                               Concept : Market

 The Empire market is an international exchange where buyers and sellers  with
varying  price  points  get  together  and  trade commodities.  Trading occurs
automatically during the update, without  intervention  from  players  and  in
accordance  with  the  shortfalls or surpluses of the various countries around
the world.

Nations describe their optimum commodity levels by placing threshold values on
warehouse sectors.  Instead of being interpreted by the commodity distribution
system as they are with non-warehouse sectors, these threshold levels indicate
surpluses  or  shortfalls  in  specific commodities in those warehouse sectors
where threshold levels are present.

If the level of a commodity rises above the threshold level, that indicates  a
surplus  which  is  eligible  to  be disposed of through market sales.  If the
level of a commodity drops below the threshold level, that creates a shortfall
which is eligible to be satisfied by market purchases.

To determine when purchases actually happen, a nation must describe its  pric-
ing strategy for each commodity.  These can loosely be described as supply and
demand curves.  For each  commodity,  there  are  two  sets  of  numbers;  the

                               Concept : Market

low/high values on the demand side, and the  low/high  values  on  the  supply
side.

For the supply side, the low value indicates the price  at  which  the  player
will  provide  0%  of  his nation's surplus for sale on the world market.  The
high value indicates the price at which the player will provide  100%  of  his
nation's surplus for sale on the world market.

For the demand side, the low value indicates the price  at  which  the  player
will  purchase 100% of his nation's shortfall from the world market.  The high
value indicates the price at which the player will purchase 0% of his nation's
shortfall from the world market.

At prices between the low and the high values, interpolation will be  used  to
determine  the actual amount that will be purchased or sold at that particular
price.  Demand prices below the low and supply  prices  above  the  high  will
still  result  in  only 100% values for the amounts supplied or demanded (i.e.
the curve is artificially flat at that point).

During the update, the Empire trading algorithm sums the aggregate surplus and

                               Concept : Market

shortfall levels based on the threshold levels of all the  warehouses  in  the
world.   The  willingness  of nations to buy or sell particular commodities is
determined by the low/high pairs of the supply and demand values set  by  each
country.   For each commodity, the supply/demand solution space is searched, a
price is fixed, and trades for that commodity are executed at that price  dur-
ing that update.

Suppose, for example, that country Froom 93 had  a  demand  pair  for  oil  of
10/50,  and  a  shortfall of 500 oil from warehouse at sector 2,2.  This means
Froom 93 would buy 0% (0 oil) of the needed oil demand if the price were fixed
at  $50, and 100% (500 oil) if the price were at $10 (or below).  If the price
were fixed by the Empire trading algorithm at $30, a trade for 250 oil  @  $30
would occur, with the oil being deposited in the warehouse at 2,2.

Note that unlike in previous Empire markets, there is no way to prevent a par-
ticular  buyer from purchasing your commodities.  The market allows no playing
of favorites, so if you don't want to provide guns to your enemy, don't  place
them on the market in the first place.

Note also that in each of the trades, the Empire Exchange silently takes a cut

                               Concept : Market

of your profits as a fee for providing this fine service.

See also : market, price.

