amount of that resource left that can be harvested.
2. The max amount of that resource available. The max amount of resource available is not fixed. It will go up and down depending on how many people are currently registered to play.

This is basically what I was implying. "Open Economies," by these definitions, mean those in which there's an influx of some resource that isn't comensurate with work required to get it. That is, it instantly appears (often borne by those ants you mention). So, simply stop that effect. Sure plants, ore, stuff that take a lot of effort to produce, those can flow in over time. Slowly enough that inflation only proceeds naturally. It's just the massive influx of cash.

The players will hate it, but just don't have "monsters" with money running around. Or make them very rare, and/or make the number of monsters limited. But then how do you prevent the early players from killing them all? Make combat realistic. Seriously. Make character death fighting monsters very likely. Then have the monsters take the character's treasure, and Viola! You have your explanation for where the treasure comes from.

Over time the resource replenishes itself, the replenishment rate depends on what type of resource it is. The replenishment rate can increase or decrease depending on:
- current number of players in the game
- the current available amount of that resource. So if some players completely devastate a forest by completely deforesting it, then it will take a long time for the forest to be replenished.

Right. IOW, model realistically. Simple.

Actually, I am still doing a lot of research on RPG design, current RPGs, etc. I want to finish most of this before I actually set any goals or wants for the RPG that I want to develop.

?? You want to finish the design before you want to know what you want it to do?

What happens to the taxes? Hmmm.... Well the city guard would have to be paid for instance. And the more people are paying taxes there would be more guards with better equipment and experience. So if you try to skip on paying the entrance taxes then you might find yourself fighting some city guards.

I think you're missing the point. You can actually make the taxes from a balance mechanism into something that adds to the setting. For example, perhaps each city has a warlord. He is the beneficiary of the taxes. When he gets enough money, he arms troops, and they march off to battle the next city to take all of their stuff. So you can actually be in the military and involved in a campaign in which there might be looting, etc. And that's just one idea off the top of my head. When a magocracy gets enough money, they build another pylon of light, which opens up a new realm for discovery. That way the world grows in proportion to the taxes collected. Lots of ideas as to what sort of neat stuff they're spending on. Note that they'd only spend some small proportion on these things - maybe 10%, leaving the rest to explain the power structure's maintainence.

There's another really cool area that's not been explored. Which is cost of living. Part of the problem is that in these games, some of these costs are overlooked. I mean, sure sometimes you have to pay to stay at the inn, or for meals, but just as often this is overlooked. And for good reason - it's boring stuff looked at on that scale. But think about your own finances. Why don't you save more than you do? Because you like to have cable TV, and go to the bar sometimes. Or whatever floats your boat.

So what would be better is an abstract system that measures your quality of life. Basically, you have the character pay out a portion of his money over time to support himself. At low levels if you don't pay more, you'll eventually starve or die from exposure. As you pay more and more, the advantage moves from being survival, to being social status. People recognize you, etc.

This would be more than the purchase of meaningless titles - the social standing would have a mechanical effect on NPC interaction. Want to get to see Lord Brittish? You can't just stride in there. You have to be worthy of his attention or his guards will kick your ass (and, again with realistic combat, that'll be a real threat). So, if you want to move in certain circles, you have to pay, and not just once, but on a regular basis, otherwise your social status will drop.

See Traveller, and Privateer's & Gentlemen for games that already have rules like this (what's the name of the PBEM for this, Max?). As well as Donjon for a game that does currency right. Also Pendragon.

Lots of games have done this correctly, all it takes is emulating them.

In general, just model more realistically, and the problems go away. Does that sound dull? It doesn't have to be. The fantasy elements or whatever the cool part of gameplay is, can be just as interesting without the Monty Haul elements.

Mike