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[GoblinCookie]

This would screw up the whole economic system being proposed here. Everything should always be decided based on profit (i.e. maximal value, not money). Otherwise you're undermining the economic assumption. The reason for the economic assumption is that actual economics is what works in a system where everybody is intelligent and selfish. When you deviate from that, the player of the game (who unlike your shortcut program is maximally deviant and selfish) will be able to exploit the hell out of it, making it less fun.

I am of the opinion that trades should be determined based primarily upon utility and then seconderily upon value.  First entities seem to acquire the needed items and then they try to gain the best possible deal for all items, taking into account quality and things at this point.

In the example of quotas, the exploits are pretty easy: just buy up all their "surplus" junk beyond their quota and get unfairly and unrealistically low prices for it, then go sell it for the profits they SHOULD have gotten if they actually asked a proper economic price for it instead of arbitrarily falling off a value cliff once they hit their quota. The player just gets to soak up a bunch of excess profits he doesn't deserve, which makes it less realistic, less challenging, and thus less fun.

That is only a problem if you can find someone to buy your surplus junk.  The problem is that they trade too readily, particulary in Adventure Mode. 

There ARE some things that physics would provide real underlying numbers for. Like a dwarf actually needs X many calories a year to survive. That's not arbitrary, that's biology. But although this will affect value curves, it would never act like a sharp cutoff quota where they stop valuing any food worth anything once they're full. That's just like a big "rob me blind" flashing neon sign for the player if they do that.

Food is not worth anything if you do not need to eat it and you cannot sell it.  You will trade all the food you have for anything at all that is valuable, because as nobody else is bidding for the food you are actually setting the price (in food) and they will happily buy anything they want at any price at all.

[Dirst]

I am of the opinion that trades should be determined based primarily upon utility and then seconderily upon value.  First entities seem to acquire the needed items and then they try to gain the best possible deal for all items, taking into account quality and things at this point.

A microsystem to generate utilities isn't terribly complicated, though it'd likely be computationally intensive until optimized.  From individual utilities in the fort and distributions-of-utilities at other sites, you can calculate demand curves.

The hard part is creating the supply curves.  In a world with constrained labor, there is a cross-elasticity of supply that needs to be taken into account.  Anyone who's played the Civilization games has run into that why-can-I-only-build-one-thing-at-a-time issue.  Some DF goods also have fairly complicated supply chains, but fortunately there is a mathematical solution to that using input-output matrices.

[GavJ]

That is only a problem if you can find someone to buy your surplus junk.

In the example I was talking about, this isn't a problem, because they artificially capped their trade due to a quota, so the people who are available to buy the stuff are simply the ones who were artificially denied trade due to the quota being hit.

Quotas, tariffs, etc. ALWAYS create inefficiencies, and in a world like DF where you have basically no oversight and can slaughter your merchants if you don't like their deal etc., inefficiencies are almost 100% able to be exploited ruthlessly by the player

[GoblinCookie]

In the example I was talking about, this isn't a problem, because they artificially capped their trade due to a quota, so the people who are available to buy the stuff are simply the ones who were artificially denied trade due to the quota being hit.

Quotas, tariffs, etc. ALWAYS create inefficiencies, and in a world like DF where you have basically no oversight and can slaughter your merchants if you don't like their deal etc., inefficiencies are almost 100% able to be exploited ruthlessly by the player

The problem with the game as it stands is not that they trade too little but they they trade too much.  There is a whole raft of basically irrational economic activity going on in the game because the computer does not understand utility only value.  The player ruthlessly exploits the system of course.

Fortunately the damage is limited by the fact that surplus items are objectively worthless regardless of the game mechanics say, I can aquire a ridiculous amount of stuff through but if I have no use for it, it just weighs you down or takes up storage space (depending on mode). 

Value needs to be nothing but the relative quality of items.  Higher quality items includes the quality as defined in the game (decoration and item quality) and the material (steel weapons are inherantly more valuable than copper weapons) and also items subjectively preferred by an individual.  The way that trade either between individuals or settlements would work is that the entity has needs and it seeks first any way to meet those needs and then afterwards it compares the various options to acquire the highest value/quality. 

So soldiers require weapons, first they (or their settlement) try to get any weapons it can and then it tries to acquire the best weapons they can (the highest value as it were).  When they already have clothes however they will not sell their weapons in order to buy your masterwork shirt just because it's value is such and such.  If they are naked however then they might as long as you still offer them an inferior value weapon. 

A microsystem to generate utilities isn't terribly complicated, though it'd likely be computationally intensive until optimized.  From individual utilities in the fort and distributions-of-utilities at other sites, you can calculate demand curves.

The hard part is creating the supply curves.  In a world with constrained labor, there is a cross-elasticity of supply that needs to be taken into account.  Anyone who's played the Civilization games has run into that why-can-I-only-build-one-thing-at-a-time issue.  Some DF goods also have fairly complicated supply chains, but fortunately there is a mathematical solution to that using input-output matrices.

There is a far simpler and better way of doing it than to have the game machine artificially adjust prices based upon dubious economist theories. One that actually addresses the basic problem with the trade system as it stands as well because the problem at the moment is that there is too much trade going on that actually makes no sense. 

We need to decouple trade from relative value in order to make things work better in the setting.  Relative utility is what we basically need to work on for the system to make sense with relative value only a secondary concern. 

[GavJ]

crafts and instruments are objectively worthless, that is all (I think). Everything else always has some utility. The issue is making it dynamic according to its changing utility, instead of a fixed constant. Which is done according to supply and demand.

Supply is based off of something like how many resources and how much labor a fort has to produce stuff with relation to the possible price (AI) or your own sales history (for you after the first trades).
Demand is based off of ultimately the current usefulness of things (to the buyer but also to anybody else, if they have reason to believe you're selling the stuff too cheaply and they can flip it), or when trading with you, your purchasing history after the first trades.

Right, so what? We need to delve into the specifics of how to code this stuff. I was just earlier responding that the quota system mentioned didn't seem like a great choice, that's all.

[tonnot98]

I just want my dwarves to wear the proper microcline and gold crafts that I make for them all.

[GoblinCookie]

crafts and instruments are objectively worthless, that is all (I think). Everything else always has some utility. The issue is making it dynamic according to its changing utility, instead of a fixed constant. Which is done according to supply and demand.

Essentially we both agree we need to make the item become progressively more worthless the more of the item that the entity in question has, provided that the entity cannot sell it on to a third party for something that is valuable.  The real question is how to do this so that it is naturally emergant rather than an imposed script.

Supply is based off of something like how many resources and how much labor a fort has to produce stuff with relation to the possible price (AI) or your own sales history (for you after the first trades).
Demand is based off of ultimately the current usefulness of things (to the buyer but also to anybody else, if they have reason to believe you're selling the stuff too cheaply and they can flip it), or when trading with you, your purchasing history after the first trades.

Right, so what? We need to delve into the specifics of how to code this stuff. I was just earlier responding that the quota system mentioned didn't seem like a great choice, that's all.

The good thing here is that the basic groundworks for the economic system already exist.  We already have a division of the population into various occupations, trade routes built into the game; centred around key sites (fortress for dwarves, dark fortress for goblins, town for humans and forest retreat+ for elves). 

The first thing we have to do is restrict the available occupations according to biome (fishermen say cannot exist without river or ocean) and according to entity (a list of occupations is in there but does not do anything).  Then we have each person demand a certain amount of stuff each, depending upon size and occupation essentially.  Bigger creatures need to eat more and occupations demand the neccesary resources and tools needed to carry out production. 

If someone cannot get enough production materials or tools the individual becomes a drunk (game code for unemployed) and the site will try to employ them in an occupation as if they were a new person.  An individual that does not get the food they need will turn into a herbalist, hunter or fisherman if they can and if still cannot get enough to eat will die. 

Each person that successfully gets the needed resources will produce a set amount of products over a given time period. Normally the total amount a settlement produces will exceed their demand for the items they are producing.  This produces the goods that appear on the adventure map as free items (they are unowned). 

All sites compare their available amount of surplus items according to the trade routes that are already in the game.  Each site firstly tries to get the largest amount of in-demand items as possible overall.  Then the site tries to get the highest quality items possible, quality represents a combination of the inherant advantages in utility both from item quality and material; plus decoration and subjective a modifier based upon proceedurely generated cultural factors. 

This produces 'owned items'.  A key element here is that items that are imported for site consumption are not imported exactly according to demand, the site tries to stockpile a certain amount of items above their customary demand.  Items that were imported for internal consumption function as site-owned items do at present (except obviously they cannot be sold anymore to the site itself), you can freely use them but not carry them off.  Items that are in short supply will not appear in the settlement except as private property of individuals. 

Items that are stockpiled for export to other settlements however are restricted items (a new concept).  Using these items is considered a crime and will annoy people and there should be a UI warning to inform people that try to do this.  I now turn to how the system works in Fortress Mode and Adventure mode. 

Fortress Mode
In Fortress mode you are slotted into the game as a Fortress for trade purposes but one without any subordinate settlements (hillocks or mountain halls say) assigned.  Those who are trading with you initially look at the resources within your settlement area and the projected production that you would have if you were an AI settlement.  The caravans come from particular settlements, not from the civilization as a whole. 

When the caravan arrives it remembers what items it did not sell and removes these from it's projection of your demands.  You can also specifically order a specific quantity of a given item, the settlement will then try to acquire those items.  The key thing here is that there is a quota on what the settlement itself is willing to buy, it will only buy up to it's demand+stockpile number, that is it's total demand+it's trading partners demands+a certain % on top of that. 

You can only trade directly with low-level settlements (and goblins) once you have build a caraven and given it the correct amount of supplies/personnel.  Once you have your own caravan you can load with a certain amount of goods and you inform it precisely what quantity of goods to trade for and the AI will handle the rest.

Adventure Mode
In Adventure Mode as already described the player can help himself to items that are surplus and not for export.  In order to leave with items that were imported for internal use the player must ask to use them.  This requires the player speak to a person in authority or anyone with the administrator or clerk profession and ask to use supplies. 

They will agree to this unless they are on bad terms with your adventurer but the amount they will allow you to use is limited to the amount that an individual biologically of the adventurers race but belonging to the site's entity would consume in a given period.  The amount that you have claimed from each site is logged, you cannot claim something as supplies, go over and sell them in another settlement and come back for more.  But obviously it resets over time and the settlements do not know what you have claimed from other settlements. 

Restricted items on the other hand must be bought. You the player are an economic entity that competes with the settlements trade partner(s) and has to outbid them.  If they are selling 10 plump helmets in return for 1 bar of iron, then in order to get 10 plump helmets you must offer them a better ratio but since all else being equal the AI seeks to maximise quality/value you can also outbid using items of a higher quality as well.

Finally there are exchanges directly between individuals.  Individuals possess the items that they were assigned by their settlement during the demand/supply calculations as private property along with some water as well.  But they also have their personal likes and dislikes; you should be able to ask them what these are.  Since individuals are not given surplus items by their sites, it is not normally possible except in desperate straits to acquire an item from an NPC except by providing them an equivilant item that they consider to be of greater quality than the one given to them. 

[GavJ]

Then we have each person demand a certain amount of stuff

Most of the things in your plan are good, except this recurring issue of treating demand as a single value. You CONSUME a certain amount of stuff per unit time, yes. But your demand is not a single value, it is a curve at any point in time.

The reason is that goods have value beyond immediate need. If I eat X calories a season, and I get the chance to go to the grocery store once per season, I'll probably on average buy X calories usually when I go.

However, if the prices are unusually low, then even if I have a normal amount of stocks, I will be quite willing to buy 2X or 3X calories during one trip, to take advantage of those prices. And if the prices are high, then I may avoid buying any calories at all. I.e., my stockpiles are based on supply and demand, just like price is / they are intimately related.

You also then have to factor in the possibility of deciding to spend more resources growing food at home instead of buying. If, for instance, prices are too high for many seasons in a row. This might require shifting energy away from armormaking or whatever else I was doing.





You're attempting to account for this with a hackish separate hard-code-y sort of system of stockpiling, but to be maximally efficient and minimally exploitable, it really needs to be built fundamentally into the system with proper demand curves in a gradual fashion that feeds smoothly into price motivation like everything else, not specifically coded stockpile amounts.

In other words, the amount you stockpile is based on supply and demand and current prices just like everything else, not a fixed number, and a fixed number will lead to exploits.

Apologies if that's what you meant already.

[GoblinCookie]

Most of the things in your plan are good, except this recurring issue of treating demand as a single value. You CONSUME a certain amount of stuff per unit time, yes. But your demand is not a single value, it is a curve at any point in time.

Demand is a single value in real-life and it should be in Dwarf Fortress.  Demands do develop or grow but this happens according to a heirachy as existing more basic demands are met.

The reason is that goods have value beyond immediate need. If I eat X calories a season, and I get the chance to go to the grocery store once per season, I'll probably on average buy X calories usually when I go.

You always buy as many calories as you need in order to sustain your customary level of food consumption.  If you cannot acquire as many calories as you need, you sacrifice other expenditures or go into debt.  People are actually quite prone to do this, people do not cut back on consumption of basic demands, they simply borrow or beg or steal in order to get their basic demands met. 

This is the reason why in real-life we suffer from both crime and consumer debt.  People simply do not cut back their demands based upon what they can actually buy. 

However, if the prices are unusually low, then even if I have a normal amount of stocks, I will be quite willing to buy 2X or 3X calories during one trip, to take advantage of those prices. And if the prices are high, then I may avoid buying any calories at all. I.e., my stockpiles are based on supply and demand, just like price is / they are intimately related.

You also then have to factor in the possibility of deciding to spend more resources growing food at home instead of buying. If, for instance, prices are too high for many seasons in a row. This might require shifting energy away from armormaking or whatever else I was doing.

That is simply not how practically any real people actually work.  If the prices of food are low then they will use the money that they would otherwise spend on food to go to the cinema instead.  If the prices of food are high, they will cease to go to the cinema in order to buy the same amount of food as you did before at the higher price.  Then they start to steal, beg and borrow in order to survive. 

People do stockpile and what you are describing is simply stockpiling. Stockpiling is generally based upon insecurity (you are afraid in this case that the prices will go up) and is already modelled in my system.  Previously in your example you were unable to stockpile because of price constraints, now you are able to stockpile as you want to. 

You're attempting to account for this with a hackish separate hard-code-y sort of system of stockpiling, but to be maximally efficient and minimally exploitable, it really needs to be built fundamentally into the system with proper demand curves in a gradual fashion that feeds smoothly into price motivation like everything else, not specifically coded stockpile amounts.

In other words, the amount you stockpile is based on supply and demand and current prices just like everything else, not a fixed number, and a fixed number will lead to exploits.

Apologies if that's what you meant already.

What I mean is this.  The entities take their basic demand and then they add a % on top of that which is what they intend to keep in reserve in case of eventualities. This is not hackish but a realistic reflection of what drives stockpiling behavior in real-life.

What governs stockpiling behavior is how fearful you are.  You stockpile more because you fear high prices, crop failure, the sudden arrival of lots of extra mouths to feed etc.  That includes the case you use above, you are buying a large quantity of food now because you are afraid that the prices in the future will go up.

But since my model does not attempt to fix or establish prices for anything talk of demand curves and price motivation is vain; those things do not formally exist as a mechanism at all.  They may emerge from the system as it were, but no attempt is made to actually model those things because at core those things have no function.  They are just smoke rising from the economic fire as it were. 

All entities in my system seek to obtain the maximum number of in-demand goods and are indifferent to their surpluses.  What that means is that they try and sell as many of their surplus good as possible for as many in-demand goods as they can get. Both sides are frustrated by the fact that they can only sell a limited amount of goods as the other entity also only demands a fixed quantity of goods.  What will happen is that both sides will unless prevented by something else end up producing everything that both entities need.

The core concept here is indifference to surplus. The actual basis of the whole actual social order in Dwarf Fortress, the individual dwarves are indifferent to their surplus time and the government is indifferent to their surplus goods and allows them dwarves to freely help themselves according to their needs. 

[GavJ]

[Buying things in bulk/larger stockpiles when cheap] is simply not how ... real people actually work. If the prices of food are low then they will use the money that they would otherwise spend on food to go to the cinema instead

Apparently you've never heard of Costco.

you are able to stockpile as you want to

And how much do you want to stockpile? That's my point - it's not some fixed number. If I, in my actual real life, could find wheat berries cheap enough, like for sale at $1 per 10 pounds or something, I would seriously buy 30 year's worth of what berries right on the spot (that's how long they keep for). If I lived in DF where food never rots, I would buy my entire expected lifetime's worth if at prices like that which I can easily afford.

If it's just cheap, but not THAT cheap, I might buy a year's worth of stockpile. Etc.

There is no % over my daily need or watever that I stockpile. I stockpile based purely on what I can afford and the prices only. Most people do this, and general microeconomics relies on a (almomst always correct) assumption that most people do this.

Yes, it is based partially on insecurity - not just of price but of whether the trade caravan will exist in the future, or whether a bank might crash (or in DF, a forgotten beast force you to wall off half your assets unexpectedly), etc.

We don't have to actually model insecurity and things like that though. Because economists have already figured out that all these sorts of factors reliably contribute to a predictable shape of curve overall that we can use to model prices much more simply.

For a computer game, a simple, reasonably reliable method like that is ideal.

indifferent to surplus

You're not doing a very good job of playing DF strategically if you're completely indifferent to any of your fort's assets, nor should NPCs run their forts that way. Unless maybe we are trying to intentionally hamstring them on an easy setting.

[c6r]

[Buying things in bulk/larger stockpiles when cheap] is simply not how ... real people actually work. If the prices of food are low then they will use the money that they would otherwise spend on food to go to the cinema instead

Apparently you've never heard of Costco.

Indeed... in addition, even if a consumer declines to purchase additional items, just by virtue of the fact that they go to cinema instead is indicative of the curve, or at least that's how I think it works with my very rudimentary understanding of microeconomics (If I'm wrong, I apologize... I'm a politics guy; not an economics guy).  Buying below the curve, which is what that would be, increases consumer surplus which, in turn, at least as far as this scenario goes, decreases opportunity cost.  The opportunity to attend the cinema is gained by spending less than what you anticipated and were willing to buy for.

[GavJ]

Well yes actually thats a good point.

Demand curves do not have to add up to the same total amount of money spent at every point along the curve, nor do they even normally do so.

For instance, at $5 I may be willing to buy a pound of ham (total expenditure $5). At $2 I may be willing to buy 4 pounds of ham (total $8). At $0.05 I may be willing to buy 20 pounds of ham ($1 total, don't think I can eat more than that before it spoils), and I may still now go use the extra few dollars in that last case to go to the (cheap) cinema or whatever. So you could actually have both things happening at once, even.

[Scruiser]

However, if the prices are unusually low, then even if I have a normal amount of stocks, I will be quite willing to buy 2X or 3X calories during one trip, to take advantage of those prices. And if the prices are high, then I may avoid buying any calories at all. I.e., my stockpiles are based on supply and demand, just like price is / they are intimately related.

You also then have to factor in the possibility of deciding to spend more resources growing food at home instead of buying. If, for instance, prices are too high for many seasons in a row. This might require shifting energy away from armormaking or whatever else I was doing.

That is simply not how practically any real people actually work.  If the prices of food are low then they will use the money that they would otherwise spend on food to go to the cinema instead.  If the prices of food are high, they will cease to go to the cinema in order to buy the same amount of food as you did before at the higher price.  Then they start to steal, beg and borrow in order to survive. 

People do stockpile and what you are describing is simply stockpiling. Stockpiling is generally based upon insecurity (you are afraid in this case that the prices will go up) and is already modelled in my system.  Previously in your example you were unable to stockpile because of price constraints, now you are able to stockpile as you want to. 

I am not going to complain too hard, because I like discussing economics, but we did try to lay some basic grounds rules with this thread to avoid derailing it to argue about the fundamentals of economics:

If anyone is wondering why we are discussing detailed terms... look up "more challenging trading", and "Random Dwarf Economy Thought and Ideas".  Basically, discussions have gotten derailed trying to both present basic economic concepts and prove there validity to individuals that completely refuse to acknowledge any of economics.  Even worse was the refusal or misinterpretation of basic economic terminology ("supply", "demand", "unlimited demand", "economic surplus", etc.) 

*snipped*

2. It will be assumed unless proven otherwise that computing power is sufficient to model the economic actions of every individual "dwarf" in "Dwarf Mode" and every trading partner in "Adventure Mode", but that some optimization or abstraction will be required for world generation, time advancement, or other large groups.

Agreed,
Given world gen can have populations in the thousands, while fortress mode has populations in the hundreds, this seems like a reasonable rule of thumb guess for talking about implementation methods.

3. Economic activity is assumed to be governed by classical economic principles and traditional profit-loss motivations, save such unique circumstances of irrationality or charity as also found in the human experience. That said, it is desirable that any finished system be sufficiently robust to allow exotic societies (ant-women. etc) to also be simulated while respecting their value systems.

Strongly agreed,
I think classical economics is definitely the place to start any discussion, and the model to compare our final system with.  That said, there are cases that it should be able to handle that will break classical economic discussions (hive minded creatures, for example, individually do not have "unlimited wants and needs" and thus scarcity would only apply on the hive level, and not the individual level)

Once again GoblinCookie... you are misinterpreting basic economic terms either through either intentional straw-maning or lack of knowledge.

Most of the things in your plan are good, except this recurring issue of treating demand as a single value. You CONSUME a certain amount of stuff per unit time, yes. But your demand is not a single value, it is a curve at any point in time.

Demand is a single value in real-life and it should be in Dwarf Fortress.  Demands do develop or grow but this happens according to a heirachy as existing more basic demands are met.

See its little things like this that make me realize you basically don't understand economics.  This wouldn't be problem, except for the fact that you keep trying to argue with ideas based heavily in economics and you don't understand the background well enough to even address the idea.  And then you try arguing against what you think is economics using your misunderstanding of it.  Your ideas otherwise are okay to good... but we get derailed arguing economic concepts instead of the ideas.  Hence the discussion framing done by the OP.

The good thing here is that the basic groundworks for the economic system already exist.  We already have a division of the population into various occupations, trade routes built into the game; centred around key sites (fortress for dwarves, dark fortress for goblins, town for humans and forest retreat+ for elves). 

The first thing we have to do is restrict the available occupations according to biome (fishermen say cannot exist without river or ocean) and according to entity (a list of occupations is in there but does not do anything).  Then we have each person demand a certain amount of stuff each, depending upon size and occupation essentially.  Bigger creatures need to eat more and occupations demand the neccesary resources and tools needed to carry out production. 

If someone cannot get enough production materials or tools the individual becomes a drunk (game code for unemployed) and the site will try to employ them in an occupation as if they were a new person.  An individual that does not get the food they need will turn into a herbalist, hunter or fisherman if they can and if still cannot get enough to eat will die. 

See these are good ideas.  They are logical and relatively straightforward to implement while both building off the existing framework and allowing for further development.  Calculating available occupations by resources is a good idea.  So is the automatic switch to occupations under the right conditions.
I think this ties in well with my idea I describe early in the thread for categorization of goods:
Critical short term, critical capital, security, non-critical capital, commodity, luxury
(Vocab:"Capital" refers to things used to produce goods, that aren't used up in creating the good, i.e. a weaponsmith needs and anvil to produce weapons, a beekeeper needs hives to produce honey, see earlier post for more examples)
Anyway, the sites could place hard and soft occupational caps based on the capital available... For example only so many weaponsmiths/armorsmiths/blacksmiths can work at a single forge, even taking turns and rotating off.  Thus for forges there is a hard cap of three or four per forge and a soft cap of one or two.

Anyway, see the early discussion in this thread for why hard quotas won't work right.

[GoblinCookie]

And how much do you want to stockpile? That's my point - it's not some fixed number. If I, in my actual real life, could find wheat berries cheap enough, like for sale at $1 per 10 pounds or something, I would seriously buy 30 year's worth of what berries right on the spot (that's how long they keep for). If I lived in DF where food never rots, I would buy my entire expected lifetime's worth if at prices like that which I can easily afford.

Whatever those berries cost they still cost something and that something could be spent on something else.  What you are doing in your example has nothing to do with price at all, you are just changing the time-frame, instead of going to shop daily to buy a small number of berries you splash out on a large number of berries in one go.  You could save up for 30 years to buy your expensive berries, or you could save up for a month to buy 1 month's worth of berries; it makes no difference at all. 

The crucial factor here is the other things that you could not afford if you bought the berries. The crucial factor preventing you from hoarding extra berries on top of your projected demand in the time-frame is what else you also demand in that time-frame; you will not buy immense quantities of a cheap item if you have something else to do with what you are selling UNLESS you are highly insecure.

In game terms, the time-frame the AI entity uses is fixed by the length of time the caravan takes between leaving your settlement and returning to it. The means that the time-frame choice that your example uses does not exist here, the entity does not bring 30-years of berries with it so you simply cannot buy that much regardless of the 'price'.

You're not doing a very good job of playing DF strategically if you're completely indifferent to any of your fort's assets, nor should NPCs run their forts that way. Unless maybe we are trying to intentionally hamstring them on an easy setting.

The concept means that the AI trader does not try and keep any of it's surplus goods in stock but neither does it try to get rid of them for no gain.

The crucial thing is that the other entity is also indifferent to surplus, meaning it will not buy more than it's demand for those goods, so the first entity can still only export a finite quantity of it's surplus goods regardless of it's indifference to them.
 

See its little things like this that make me realize you basically don't understand economics.  This wouldn't be problem, except for the fact that you keep trying to argue with ideas based heavily in economics and you don't understand the background well enough to even address the idea.  And then you try arguing against what you think is economics using your misunderstanding of it.  Your ideas otherwise are okay to good... but we get derailed arguing economic concepts instead of the ideas.  Hence the discussion framing done by the OP.

The Atheist must have a Doctorate in Theology now. 

Economics as I have said before is a not a neutral science but a form of stealth-politics; the actual purpose of GavJ's ideas is to demonstrate that prices have a vital economic function so as to advocate that government should not interfere in the setting of prices by market actors. 

But I understand what GavJ is saying well enough to know that the fundamentals his economic theories are based upon are erroneous. If implemented in the game they will utterly ruin it practically beyond all repair; it will once again become the game with the irrevocably broken economic system. That is why I consider the stakes kind of high here.

See these are good ideas.  They are logical and relatively straightforward to implement while both building off the existing framework and allowing for further development.  Calculating available occupations by resources is a good idea.  So is the automatic switch to occupations under the right conditions.
I think this ties in well with my idea I describe early in the thread for categorization of goods:
Critical short term, critical capital, security, non-critical capital, commodity, luxury
(Vocab:"Capital" refers to things used to produce goods, that aren't used up in creating the good, i.e. a weaponsmith needs and anvil to produce weapons, a beekeeper needs hives to produce honey, see earlier post for more examples)
Anyway, the sites could place hard and soft occupational caps based on the capital available... For example only so many weaponsmiths/armorsmiths/blacksmiths can work at a single forge, even taking turns and rotating off.  Thus for forges there is a hard cap of three or four per forge and a soft cap of one or two.

Anyway, see the early discussion in this thread for why hard quotas won't work right.

At the moment capital is just bundled in with consumer demand. Capital goods (including workshops for dwarves) are not treated any differently from the shirts they wear on their back; they are goods that the demand but which are non-consumable, meaning they end up as private property belonging to a dwarf but revert to ownership by the fort if that dwarf changes profession. 

Demand quotas are exactly what this system is completely and totally based upon, it is what makes it tick. You cannot have my system working properly without it's fundamental basis.

But despite the fact that people are happy to work with my model they continue to argue against the economic foundations of it; namely indifference to surplus and demand quotas.  If we ignore those fundamental axioms and go with GavJ then we will ruin a system that would otherwise work well and be relatively easy to implement.

[Scruiser]

Economics as I have said before is a not a neutral science but a form of stealth-politics; the actual purpose of GavJ's ideas is to demonstrate that prices have a vital economic function so as to advocate that government should not interfere in the setting of prices by market actors. 

You don't understand economics.  The fact that you interpret all of economics as stealth-politics is more proof of your lack of any knowledge or understanding of it (if you knew economics better, you would know which parts are fundamentally true, which parts are debatable, and which parts are politically biased).  Anyway, the OP and the few posts after that explicitly asks for economics not to be treated as an issue in this thread to avoid cluttering the thread. 

I am going to ignore your discussion of quotas because we already explained why such a system won't work and actually address your unaddressed point:

At the moment capital is just bundled in with consumer demand. Capital goods (including workshops for dwarves) are not treated any differently from the shirts they wear on their back; they are goods that the demand but which are non-consumable, meaning they end up as private property belonging to a dwarf but revert to ownership by the fort if that dwarf changes profession. 

   "Capital" as a category provides a useful criteria for the site or individual AI to choose whether or not to buy the item.  The AI can check if all individual site members have their time appropriately filled with occupations, if not, then it will prioritize buying or producing capital to expand the number of occupations available.  The AI can check if it has all its critical areas of production up to some threshold, if not, it buys/produces the appropriate critical capital, if it does it buys non-critical capital.  This way, forges, picks and axes would be prioritized over beehives, screw presses, and other non-critical stuff, while still ensuring that production is expanded overall.  If all occupations are filled, then all things being equal, the AI will know that it doesn't need to buy any capital.
    So yeah, hypothetically you could set up your system to not treat capital as different, but practically speaking, it provides a useful category to the AI to buy/produce it under some conditions and not others.  It ties in well with your idea about tracking occupations also.