EDIT: Sorry for the wall of text, I got carried away.
Yeah. I find the current economic model both boring and terrible for the gameplay since it encourages closing your borders. I do study economics, but this model is still pretty simple. It revolves around making fiefs actual economic agents.
Basically the idea is to get rid of completely arbitrary things like:
- Long distance bonus (It will still effectively be in with some changes, just because of other mechanics, not as an additional mechanic)
- S&D (Supply and demand will drive this system, but it won't be an arbitrary statistic)
- Any direct fief owner effect on prosperity (It will rise or drop depending on other things)
These will be replaced by actual supply and demand - at least supply.
The basic idea is that each good will be categorized to a category. I was thinking about luxuries (for example ornate carpets, diamonds, beautiful paintings), building supplies (slate, brass bars, iron ore) and basic goods (tents, mountain goats, dried horse meat). In economics terms goods of the same category are substitutes - but not perfect subtitutes of each other.
Demand: ie, selling crap
Instead of using the one price currently used fiefs will have separate demand functions for each good. Basically this means that what fiefs are willing to pay for goods is determined by how much of that particular good has been sold to them in the near past and how much of the goods of the same category have been sold to them in the past. There is a more drastic drop in prices if tons of the exact same thing has been sold in the past than there is if tons of an another good of the category has been sold, so while selling tons of iron ore somewhere may drop iron ore prices to the ground, there probably would still be profits - even if they're smaller - in selling slate. The fief income should also have a partial effect on the prices.
The price goods are being bought would be updated once per day or something like that. This is to reduce server load and make selling less confusing, but it could also be interpreted as markets just being imperfect like in real life.
There should also probably be some sort of maximum bought per some timeframe per category amount which totally makes sense. Even if fief is willing to pay top price for something due to extreme desperation, they still won't buy a million units of it.
Supply: ie selling crap
There are really two options. One is keeping the current system and renaming S&D to just supply and having prosperity increase the amount of stuff for sale and the selling price being settable by the fief owner. Alternatively it is possible to make supply behave kind of like demand and make the price set by amount of goods sold to compared to amount of goods produced - ie if no-one buys fief's product price drops and vice versa. I personally prefer fief owners being able to set the price though, but taxation could probably be used for similiar purpose.
Prosperity: How sales and purchases affect fiefs
Basically the idea is that a fief that is supplied with balanced amounts of every single good (which may or may not be same exact amount of each good) would grow very quickly in terms of population and prosperity while a fief with absolutely no inflow of goods would lose prosperity and possibly lose population. In reality I doubt any fief would get good amounts of every single good even if you reduce the amount of different goods by making some fiefs produce the same goods. Basically I would suggest that the growth of prosperity and population would be such a function that the mariginal gain from supplying a wider variety will decrease so that supplying 12 goods instead of 3 would increase growth the growth much more than supplying 21 goods instead of 12.
I would also suggest that population and prosperity are somewhat tied to each other. With low population prosperity gain is slower and may even drop somewhat if there is a big battle killing tons of people and if the population is high compared to the prosperity, prosperity will rise faster. It would also be possible to make constuction materials increase prosperity more than average and basic goods increase population growth more making specialized trading in possible. Alternatively construction items could increase PP production, primary use of which would now be improving armor and weaponry.
Fief income and taxation
I also mentioned before that fief demand would be affected by fief income. Fief income would come from sales. With a system where fief owner sets the price I would just allow fief owner to decide what part of the price he will take as tax. Fief income is the part that wasn't taxed away. I would like the system to be such that at 100% or near taxation the fief will drop the buying price very fast and thus make prosperity and population gain very slow thus making basically stealing supply and demand possible at the price of killing your fief. I would prefer to have the numbers set so that fief owners can have fairly decent taxation up for sales without hurting the fief though. Similiarly if you have a selling tax on player the demand curves would be calculated based on those.
The basic idea is that taxation hurts the fief growth, but if you don't go over the board with taxation the fief can grow and you can reap profits from it. There should probably also be a population and prosperity based tax for fief owners as an extra incentive to make fiefs big and profitable.
How will you guarantee this won't totally break?
All the functions dictating growth and prices should be such that they assume some invisible npc trade so that no fief will ever become completely empty or stop production completely (unless there is a 100% tax which probably stops production completely until taxation drops). The same invisible npc trade would also guarantee that no goods price will ever rice to a totally ludicrous amount. Currently in strat the soft cap for distance bonus is around 300%, but there is no hard cap. Thus I would say that something like 100-200 per good could be a hard cap of how much a fief is willing to pay in the ideal situation of it being completely starved for anything of that category and yet selling all the goods it can produce for great profit.
Scarcity
There just simply should not be enough production to make every single town in the world grow at a fast rate. With optimal distribution of goods in the whole world there should be growth, but it should be quite slow. Player action in factions would probably distribute goods strategically.
What do I hope this achieves?
I study economics and as primary thing I would just be interested in how this changes things in strat. I can't give exact predictions.
Basically I would imagine this encourages opening at least some fiefs for public trade since you need trade of both directions for fiefs to become prosperous and you probably can't make all your own fiefs grow - at least not fast - unless you get plenty of goods from other faction territory. On the other hand in the optimal situation you would probably sell most of your own production inside your own territory, but profits for that are probably pretty low so you probably want to sell it elsewhere or sell it to independent traders with a big enough tax. Pretty much all the short term financial gain the players recieve reduces the financial gain of fiefs.
On the other hand this would make trading less predictive. Currently you go to a low price fief and then travel as far as possible to a high price fief. In my system in general the market is harder to predict, but if you buy your goods cheap you should be able to make profit with some running around and looking for decent prices. In addition even if the distance bonus is removed, chances are that the fiefs that are near the supplier of a good will recieve that good more since if they don't price 1km away is the same as price 100km away and thus bringing stuff farther will give you a better price on it.
It would also encourage big caravans to diversify their goods a bit or visit multiple fiefs to sell their stuff.
What are the issues?
While it is a fairly simple system I could probably code some sort of a test prototype of, setting the exact parameter values for this to be balanced is hell.
TLDR: Fiefs gain prosperity and population from buying diverse stuff with money they get from selling goods. This also sets how much they are willing to buy of each good. No distance bonuses, but exotic stuff from far away lands tends to be pretty expensive due to how prices are determined.
