Gaming the socialist calculation debate - update

I'd previously noted a game reviewer's discovery of the socialist calculation problem in Dawn of Discovery. Loyal reader Max Marty bought the game and emails the following:

I've always been a fan of city-building sims so when I read your post on the "Dawn of Discovery" game I decided to go try it for myself.

So you might find this interesting, the game rates the size of your city on I think it was a 5 point scale or such, from a tiny borough to a metropolis. The problems don't start showing up till somewhere around stars 2-3, at which point the issues behind the socialist calculation debate start becoming evident. And the worst part is that if you have an accident happen, which could include a fire or forgetting to check your storeroom for the 30 different goods you must keep stocked at all times, it will lead to a cascading effect that can destroy the entire province. Towards the end of the game I even downloaded a special program that ran in the background which could grant me all sorts of resources (infinite money, different kinds of goods), and I was still spending nearly all my time using the cheat program just to stay alive and maintain the status quo (The bailouts always required more bailouts!).

Anyway! I thought you might be interested in reading up on a new one that seems to be coming out in October. Its called "Cities XL", its billed as a "social-networking online city building experience", or some such business. The screenshots look amazing, and from what I've read, its going to be a fantastic game - but it doesn't seem like its going to involve spontaneous order of any sort. Though apparently folks can trade across their cities between on the social-network, so the "agent" level here may be the city itself and Hayek may get some screen-time after all.

Cool findings on Dawn of Discovery. No way I'm going to try Cities XL though: a version of SimCity that's full time social play? Too perilous.

Hoisted from the comments: for a Hayekian game

Commenter Max Marty writes:

I've often wished for a Simcity-ish simulation that operated on actual market principles. I even tried getting a copy of a simulation called "Capitalism" but its just a different flavor of micro-management at the agent level.

Alright, who wants to start a Hayekian inspired game company with me?

I've wondered what a Hayekian Sim City game would look like. If you start ground up with a new city, like Sim City, the game would be trivial: just set an optimal rule structure at the start and make sure there's an insurance market against Godzilla attacks.

A more interesting variant could work something like the following. You're the city comptroller. You've been appointed by the newly-elected mayor to sort out the mess that the city's in. He was elected on a reform platform, but he's worried that if he goes too far, he'll be turfed in the next election and he's more than happy to make you scapegoat if necessary. You get polling data on which issues the public thinks are currently most important and reactions to your latest policy moves. All of the economics works as it should, but implementing optimal policy too quickly could see you turfed from office. So, if voters think education is important, you might still find that a move to eliminate zoning and turn the public schools into charter schools would yield protests and strikes by the teachers' unions (still protected by State-level union rules so you can't just fire the lot of them) and protests by folks who would suffer large losses to property values with the eliminations of restrictive zoning (rich folks basically). What small moves can you make to build support towards optimal policy? How many compromises on other margins are you willing to accept to make small changes on the more important margin?

Or, if folks are upset about the high costs of taxicabs, you might find that eliminating taxicab licensing (restrictions on entry: the New York Medallion system) would dramatically reduce fares but also would yield gridlock as cab owners protested by blocking key intersections and a wave of voter opposition as a poor immigrant who invested his life savings to buy a taxicab medallion, which he planned on passing on to his son, talks about how the reforms would bankrupt him. Can you devise a policy that compensates the losers but remains popular with voters? Tullock says no, but I still think a buy-out of medallion holders financed by a bond issue that's paid off using a tax on taxi fares would be a Pareto move. I'm almost surely wrong though, because there are no Pareto moves left in politics (== $20 on the sidewalk) and because Tullock says there's no system that would work. I just don't know why it wouldn't work.

Add in machinations of the challenger for office and some incentives to implement policies that induce his supporters to leave town: the Curley Effect.

Then add in random swings in voter opinion based on whether the local TV station aired an expose on the free coffee city workers get in their lunchrooms or whether Barry White has just sung a song about how the city should eliminate whacking day.

The game sounds depressing. And frustrating. And is sufficient reason never to run for public office.

Gaming the Socialist Calculation Debate

Marginal Revolution today links to a review of a new video game: Dawn of Discovery.

Trying to figure out whether I'd be best advised to find the PC or the Wii version, I did a quick check of other reviews and found this gem.

Sadly, managing the resources you need to produce isn't straightforward, which makes the otherwise delightful business of city building occasionally irksome. With any of your production facilities, you can tell at a glance at what percentage of their peak efficiency they're operating. However, it's not clear how this translates into tons of goods produced. Naturally, as your population grows, so too does the amount of each good that the population consumes, but there's no clear way to determine just how many tons of a particular good your residents require. This makes it needlessly difficult to anticipate upcoming shortages, and it's easy to get frustrated when you find yourself in the midst of a dairy crisis or similar shortage that could have been avoided with clearer information regarding supply and demand. Scrambling to create more facilities to produce whatever you're suddenly lacking works, and over time, through trial and error, you'll develop a better sense of how many production facilities you'll need for each of your goods, but that's hardly an ideal way to handle this important aspect of gameplay.

Indeed. And, it's an even worse problem if you're trying to run a real economy this way rather than a video game one. I've always been troubled by this aspect of games like SimCity and Civilization. If you as central planner don't build things like airports, ports, libraries, universities, temples or a colosseum, they just don't get built. If your workers don't build farms and mines, no entrepreneur steps in to do it. In SimCity, or at least the version I played more than a decade ago now, you have to specify rigid zoning and can't just let the city evolve. Unfortunately, any realistic game that requires the central planner to make all of these decisions will require that we encounter the calculation problem; it's neat to see the game reviewer complaining about it. Of course, the gaming would be a bit more boring for the player if he could just set some basic laws, a low tax rate, and try to stay on good terms with the other civilizations out there: the game is designed to maximize fun for the player, not to maximize utility for the simulated persons within the game. The more that games disguise the inefficiencies caused by the "economic planning" approach, the less will today's players appreciate Hayek.