Question about economics

[SDragon]

I'm trying to work something into my current Eberron campaign, but I'm not sure how to realistically handle it.

The scenario is that one of the PCs unwittingly introduced an object of relatively high value to a market with a relatively small, and fairly isolated barter-based economy, but I'm not really sure how that would affect the market's economy. I know that in a currency-based economy (technically barter-based, but I think with some differences), creating more currency would cause inflation, as the currency used to make purchases wouldn't be nearly as rare (and as such, not as valuable), but I'm not sure if the same thing happens when it's the goods that become more common. To add to the confusion, because the market is very barter-based, goods can just as easily be currency, themselves.

What would be some expected effects of something like this, for both the merchant who received the item, and for the market in general? I know the shortest-term effect on the merchant would be sheer giddiness (wouldn't you be excited if somebody plopped something with a value equal to, say, 10% of your nations economy?), but would it continue to be a good thing, or would it end up ruining things for everybody?

[Wensleydale]

A single object? Well, that's kind of like introducing a massive diamond into a society that could never really afford to pay its true value in coinage... it wouldn't really affect the economy, because there's a limited amount you can buy with it in one chunk, and you're not really able to split it up.

What exactly is the object?

[SDragon]

An Armbow, worth 20k GP, but only really usable by warforged. I  gave it to the character knowing that she'd have no use for it (elven druid), and I didn't really notice the price until she had already given it away.

[LordVreeg]

I think we need some more data.
How isolated is the settlement?  what is it connected to?  is it rare and powerful (so that it would cause a cascading series of more and more powerful people fighting over it)?  Even without the power part of it, connected areas will hear of it and want to ghet their hands on it.

were the PC's duped into selling it at way below it's value due to the fact no one has the value to put up that kind of value/cash?

if it is a rare item, don't forget the wonderful Gold-rush effect of other adventurers.

But the effect on the economy of a single item will be minimal unless it brings with it an increase/decrease in transactions.  

[Elemental_Elf]

What did the PCs get for this wondrous item? If the market paid them with cows, jewelry, cups and other barter based limited goods then the barter market would go all to hell, as there would be a much smaller amount of things to barter with in that town, supposing of course the PCs don't settle down in that particular town.

The only way to right the economy again would be to break up or re-sell the item. That way the town's economy is reinvigorated with barter-able goods.  

EDIT: I didn't refresh before posting.

I made a few assumptions:

1. The whole town bought the item, not a single person
2. The town relied on very basic bater goods (Cows, Pots, etc).
3. The town was rather small.

[Matt Larkin (author)]

My gut is to go with Wensleydale. While people fighting over the object might be interesting, I don't think it's likely to dramatically change things (unless as EE says, they pay with lots of goods--but why would they do that for an armbow they can't use?).

My response would usually be that most towns wouldn't want something like that unless it was free. Since it's not divisible (or even useful), it's not going to change to economy much if given away. Also, you have to ask yourself whether worrying about the economy of a small town is worth the effort (if the group loves microeconomics, maybe it is).

[Elemental_Elf]

but why would they do that for an armbow they can't use?).

Because it's shiny! :P

But in all seriousness, I would also agree with phoenix and Vreeg, the item is bought and the world keep spinning is the easiest and cleanest solution to the problem.

Of course a fun time could be had if the item is cursed to bring misfortune to those that touch it... :)

[SDragon]

I guess "isolated" isn't as good of a word as "underground". The market itself is run by (and visited by) mostly hobos and vagabonds, and it actively avoids having a centralized location, to keep it from being a "sitting target" for undue hassle.

The market as a whole didn't purchase the Armbow. The PC promised a goblin merchant some sort of payment for information, and since she just happened to have ransacked the armbow off from a warforged, she decided to give that. Essentially, it came into the market for free.

The market does tend to rely on very basic barter goods, but very little of it as ultimately anything more then rubbish that managed to find a second use (blankets with "only a little spot of" mildew, a broken pair of scissors "for when your nails get too long", etc.).

The armbow, used conventionally, isn't really practical for anybody that goes to the market, but as EE said, some people like new shinies, and I imagine there might be the occasional buyer who would appreciate an improvised security measure.

I know I could very easily say that they got the armbow and nothing changed, but I'm thinking of reintroducing the market into the campaign, and I want an idea of some way to make the player feel like the character affected the world, especially if it could, in any way, create possible plot hooks.

[Matt Larkin (author)]

Well, if an armbow is really worth 20k, then it's a prime target for thieves. The merchant could blame the PC for bringing trouble down on him.

Or I like EE's cursed idea, too.

Or maybe said merchant sold it a passing warforged for lots of money, which he then used to buy useful goods from other merchants, thus inflating the economy of the market (and maybe whole town). They left it a dump and come back to find a bunch of new construction.

[Elemental_Elf]

I like the 'dark vengeful goblin who wants to kill the PC's with the very same unlucky Armbow that destroyed his life' shtick simply because it leads to more Plot hooks than a fully revitalized underground market. Though you could use both with a little imagination.

Give the Goblin a Warforged Arm, rules located in Faiths of Eberron, and let him use the Armbow against the PCs.  You could use him as a reoccurring very dark and insidious enemy or a hapless comedic enemy that shows up every now and then. Either way, you could use him as a bridge between adventures and on nights when your campaign just falls flat.

As for the Market, perhaps you could use another merchant from that market to reintroduce the evil Goblin. Perhaps the merchant wants the Goblin dead or perhaps the merchant is used by the Goblin to lure the PCs into a trap. Either way, you have a Goblin enemy and a reason for the PCs to return to the Market (either for ther merchant's reward or his head).

So my idea and Phoenx's could work together beautifully.
 

[LordVreeg]

Oh you actually want it to affect the economy.  Different question.

[blockquote=SD1984]I know I could very easily say that they got the armbow and nothing changed, but I'm thinking of reintroducing the market into the campaign, and I want an idea of some way to make the player feel like the character affected the world, especially if it could, in any way, create possible plot hooks.[/blockquote]
 Have the mercahnt who bought the thing dissapear.  Have people (thieves, police, agents of nobility looking for the market and the merchant.
Have some of these find the players, some threatening, some offering money to find the merchant.  Maybe a couple of 'old friends' who the mercahnt owes money to are also on the hunt.

[Snargash Moonclaw]

Always remember, the ultimate value of any good is "what the market will bear." Rogue and other more mercantile characters will have some understanding of the principal - rogues encounter it when fencing goods - the market on a "hot" item will only pay a portion of its "free market value." No one will pay the PCs what they haven't got - but there are always those who will try to swindle them - elaborate cons, switches, stc. could be a lot of fun, as well as outright theft attempts.

I have deliberately allowed PCs access to overpowered items in the past - always distinctly (and readily) identifiable - and always far more trouble than they're worth. Showing up in a city with a valuable lost heirloom had 3 major families in an uproar - the original owners, another claimant (technicalities of marriage and inheritance) and a major rival of the other two. The PCs were only too glad to restore the sword to it's proper owners and clear out of town ahead of the constabulary - charges leveled *started* with two counts of incitement to riot given the size of the familial clashes which occurred in the streets in trying to gain possession. . .

Anyway, in a barter based economy with little to exchange, deals can also be made for extended credit if they can find a reputable merchant house - a great way to establish a longterm base and re-supply point.

As far as the basis of the economy - in a barter base, a good becoming more common will reduce it's trade value just as in a monetary base - supply and demand. The flip side of that equation is to ask, "What is the demand?" - even a unique item of great magical power is worthless if no one wants it. Or if one person wants it and nobody's willing to bid against them. Are there any outstanding legal claims/embargoes involved? "All silvered weapons are claimed as property of the (lycanthropic) crown?" "Shape changing and all items which facilitate it are outlawed. . ." Either of the latter can actually make the item worth even more to the right buyer - if the PCs can locate such before they're caught. . .

[SDragon]

If I use the whole inflation thing, wouldn't that put the merchant in a pretty high position? It might be interesting to have the market run by a goblin, all because of the PC...

[Midgardsormr]

I like that notion.  Here's what I would do with it:  The goblin takes the item somewhere else where he can get paid something close to its actual value.  He now has more money than his entire tribe would be likely to see in his entire lifetime, so he attempts to retire as an aristocrat.  

Of course, a goblin aristocrat doesn't go over so well, and although he's clever, he might not be bright enough to properly defend his new wealth.  Within months, he's squandered much of his wealth and had the rest either stolen or swindled away.  Now he's got tremendous debt on a manor house he can no longer afford to keep up, and he lays all the blame for his troubles at the feet of the PCs.  

And now it's even become an object lesson about how to treat a windfall of cash.  Lottery winners beware!

[Haphazzard]

Essentially, it came into the market for free.

This is economics, there's no such thing as "free."  So for all intents and purposes, rip that word out of your dictionary.  As a player I would love to see the goblin as a recurring (perhaps comedic) villain.  There really are a lot of ways you can spin this quest-wise.  Even with an effect on the market, it depends what he does with the item.  If nobody here can use it it's of no value.  However, if he can find a place that it does have value, he'll probably sell it there (assuming he doesn't have to go too far and isn't attacked by thieves who know of the item and it's value).  Even if it's worth a lot there do they barter, or do they use coins.  If they use coins and refuse to barter the coins are probably worthless to him, so he'll probably just keep it.  

Now assume he does sell it for high value.  Does he trade for another single item or two, or does he trade it for lots of things?  If he comes back with lots of things you're talking inflation.  Hyperinflation, potentially (where there are so many of the item it's value is rendered worthless).

Whatever you do, and however it's affected remember these key things:
-There's no such thing as a free meal
-Something is only worth as much as people are willing to pay for it
-Barter systems go off of items of "equal" value
-A cup of water isn't worth as much to someone living on a lake as it is to someone living in a desert