Market Mechanic Lecture: Prices

On the onset prices appear to be a simple thing.  A price is what one has to pay to get something.  But what that misses is what prices can achieve as a mechanic and a tool.  A price mechanic is a way to communicate information between players.

Fixed Prices (price theme) vs. Negotiated Prices (price mechanic)

To distinguish a price mechanic from a price theme I am going to distinguish the difference between fixed prices and negotiated prices.  A fixed price is a price theme.  Fixed prices are created by an outside source, most likely by the rule book in the board game.  A fixed price states in no uncertain term something is worth X.  The price in this instance is being used to communicate the tradeoff of game actions by the game designer to the players by using a set of fixed ratios of one action versus another during game play.

Take The Game of Life, the price to change your degree is fixed on the board.  If you want to take a chance and stop being an accountant then you have to pay a fixed X amount of money to change jobs. The player has to decide if they want to use their money to change jobs or do they want to save it to pay for 2 future doctor visits.  The fixed price enables money to serve as a simplification of the tradeoff between one action versus another within the board game.  

A negotiated price, a price mechanic, is when two or more players have to agree on a value to make an exchange.  In Michael Keller’s Captains of Industry players require resources to build and operate factories.  They get these resources by negotiating prices with the other players who happen to have these resources.  

Negotiated Prices Communicate Information

When prices are negotiated, prices in the game communicate the value of the goods or actions amongst the players.  You do not need to know why a player wants a good or action to know that they desire it.  All you need to know is how high of a price a player is willing to pay to buy it or sell it to gauge their desire.

The economy uses communication from prices to coordinate production and supply.  Economist Leonard E. Read shows in his story I, Pencil that pencil makers can communicate to wood producers their desire for an increase in the wood supply to make pencils by offering to buy wood at a higher price.  Wood suppliers see the higher price and are willing to pay more money to entice people to be lumberjacks and to work longer hours to produce more wood.

The person who supplies the wood does not directly see that pencil makers need more wood.  For all the lumber supplier may know, paper makers and furniture makers might desire more wood.  The magic of a price mechanic and negotiated prices is that wood suppliers never have to spend time guessing if specific industries or the world needs more wood.  The price for wood communicates to the lumber suppliers people’s desire for wood and they respond by working to increase their output.  

If players need wood to expand their farm or stone quarry in Captain of Industry they communicate their desire for wood by the willingness to pay a high price for it.  Players producing wood may not know why other plays want wood so badly, but they will see from the price there is high demand by other players for it and will invest to expand their output of wood in response.

Relation of Price Mechanic, Price Theme, and Money Mechanic

A price themed only game does not have negotiated prices between players.  A price themed game may still have a money mechanic.  Speculation has fixed prices for stock decided by events on the game board, making the game a price theme.  Players exchange money with the bank to take risks in Speculation to possibly earn more money later in the game, meaning the game has a Money Mechanic.

Money mechanic games can also be a price mechanic game.  Michael Keller’s Captains of Industry players negotiate with each other to exchange goods for money.  The prices settled upon communicate what goods players desire, and hint at what moves players will make next since each good can only be used to complete so many actions.

But what about games based on batter, like Settler’s of Catan.  Can Settler’s of Catan’s barter economy be a price mechanic or price themed game even though there is no money Mechanic?

The answer is yes.  Because barter involves setting prices in terms of one good versus another.  My offer to trade 2 wood for 1 brick means that the price of 1 brick is 2 wood.  Some prices in Settler’s of Catan are price themed.  I can exchange for a fixed price four of any one good to acquire a different good.  This is a fixed price that is not an exchange of information between players.   

On the other hand, other prices in Settlers of Catan are a price mechanic.  Players can select to trade with each other.  When a player offers to trade with another player they are negotiating and in the process communicating information about the importance particular goods are to them to their opponents.

Why Differentiate Price Mechanic and Price Theme?

I differentiate between price mechanics and price themes because they create different experiences for players.  Price mechanics create a new dimension for board players to compete with each other.  Price mechanics are driven by supply, demand, and information.  It rewards players who can best track information to decipher current prices and anticipate future prices.

Take my horse racing game Post Position.  Players actively engage in a market where they trade bets on horses throughout a horse race.  The final value of a bet on a horse is settled by the order the horses cross the finish line.  Each player has inside information not held by others on how the horses are going to move in the race.

When players make bets, they are agreeing on a price for the bet.  That price communicates information to all the other players on who thinks a horse is going to move up and who thinks a horse is going to move down in the race.  The winner is the player who best uses their inside information and best reads other players trades to figure out the horses that are going to do well and the horses that are going to do poorly before everyone else.

Fixed prices are constraints imposed by the game designer.  Without a complementary price mechanic, fixed prices represent a set of actions a player needs to compete to acquire an action, resource, or victory point.  They are merely a tool used by the game designer to communicate the rules of the game to the player.