Balance of Trade in Clash of Clans

clash-of-clans-you-and-this-armyA few months ago my son introduced me to a game called Clash of Clans. The game is hugely popular and extremely addicting. You’d be surprised at how many clashaholics are out there, both kids and adults alike. I had an experience yesterday that has me thinking about economic theory and balance of trade.

[Note to reader: If you do not play COC and do not care about economic theories, please stop reading now.]

Let’s look at how trading troops might work in an example clan of five:

Imports(Clan Castle Requests) Exports(Clan Castle Donations) Balance

Player 1

20 Archers 5 Archers x 4 clanmates 0

Player 2

20 5 x 4 0
Player 3 20 5 x 4

0

Player 4 20 5 x 4

0

Player 5 20 5 x 4

0

In this simple example, everyone’s clan castles have housing space for 20, and everyone defaults to archers. So, a player will receive 20 archers in his or her clan castle, and give four clanmates 5 archers each, so that trade is perfectly balanced for all with a ratio of 1:1.

(Yes, this example is simplified because various troops take up different amounts of housing space, clan castle sizes vary, and frequency of transactions vary. You can object with “assume I have a can-opener” wisecracks all you want, but these examples accurately show the principles involved.)

Now, let’s assume a greedy player is concerned he is giving more than he was getting. In other words, he wants to make sure trade is “fair” so that production and consumption are balanced. As a result, he lobbies for trade agreement in which the following rules are instituted:

  • Level  5 archers are required minimum troop level to join the clan.
  • Level 5 or better troops only to be donated (exported).
  • 1:3 donations to received troops ratio required.

Let’s look at another example considering these new rules. Assume players 1 and 2 have level five wizards and that players 3-5 do not.

Imports Exports Balance
Player 1 20 5 wizards x 4 players 60
Player 2 20 5 archers x 1 player (15)
Player 3 20 5 archers x 1 player (15)
Player 4 20 5 x 1 (15)
Player 5 20 5 x 1 (15)

Wizard6Wizards are higher quality troops, and therefore take up four times as much housing space per unit as archers (1 wizard = 4 archers). Player 1 donated five wizards to each of his teammates. This filled players 2-5’s  clan castles, leaving only Player 1’s available to receive donations. Consequently Player 1 winds up with an export surplus, and players 2-5 have a trade deficit.

Trade deficit sounds like a bad word. Is it bad that players 2-5 have deficits? Not necessarily. Players 2-5 were able to consume higher quality troops than they would have otherwise gotten. So it was a good deal for them.

Was it good deal for Player 1? He gave out 80 worth of wizards and only received 20 of archers in return. But he donated the wizards by choice, so it must have been good for him somehow. Perhaps he left his barracks cooking wizards over night, so that the next morning he had a surplus of them ready to export. Or maybe s/he just really likes wizards and always produces lots of them. Either way, it would not help him to ditch the surplus wizards, so he donated them to his clanmates as this was better for all involved.

But there’s a catch! Remember, some short sighted individual was worried about giving more than he was getting. So he interfered with everyone and made the trade rules “fair”. The minimum ratio of donations to received troops (exports to imports) is 1:3. Players 2-5 now have a ratio of 1:4, and are at risk of expulsion from the clan for rules violation. As a result, the next round of trading looks like this:

Imports Exports Balance(Cumulative)
Player 1 20 1 wizard x Player 2 = 4 44
Player 2 19 5 wizards x 4 players 44
Player 3 20 5 archers x 1 player (30)
Player 4 20 5 x 1 (30)
Player 5 20 5 x 1 (30)

Like Player 1 previously, Player 2 is capable of producing level 5 wizards. For this round of trading he does so in order to improve his trade ratio. As a result:

  • Player 1, who prefers to specialize in wizards, is unable to export his surplus now that Player 2 has entered the market.
  • Player 2 donates wizards, bringing his ratio back above 1:3. However, his clan castle will not be filled to capacity of 20.
  • Players 3-5 are able to donate 5 archers a piece. As they do not have level 5 wizards, they are unable to change production like Player 2 did. They are doomed.
Even my geekdom has limits.

Even my geekdom has limits.

What is the end result of the clan imposed trade restrictions? Players 3-5 will be booted from the clan. Player 1 had to waste surplus wizards since he was no longer able to export them. And Player 2’s clan castle could not be filled to capacity. In the long run thwarted free trade wasted resources, and caused three members who would have grown into productive clan members to be expelled.

Yesterday, I was one of the players booted from a clan because of this very scenario. Assuming clan castle capacity of 20, members with lvl 5 archers can donate only 5 for each round of trade. Therefore, equilibrium ratio for these members is naturally 1:4. (In real life, it is more like 1:5 because CC capacity is 25.) Artifically tweaking trade to fit a ratio to 1:3 involves unnecessarily lowering production capacity.

Conclusion: Smart clans, like this one, monitor whether members are actively trading or not. They understand trade is mutually beneficial and encourage it in every form. Stupid clans, like this one, limit trade. As a result they are not as efficient as they could be, and limit the production capacity of the entire clan.

Additionally, when you take into account the time and energy bad clans spend squabbling back and forth about misunderstood metrics instead of actually playing the game, the stupidity factor of limiting free trade is multiplied. Unfortunately, real life trade agreements are frequently equally as stupid.

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2 comments

  1. […] your clan castle frequently! You have one, use it! Clans with 3:1 rules are stupid. If you are active and donate, you will be fine. If you are game the system, you will be […]

  2. Thank you for your referral to our clans, I’ve only just noticed it . We have used this system since inception January 2013 and grown to 7 clans of active people with the one simple rule so I guess it works very well

    Were you a amember of English clans?

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