[Basic] Skills of the week: Economics, Finance and Market Analysis

[wellspring]

Originally Posted by CoyoteGestalt

Up to a point, sure - but my thinking was that where Accounting lets you process the data, it's not really a predictive skill - Economics would let you know where to meddle and guess what the long-term results would be, including possible undesirable secondary consequences.

For that matter, it's a good skill in any number of situations where you need to guess what the long-term unintended effects of major events could be - eg "Blowing up the dam will drown the invading army today, but will the people we're trying to rescue starve next year anyway without its irrigation system?"

The thing is, if you're talking about an Infinite Worlds-like setting, then it's a two part process.

First, you have to figure out what's going on. All those convenient statistics and public records that we're used to drawing on here on Jackson-1 might not be available. A closed society, wildly different views on economics, or lower level of development could all lead to Homeline economists having to measure everything themselves. That's the domain of Accounting, IMO. I suppose you could roll into Research or Math (Stats) or Economics.

Only once you have the data in a commensurable, usable form can you start to work on interpreting how changing something will play out. That's the domain of Economics and Math (Stats). Anybody can take the standard deviation of a financial instrument once its performance data is available.

IMO the data-collecting task is far more work and far more demanding than the data-interpreting task.

Just an opinion.

[CoyoteGestalt]

Originally Posted by wellspring

The thing is, if you're talking about an Infinite Worlds-like setting, then it's a two part process.

First, you have to figure out what's going on. All those convenient statistics and public records that we're used to drawing on here on Jackson-1 might not be available. A closed society, wildly different views on economics, or lower level of development could all lead to Homeline economists having to measure everything themselves. That's the domain of Accounting, IMO. I suppose you could roll into Research or Math (Stats) or Economics.

Only once you have the data in a commensurable, usable form can you start to work on interpreting how changing something will play out. That's the domain of Economics and Math (Stats). Anybody can take the standard deviation of a financial instrument once its performance data is available.

IMO the data-collecting task is far more work and far more demanding than the data-interpreting task.

Just an opinion.

Good points, I need to think on this for plotting the next campaign. Thank you!

[Agemegos]

Originally Posted by johndallman

Economics is the IQ/H theory of markets, financial systems and money in general.

That's not what I was taught when I was an economics student, and it doesn't describe what I did as an economist. I studied road congestion and helped to plan road and rail construction. Money is a veil. The actual object of study is the allocation of [scarce] resources among alternative uses, or perhaps the systems by which societies allocate resources among uses and distribute products among consumers. Economics includes the study of non-market systems and systems that don't use money.

Even when studying and modelling market-based economics systems, most economists don't know or care much about how the markets themselves actually work (one exception is financial economists working for banks). We — they, now, I suppose — treat the markets as black boxes.

I don't think I've ever made significant use of these skills in a game. But I know several participants on these have studied Economics. What have you done with it?

I've mostly only ever used it as a "payload skill", i.e. a skill that PCs had to have to justify their presence on a mission but that it didn't matter on adventures why they were present but only that they were present. In particular, I have run sci-fi exploration campaigns in which the PCs were on the spaceship and in the landing groups to carry out studies of the planets that the ships visited, so all needed top flight abilities as planetary scientists, life scientists, or social scientists. But the actual adventures were about what happened on the planets while they were there, not about their work.

[Tymathee]

Suddenly I'm inclined to imagine what GURPS: Adventures in Economics, Finance, and Market Analysis would look like.

Men and women in emaculate professional wear, sitting around a table in a office space meeting room. Our vision of the scene is set in shades of black, grey, and uncanny white to a near noir atmosphere, their space decorated with scattered papers, pens, and a steady supply of whiskey on the rocks. The air is filled with a haze of cigarette smoke wandering from the ash trays upon the table, light from the venetian shades filtering in through the smoke. The topic at hand? The American economic crises.

Intellectual analysis from the player characters based on the context of details provided by the GM. Its pacing is broken up here and there by soap opera-esque melodrama.

[Agemegos]

It is thrilling stuff, apparently. I had many classmates and a cousin who took their economics degrees into finance rather than policy, and they were burned out by thirty.

I lasted to thirty-five.

[Agemegos]

Originally Posted by johndallman

None of these skills are TL-dependent

This is part of a wider issue of TL doing double duty for both technological sophistication and historical date of introduction. IRL there was no economics worth a damn before TL 5, and a damn was all it was worth until TL6. But in another setting advanced economics could be developed or retained in conjunction with the associated mathematics despite retardation or loss of technological manufacturing capability.

Some futurist and utopian speculations (and associated SF settings) imagine that in the future there will be a disciple for the design and management of economies that corresponds to [an advanced version of] economics in the way that civil, electrical, and mechanical engineering do to physics, chemical engineering does to chemistry, and GURPS "Bioengineering" does to physiology and biomechanics. It seems to me that if it does then when it does the training for "Economic Engineering" will need to add substantial elements of engineering design and control theory to the existing matter of economics, which lacks those entirely.

they don't take Cultural Familiarity penalties, but there's a case to be made for familiarity penalties in societies significantly different from the ones you learned them in (IW, p.181-2).

I had a colleague who got his PhD at the University of Beijing in the Eighties, and he adapted very easily to practising economic analysis in Australia. And I met a few former Soviet economic planners at conferences in the Nineties — they had apparently been well aware of modern marginalist analysis even though they weren't allowed to use it and didn't have meaningful prices to use it with.

[Fred Brackin]

Originally Posted by Agemegos

That's not what I was taught when I was an economics student, and it doesn't describe what I did as an economist. I studied road congestion and helped to plan road and rail construction.

I might have handled that with rolls v. Administration Skill. It sure sounds like you were working for a bureaucracy (Australian Ministry of Transportation or something like it?) and were helping that bureaucracy to perfom its' functions efficiently.

This is choosing a Skill by goals rather than methods but who you're doing the analysis for has to effect what the answer is.

[Refplace]

Originally Posted by Agemegos

That's not what I was taught when I was an economics student, and it doesn't describe what I did as an economist.

The name of traits in GURPS is typically designed for general understanding and not exact language which few except specialists would understand.
What words would you substitute that would be easily understood by most readers?
ie: High school or lower, specifically American high school.

Originally Posted by Agemegos

This is part of a wider issue of TL doing double duty for both technological sophistication and historical date of introduction. IRL there was no economics worth a damn before TL 5, and a damn was all it was worth until TL6. But in another setting advanced economics could be developed or retained in conjunction with the associated mathematics despite retardation or loss of technological manufacturing capability.

Sure but some simplification for gaming is needed and in this case you could also have split TL. More relevant though I think the TL assumes tools to help research and analyze. Higher TL equipment and mathematical models seem to me to be very helpful than lower TL and crippling if your used to having them but suddenly dont.
Cool thing is a higher TL person in a lower TL society would have some advantages from superior math.

Originally Posted by Agemegos

Some futurist and utopian speculations (and associated SF settings) imagine that in the future there will be a disciple for the design and management of economies that corresponds to [an advanced version of] economics in the way that civil, electrical, and mechanical engineering do to physics, chemical engineering does to chemistry, and GURPS "Bioengineering" does to physiology and biomechanics. It seems to me that if it does then when it does the training for "Economic Engineering" will need to add substantial elements of engineering design and control theory to the existing matter of economics, which lacks those entirely.

Like better modeling and forecasting of possible effects from various potential actions or events? Seems like we have that though its early as too many economists disagree with each other. Its politized.

[Agemegos]

Originally Posted by Refplace

The name of traits in GURPS is typically designed for general understanding and not exact language which few except specialists would understand.
What words would you substitute that would be easily understood by most readers?
ie: High school or lower, specifically American high school.

Would

"Economics is the rational and empirical study of the systems that societies use to allocate scarce resources among alternative uses and to distribution products and services among different consumers, and the performance of those systems"

be too fancy?

How about

"Economics is the study of resource use, production, trade, and the supply of goods and services to consumers."

?

Like better modeling and forecasting of possible effects from various potential actions or events?

Economists already get plenty of training in building and using models as predictive tools. But they don't get any training at all in engineering design, methodical problem-solving, or optimal control theory. Well, at least I didn't get any such training in my economics degree and found that my colleagues were completely unfamiliar with them — didn't even know that they exist — when I was an economist.

Economic knowledge and theory have a lot of room to improve, especially in macroeconomics. Economics in AD 2340 might be as far ahead of Alfred Marshall as physics today is ahead of Isaac Newton. Such developments might improve the claim of economists to be scientists, but it won't by itself make them into engineers. Scientists predict how things will behave or develop, engineers design and build them to behave in a specified way (or rather, to solve a specified problem).

Think of a bridge. Both a structural engineer and a physicist specialising in statics can calculate the loads in the structural members of a bridge, given its design. And they can both predict how it would fail if it were over-loaded. But if you have a river with homes, factories, and shops on both sides and government wants to build a highway through the area, the engineer can work out what kind of bridge to build and where, and can design and manage the process for building an appropriate bridge, whereas the physicist lacks the appropriate training and experience. At the moment, economics has part of and is working to improve the kind of knowledge about economies that the physicist has about structures. When economists try to manage economies they do poorly in part because we don't understand economics as well as physicists understand statics, but also and more profoundly because we have no systematic knowledge of design, methodical problem-solving, or the control of complex dynamic systems. Physicists aren't trained in those things either, but engineers are.

Some SF supposes that in the future there will be economies that are effectively designed and managed. For that to happen there will have to develop an engineering-like discipline that corresponds to future economics in the same way that GURPS's Bioengineering corresponds to physiology and biomechanics.

[Fred Brackin]

Originally Posted by Agemegos

Would

"Economics is the rational and empirical study of the systems that societies use to allocate scarce resources among alternative uses and to distribution products and services among different consumers, and the performance of those systems"

be too fancy?

How about

"Economics is the study of resource use, production, trade, and the supply of goods and services to consumers."

?


.

I don't care for either.

My own attempt would be something like "Scientific study, modelling and prediction of monetary transactions". though that seems to take away a role from Market Analysis (which might be a good thing).