We are now entering the realm of the ways and places where people participate in the economy.

Markets can be considered as the “physical” places where players are invited to trade, the tools that allow the exchange of currency and goods between players.

The institutions are closer to practices and rituals that the players will create around trading.

For example, it can be decided that the players of a group will share equally all the resources that they produce. Any new player joining that group is expected to follow the same principle. That’s an institution. If there is a corrupt cast of players in charge of making sure that the resources are « equitably » distributed, that’s communism.

Markets

Markets are the different interface that the player will use to participate in the economy. That means that they must be as easy to use and clear as possible so that the player doesn’t get frustrated and can freely exchange with others.

There should be different interfaces for the Player-led and the environment parts of your economy (look at me looping back on concepts from earlier, almost feels like a real course) though they should both work based on the same principles of UX/UI.

Everything should bring the player back to the markets. If the player runs out of something, a popup should suggest to go to the market to purchase more of it. The inventory should have a quick access to sell an item, maybe even have the average price that the item is currently being sold at.

Markets are made to be easily accessible, easy to use and constantly incite the player to get back to as a silver bullet to most of their problems.

Institutions

Institutions are much more outside of your control and will appear organically with the mass of players. If a group of players decides that they need to donate 10% of whatever resources they have produced every week for some kind of investment project, it will come from them.

However, what is in your control is the creation of systems and mechanics that will allow the players to create their own institutions.

You need to make sure that the player can trade directly with another player without requiring to go through a centralized system. The player should be allowed to exchange goods and services with minimal effort. Once again, the idea here is to remove as much friction points as you can to not deter the player from trading as trading can be easily taxed by the system which opens the possibility to make profits from it.

Basically, institutions will be born from the quality of the markets and other trading mechanics.

Why would you want to have institutions which might make you lose the fees that players would normally pay in a centralized system? Well, simply put, the more freedom and self-governance and the more tools players have to exercise said freedom and self-governance, the longer they will want to stay in our game. The longer they stay in your game, the more they will spend in the economy as a whole.

Feel free to add a small fee (make it invisible for best effect) on peer-to-peer trading within your game. However, the fee should be smaller than what the player would pay to the centralized system given that they will feel like they did all the work of finding the buyer and delivering the goods.