1) Method
1$ that I'm going to get in n turns from now is worth (1/(1+r) power n)$ now (r being the rate of discount that I am willing to choose).
1 beaker=1 gold (since I always can choose between these using the "tax rate" cursor).
The production cost of a caravan is 125 gold (stepwise rushbuilding with 1 shield in the box to start with).
The "true value" of the caravan is measured on delivery. Therefore the cost, which I name A (since A is not only for Alphabet ), is then 125*(1+r) power m (m being the number of turns travelling between origin and destination city).
The revenue is B (gold bonus) + B (science bonus converted into gold) + C (current value of the continued cash-flow, doubled in case of home trade).
Hence, the "true value" of the caravan is TV=B+B+C-A
(watching TV on the BBC, this should be quite mnemonic for people like SG or EST).

2) Results
The results given here are those of my first case study in that field, playing the Romans on a medium size random map (deity, 7 civs, raging hordes), and sending most caravans to my friendly neighbors, the Indians, onboard mighty triremes, but also a few to my own cities by land, for the sake of comparison.
More precisely, I studied 12 caravans (and the resulting cash-flow during 80 turns). 5 caravans were home trade between roman cities. 4 were fine foreign trade (goods in demand in indian cities) and 3 were second class foreign trade (goods delivered in India, undemanded there).
For each caravan are given:
B=gold bonus on delivery
TV2=true value of the caravan when using a 2% rate of discount ("long-sighted")
TV8=true value of the caravan when using an 8% rate of discount ("shortsighted").

Dye Pompei-Madras (250BC) B=40, TV2=40, TV8=-115
Silk Neapolis-Veii (50BC) B=3O, TV2=5, TV8=-102
Beads Cumae-Pisae (40AD) B=28, TV2=45, TV8=-72
Copper Pisae-Delhi (340AD) B=148, TV2=333, TV8=132
Dye Veii-Delhi (500AD) B=176, TV2=402, TV8=198
Silk Hispalis-Delhi (500AD) B=246, TV2=495, TV8=307
Wool Pompéi-Viroconium(520AD) B=28, TV2=29, TV8=-82
Wine Lugdunum-Viroc.(88OAD) B=80, TV2=159, TV8=-90
Salt Lugdunum-Antium(900AD) B=60, TV2=137, TV8=-37
Gold Pisae-Delhi (980AD) B=76, TV2=168, TV8=-7
Dye Cumae-Delhi (1200AD) B=40, TV2=125, TV8=-23
Dye Hispalis-Delhi (1340AD) B=47, TV2=83, TV8=-83

3) Conclusion
Early trade can be very rewarding (look at that
silk delivered in Delhi in 500AD: net profit ranging from 300 gold (shortsighted) to 500 gold (long-sighted).
But early home trade seems to be questionable (unless one gets much better opportunities than those shown here). All of us would prefer building wonders rather than getting such tiny profits.

On a more serious note, I have looked at OCC games, and discovered that the people with the earliest trade routes are always the fastest. Paul in particular seems to get his caravans off quickly.

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Go Redskins!

Further although you are correct that 1 beaker can be changed into 1 gold by manipulation of the tax rate - only by using caravans can one 'buy' beakers in addition to those available from a maxed out tax rate - this can on occasion be beyond price...

Good work keep the ideas coming

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Scouse Git[1]

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Scouse Git[1]

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Scouse Git[1]

On top of which you have chosen the most inspiring of the civic subjects for your debut!

Two criticisms of your approach. As A-Team points out that initial trade arrow has value not only in and of itself but additionally by providing the foundation stone upon which the further development of the city can be based. An early local route opens up the possibility of viable and timely investment in the marketplace, the bank, the stock exchange and the superhighway.

Secondly there is the effect on the citizenry. With just a little early trade a city can grow and its citizens be put to productive use, their happiness underpinned by those additional trade arrows. And with a happy citizenry comes the chance of more advanced government. Indeed, from the point of view of success in the game at least, I would go so far as to say it is this which is the primary purpose of trade.

I see no sign that you have factored those elements into your values.

Interesting investigation nonetheless.

An interesting question! Comments anyone?

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Scouse Git[1]

I give exploration a very high priority until I have exposed every last square on the board (haven't tried a gigamap yet but I reckon I'll still have my hiking boots on even then).

Getting (more than) my share of the huts is one aspect; finding (and occupying) prime choke points is another; making contact with other civs so as to open up the chance for diplomacy a third.

Then there is identifying prime real estate to which my doughty settlers can be dispatched; finding useful ofshore bases from which to harass distant AI civs; identifying which opponent looks a potential threat and which not; finding trading partners; finding barb cities and spawning sites. The list is endless.

I'd go so far as to say that exploration stands equal in importance to expansion and defence throughout.

Just about everyone prefers the earlier (and faster) phase of the game to the later stages and one of the pleasures, for me, in the opening phase is seeing how I can squeeze out the resources for another unit to send exploring when I am also keen to keep up my expansion, secure my borders and push on with developing infrastructure.

But if I ever notice that I've got less than two or three guys out there poking around I drop everything to redress that particular balance.

La Fayette

Your point about building in some value for long term effects is well made. But you measured over a shortish time scale so it can be no surprise that the foreign routes look so much better. The one time initial bonuses are overweighted.

I have played many games in which I traded only with my own cities. As your first post rightly says, sometimes one gold/one arrow to-day is worth many more a century or two hence. As someone else once said, there is a tide in the affairs of a civ and early local routes often go in when that tide is at the full. They allow a young city to prosper, to fend off interlopers and to help its civ keep up or forge ahead of others in the tech race. Monarchs in particular have always needed honest traders.

I fear I cannot build on your work by suggesting how to turn this into a refinement of your numerical values.

In the meantime, I stick to my answers to Blaupanzer and SG a few days ago:
The "true value" is not true (I know it and I claim that there is no true value), but it is true enough to help one choose the right investment at the right time.
The AI is so dumb sometimes that many of us manage to win at deity level after having made dozens of wrong choices (you and I go scouting,...SG doesn't ).
After having built a caravan early in the game, I can choose:
-building a wonder,
-home trade,
-foreign trade (sending food to a city is generally not a very good choice then).
I never wrote or thought that one of those choices is better, but I think that the "true value"(discounted benefit minus discounted cost) can be greatly helpful when choosing.
You plead in favor of home trade and I won't say a word against it (people building strong SSCs ASAP can greatly benefit from such a choice).
I only wrote that this is not always true (in my case study, there was no fat SSC and foreign trade prooved to be better, that's all).
Just one more word: I don't think I overweight short-term effects at all, since YOU choose your rate of discount (and I measure the effects during 80 turns, and 80 turns is quite a long time in civ2).

I do by no means claim that what I hence write is correct, feel free to point out the flaws. There are many, no doubt!

First of all, you argue that this method is a good way of deciding whether it pays off to make the investment (i.e. rush buy the caravan and trade with it) or not, and I agree with you. If the net present value (henceforth NPV) is positive, then go ahead and buy it. But isn't this only the soccer game's first half?

The problem I have (as pointed out by others) is that the NPV of this investment must be compared to the net present values of its alternatives. Then you choose the alternative yielding the highest NPV.

Now, you make clear that you don't want to pass a judgement on whether early trade is better than other alternatives. IMHO, this has to be done in order to properly evaluate whether to make the investment or not. Per definition it does not pay off if there are better uses of the spent resources out there (meaning yielding a higher NPV).

How can you do this? Obviously you have to analyse the alternatives using the same method you propose.

Do the same calculations you have done above when trading with the camel, but include all the gold spent to send the camel to its destination. For example, if you're on an island you need a trireme. There is a cost associated with rushing it, just like there is with the caravan. This cost reduces the caravan's value and should be incorporated when calculating it.

When considering alternative uses of the caravan, make sure to include all benefits and costs as well. This is what you do with the caravan's future benefits when you trade with it (C in your post above), in all fairness this should be done with the alternatives too (or simply cancel them out, deleting C in your original calculations).

Hence, 50 wonder shields are indeed worth 200 gold, but the future stream of benefits associated with the wonder also has a (positive) present value in gold. For example, Colossus and HG yield extra trade adding to the value of building the wonder (the caravan should only get credit for one fourth of these benefits! ).

This is not to say that your proposed method is wrong, but when used it should be implemented in a thorough and adequate way.

If we're back where we started why bring this up at all? Simply because in these forums the value of trade has been asserted over and over again by almost everyone (including yours truly, who is a big fan of trade! ).

However, the early landings by DaveV (1595 AD) and Arii (somewhere in the 11th century?) without building a single caravan for the purpose of trade (correct me if I'm wrong here, it was some time ago I looked at DaveV’s log) is clearly evidence against the case of trade. Until a trader beats those single player record years, the burden of proof is with the trade side.

Hence the need for a complete analysis of all costs and benefits of rushing that caravan!

Including not building the caravan in the first place. Which is best, 4 camels or 5 settlers?

../../Forum3/HTML/000748.html?16

Seems I was wrong about no trade! What about Arii's game, is there a log available somewhere?

../../Forum3/HTML/000803.html?11

Lots of trade routes in that one too!

But I REFUSE to concede to this ICS thing, REFUSE, grumble grumble pout pout.

Now, HOW can I come up with a perfectionist way to match this, plot plot puzzled frown.

I think the next five years of my life have just gone down the pan.

Unless Civ 3 finally consigns the great game to the bin.

Even then ARII's achievement will deserve to be remembered.

I feel somewhat on the same line as (I suppose) Scouse Gits (with GL and starting techs), oedo (with statue and unfinished) or Slowthinker (with dips and spies): much has been said and achieved by the 'masters' (I won't name any, since you know them better than I do), but much remains to be tested and researched by those interested. That is one of the numerous reasons why this game is GREAT.
That is also why I published this case study: trying to make some people react otherwise than saying "I use home trade and I'm glad with it" or "a settler is better than a caravan". That is also why I thank you for your post.
Then, let me answer briefly:
1) I suppose that none of us wishes to play civ2 with a computer #2 in his back, doing 1/2 hour economic calculations before any move. That's why I tried to make it simple.
2) Even if the "true value" is not true (and I am #1 to state that it isn't), IMO it can nevertheless be helpful.
For example, if we stay in the field of "caravan vs caravan", I state that food caravans sent to the capital are not ALWAYS the best solution when trying to build a wonder and that home trade is not ALWAYS the best solution when trying to boost the number of trade arrows in one's civ. I hope that the "true value" will help convince some players of that plain fact (and I intend to be back with more results within a few days or weeks).

But from my visits here to date I would say you are very far from being alone in feeling the desire to subject different aspects of the game to rigorous analysis.

William Keenan's Barbarian Paper is a particularly striking example.

And try searching the threads for some of the analysis on combat outcomes.

The fortnightly OCC comparison games have led to a good deal of well backed up work, by Tonic and others.

But you are right that many of us, myself included, rarely if ever turn to the cheat menu and embark upon a systematic examination. Nevertheless the sheer volume of Apolytoners' experience built up during play regularly generates an insight or a useful/interesting quirk.

I value contributions whether based on science or intuition. Speaking for the intuitive tho', I am very glad that the scientists such as yourself are generous enough to share with us all the fruits of your labours.

Money in Civilization doesn’t seem to have a measurable discount rate. In real life, it can be invested (various stocks, bonds, etc) but that function is not available in Civilization. Nor is the game designed as a money making game, so money goals are not built into the process, as they are to varying degrees in a corporation that manufactures a product or provides a service for the public. In Civilization, one can calculate the cash flow in a given project (a Caravan, for instance), but discounting future revenues is not appropriate. Therefore, if net present value is just an arbitrary number with no meaning, what is the point of trying to calculate it?

On the other hand, the concept of “opportunity cost” is very valid in Civilization. Building a Caravan, for example, means one has forsaken the opportunity to build something else. Thus, different builds should be evaluated against one another. I’m not sure, however, that $ (or francs) is the proper measure. The most critical element in Civilization is time. How do you meet all your goals, or objectives, in the amount of time you have? Critical path analysis helps out in this case.

Knowing that the coal going into London will only yield 28 gold and 28 science beakers, I have at times turned the caravan around and headed it back to Rome or Veii to put it to work in a Wonder building project. That may be too shortsighted to me, but in my mind, if I can't get at least 50 gold/beakers upon delivery of a commodity, it is more valuable to use in building a Wonder.

Your comments?

It was not my intention to disregard your effort. On the contrary, I found it very interesting and impressive! Let me quote someone on these forums you know much better than I do.

quote: Originally posted by La Fayette on 01-12-2001 10:36 AM I'm pretty sure that you have noticed what I have noticed when reading the archive to this forum: many many posts stressing the importance of this and that, and long term effects and the like.

Yes, I have!

quote: I feel somewhat on the same line as (I suppose) Scouse Gits (with GL and starting techs), oedo (with statue and unfinished) or Slowthinker (with dips and spies): much has been said and achieved by the 'masters' (I won't name any, since you know them better than I do), but much remains to be tested and researched by those interested. That is one of the numerous reasons why this game is GREAT.

I couldn't agree more!

quote: That is also why I published this case study: trying to make some people react otherwise than saying "I use home trade and I'm glad with it" or "a settler is better than a caravan".

I agree with you on this too, especially since I am one of those people who post stuff without running experiments first and man do I wish I had in some cases! .

Looking forward to read about your continued tests and the results!

quote: Originally posted by Hawkman on 01-12-2001 01:46 PM On the other hand, the concept of “opportunity cost” is very valid in Civilization. Building a Caravan, for example, means one has forsaken the opportunity to build something else. Thus, different builds should be evaluated against one another. I’m not sure, however, that $ (or francs) is the proper measure. The most critical element in Civilization is time. How do you meet all your goals, or objectives, in the amount of time you have?

Definitely agree! The constant trade-offs you face in this game is what makes it fun and difficult. Unfortunatly, that is also why it's so hard to evaluate different (long run) strategies and even (short run) actions and compare them against each other. This is IMHO not an excuse to not even try to, though, as Monsieur La Fayette heroically demonstrates.

quote: Despite my profession, I usually follow my gut feeling on this. Don’t most of you use this criteria, the gut feeling?

Yes, and with inconclusive results!

EST
Shall we say that all the authors mentioned in SG's Great Library are great thinkers and great players?
I shouldn't have named anyone, since naming a few means forgetting many (I'm a humble man studying on a cobble-stone street and would be very glad if something I wrote came to be considered valuable enough to be mentioned up there some day).

Poppawoppa
I agree: risks (of wrong or delayed or no delivery) must not be forgotten. Please, let me answer Hawkman first.

3) Side effects and long term effects
I wished to write a quite short and simple post when I started this thread. That's why I didn't mention them. I thank you all for posting about them (risks, building ships for foreign trade, citizenry, and so on) and I stick to one short answer "the true value is never true, but, in many cases, it may help taking right decisions without daylong calculations".

Your English is awesomely good. And now you casually start using Swedish?

Is it a gift which you have or do the teachers of Albi specialise in foreign languages?

By the by, "rate of discount" seems fine to me but I am doubtful about "power n". "Power 2" in this sort of context usually means "multiplied by itself, "power 3" multiplied by itself twice etc. That doesn't seem right in the context of your posts. Do you mean something like "discounted to allow for". If so I expect there is another symbol for that. Unless I am dmonstrating exactly how shallow my grip on maths/economics is, of course.

My instinct tells me the short-term value of a trade route early in the game is relatively small, so I don't try to establish lots of them. Each city I view as a manufacturing unit, producing goods and also having a need to build up its productive capacity. Production therefore has to be balanced between these two conflicting priorities (for each city). One thing I do fairly early in the game is start City A to building the Colossus, while other cities produce three caravans which are sent to City A where ownership is transferred (to City A) and the caravans are then sent overseas to establish trade routes for City A. With the Colossus and three trade routes, this city is on its way to becoming an economic powerhouse. Add two more wonders (Cop's Observatory and that College that comes later) and the city is a powerful research center. Meanwhile the other cities may not have many trade routes until about the time that factories become available.

You can say that I would have more cash if more trade routes were established early, and that is true. But I need relatively little cash until I have to build factories, while my need for military units and city improvements is much higher. Would more cash help me to build more of these things? In the short run, yes, but in the long run I would never have enough cash if I pursued that strategy.

Wouldn't it be nice if we could capture caravans? That would be the ultimate solution.