Settlers of Catan (now apparently just “Catan”) was, at least in my perception, the first king of tabletop gaming. The award winning game is ubiquitous at conventions and has sold over 30 million copies. If you want more praise, I can’t say it better then Wil Wheaton himself. This is a fantastic game. It’s also, in lots of ways, a game about economics and not just “game theory.” The trading and resource management mirror real-world economic principles, and knowing something about them will make you a better player. So here’s a geeky economic look at Catan, and some general tips too. It’s the Geekonomics of Catan… or Catanomics. You pick.

Joining me on this econ-venture (sorry, I’ll stop) is Glen Whitman. Glen is, you guessed it, an economics professor. He’s also a genre TV writer (FRINGE and more) and a big old game playing geek. Most importantly, he’s a great Catan player who thinks about the game in various shades of economic theory, and that’s just what the doctor ordered. Glen wanted me to mention here that he has in fact lost plenty of games of Catan. I will also say that if you have to think back and count the times you’ve lost a game, well, you might just be pretty good at it. Catanomics GO!

PRICE THEORY

As acquiring and spending trade goods is the only way to win at Catan, the value of those goods is something you should always been keenly aware of. “Price Theory” is the branch of economics that concerns itself with how supply and demand interact to determine the price or value of goods.

What does that mean? In general, the price of a good is a function of its scarcity, that is, the difference between how much people want something and how much of it is available. The bigger the difference, the higher the price. You can determine the starting scarcity of the resources by looking at some key factors. How many hexes produce a given resource? What are the numbers on those hexes and how frequently will they be coming up on average? How many settlements are on those hexes or are likely to be built on them?

There are always four forest hexes (which produce wood) and if sixes or eights are on two of them, we can assume we will see a lot of wood. We’ll see even more wood if those tiles are placed such that they represent otherwise attractive settlement options. The ore-producing hexes are more scarce, just three hexes, and if they aren’t lucky enough to be on high-frequency numbers or if they happen to be in outlying coastal areas (thus being less attractive for settlements), we’ll see ore much less frequently. Thus, ore will command a much higher “price” than wood. Since Catan has no money, these prices are in terms of other resources.

This probably is not a daunting revelation to most players: some resources are more scarce than others. Still, if you move onto the board with this in mind, you have a chance to make sure you have a flow of these resources and your opponents can’t lock you out.

These prices will vary throughout the game, as random chance results in temporary gluts and shortages of resources. New development will also alter prices by generating more access to one resource or another. If more settlements are built on hills (which produce bricks), then the price of bricks will tend to fall as fewer people need the resource while more of it gets produced. This is similar to how oil prices fell worldwide after a long period of extremely high prices in the early 2000s. New sources of oil (especially fracking) increased the supply and thus drove down the price per barrel. So what I’m saying is that building a city on a rare resource in Catan is essentially fracking.

Trade can also play with these numbers. Generally, the more people who have a resource you’re looking for, the lower will be the price. If you’re looking for wheat and a lot of people have it, start a bidding war. Start one trade and then ask the others if they can do better. Build up the options and reap the benefits.

Speaking of building up resource options, you might even attempt to lock off a resource and create your own monopoly. If you can place settlements on opposite sides of a hex, you can essentially exclude other players from using it (all settlements have to be at least two spots away from any other settlement). If you can lock up a key hex in a low production resource, you can drive the prices up. However, the nature of the game makes a full monopoly impossible, because even if you managed to control every tile that produced grain, your opponents could just trade with the outside world. This brings us to our next piece of economic terminology…

THREAT POINT

The “threat point” is an economic term used in bargaining theory. The threat point is essentially your best outside option if a trade doesn’t occur. It’s sometimes defined as the payoff you can guarantee yourself by not participating in a bargain. In Catan, we have it easy because everyone’s base threat point is 4 cards of a given resource. As anyone can trade 4 cards of a single resource with the outside world to get 1 of a resource they want, they are not likely to agree to any trade that requires them to give up more than 4 resources. So if I’m looking for grain and you say you’ll give me one grain for four sheep, I’m almost certainly going to say no. I can always make the same trade with the outside world, and thus all I stand to gain from this trade is perhaps some good will from you. In most cases the most you can ask of anyone in the game is 3 resources, because 4 is their threat point. The value of various goods will change all this math, but it’s a good place to start.

Here’s an example: let’s say that in my hand I have 4 sheep and 2 ore that I’m looking to trade. I want 1 more grain to go with the cards I’ve earmarked to make a new settlement. Ore is more rare than sheep so I still might prefer to let go of the sheep before the ore. One opponent, let’s call him Adam, offers me the 1 grain I need for 2 ore. If I didn’t have the option of trade with the outside world I might just take that deal. I point out to Adam that I could trade off these sheep I’ve been trying to get rid of for that same grain and still have the ore that has a higher value. Keen to get at least some ore out of the deal, Adam drops his price and we make a 1 for 1 trade. I was able to use the threat point of trade with the outside world to improve the terms of my trade with another player.

The trade ports scattered around the edges of the map contribute to this effect. If I can capture a 3 for 1 trading post then I can improve my threat point overall. If I can get a 2 for 1 trading post, even though it requires that I trade a specific resource, I can do even better. In the above example, if I had a 2:1 sheep port (sometimes called a “sheep-o-matic”), I could have easily forced Adam to sweeten the deal of our trade because my threat point was so good. If I walked away from our deal I could look forward to two grain for my four sheep and Adam would get nothing. Still keen for ore, Adam might add an additional grain to his side of the deal, or maybe some other resource card.

ON TRADE (Zero-sum Games and Not-So-Zero-sum Games)

Economists (and game theorists) divide situations into zero-sum games and positive-sum games. (There are also negative-sum games, but they’re not relevant here). In a zero-sum game, the total benefits are equal to the total losses, meaning that one person’s gain is always another person’s loss. So if winning a hand of poker lets me take all the money in the pot, that’s a zero-sum game. I won the money and everyone else lost it.

Most trades in the real world are positive-sum games. This means everyone gets something out of it. When you buy a slice of pizza from the corner cafe, you want the pizza more than the $4.00 you paid, and the cafe owner wants the $4.00 more than the pizza, so you both win. This is true in Catan as well. If you and I voluntarily trade resources, we both must prefer the resources we gain to the resources we give away. We both expect to gain from the transaction.

So with that in mind, and taking into account the effects of price and threat points above, it’s usually good to trade when you have a chance. As long as you feel like you’re getting the best deal you can, you should probably go for it, even though it will also help the other guy. Both of you will improve your position relative to the other players. But there are two main exceptions, and both relate to the fact that while individual trades are positive-sum for the two players involved, the game as a whole is zero-sum: only one person can win. That means you have to be wary of trades that might give your trading partner enough of an advantage to spell the difference between winning and losing.

The first exception is obvious. If it’s late in the game, and making a particular trade would mean your opponent can immediately win the game, you shouldn’t do it. Glen cautions that there are times you should make late-game trades even if you fear they might allow your trading partner to win. If a trade gives you a shot at winning the game that you otherwise wouldn’t have, you might risk a trade unless you are 100% sure your trading partner will win on this turn. Why? Because there is no prize for second. As Glen says, “All games in which someone else is the winner are the same to me.” (After reading this, Glen clarified: “Unless the winner is my friend Peter, who will brag and rub it in for days. In that case, I’d rather someone else win.”)

The second exception can happen earlier in the game, when it’s not obvious who’s in the lead. Even so, you don’t want to trade with someone if that trade will let them build on a space you also intend to build. That 2-to-1 sheep port might be the key to your winning strategy! But this exception also has an exception. If another player will probably trade them what they need to build on that spot, then you’re hosed anyway, so you might as well make the trade yourself so at least you get something out of the situation.

This is just the tip of the Catanomics iceberg. This is why so many economics classes use the game as a teaching tool. Someone could easily write a whole book on this stuff. Perhaps it should be Glen Whitman, who already co-edited a book on economics as it applies to vampires and zombies. Check out Economics of the Undead: Zombies, Vampires, and the Dismal Science on Amazon.

What games do you want to see a get the geekonomic treatment? Do you like to know the science and math behind your games or do you just like to win? Why do you think sheep is such an underused resource? Let us know in the comments. Commentonomics? (ok… I promised to stop)

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