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You've probably played this game before — the hero goes out into the wilderness, slaughters hordes of beasts and bandits, then returns to the town and promptly sells all his loot to the nearest shopkeeper. This is fun for a game, but it's far from realistic. A shopkeeper isn't going to want to buy 50 leather helmets, though the local militia might be interested if they're seriously under-equipped. So what would a realistic economy look like?


In the scenario that I'm considering, there is a town (around 5K people, perhaps?) with medieval-level technology. It is well known that magic exists, but there are not any people capable of harnessing it. Monsters exist, from the not-so-dangerous to the ridiculously lethal.

Magic was introduced into the world a century or two ago by unknown means. A lot of people were killed by the monsters, but eventually a safe area was found. For some reason this one particular area repels monsters, with the more dangerous a monster is the more it is repelled. That's where the town is built.

The town gets by, but it's no cakewalk. The town was built as compact as possible, so monster attacks don't happen in town. Most of the land around the town is farmland, but the safe area doesn't completely cover them — farmers have to watch out for low-level monster attacks. There are watchtowers (elevated wooden platforms with a simple roof and a ladder) at strategic points in the fields that allow the town guard to help watch and assist in fighting off any monster attacks. While skilled, the members of the town guard are still only normal humans. The town can't expand as there's no way the guard could continually fend off the stronger monsters that live in the surrounding area.

There is no contact with other towns. Traveling is far too dangerous to make it to any other towns without becoming monster chow.

Enter the hero.

A man is spotted stumbling out of the wilderness and taken by the guard into town. He doesn't remember how he got there, but they're not going to throw him to the monsters without cause.

He starts out weak and unskilled, but starts getting stronger and stronger. He also develops the ability to use magic. It doesn't take long before it's clear he's "the chosen one"™ or something — he's actually capable of surviving long enough in the wilderness to do some legitimate exploration.

So now the hero can go out exploring and bring home nice shiny loot. However, I doubt he'd be able to grab whatever random objects he finds and sell them to any shopkeeper he wants — supply and demand is probably still a real thing. I'm planning that he will be able to find things that are actually useful, such as materials for producing better equipment (for himself and the townsfolk) and one-time-use spellbooks that will allow other people to use magic (though not on the same level as the hero).

Starting out with a medieval economy where almost everyone is just getting by (so disposable income is pretty much nonexistent) how would the town's economy evolve to handle a guy who is eager to dump his entire load of (moderately useful) loot?

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    $\begingroup$ Does he have a magical way of transporting stuff? Otherwise, he wouldn't be able to carry much loot at all. $\endgroup$ – Davidmh Nov 4 '15 at 9:04
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    $\begingroup$ Any stranger walking into a small town even once and attempting to sell almost anything not clearly mundane will be noticed by both law enforcement and criminal elements pretty quickly - and sometimes those two elements might be the same people! A gold rush mining town might be something to research on this question. One person discovers something valuable lying out there, and others try to get some for themselves or find a way to take it from those who get it first-hand. Towns spring up and grow, along with crime and corruption. $\endgroup$ – Todd Wilcox Nov 4 '15 at 15:13
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    $\begingroup$ Not sure how related this is, but an incredibly large and complex economy exists in Runescape, in which you can always sell your spare armour to the store, but always at a way cut-down price. Most of the time you want to trade it with someone who actually wants it: services.runescape.com/m=itemdb_rs The big difference is that this is a global system, more like a giant city than a tiny village with limited supply/demand. $\endgroup$ – Nacht - Reinstate Monica Nov 4 '15 at 22:43
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    $\begingroup$ Economic impact of Superman: smbc-comics.com/?id=2305 $\endgroup$ – Nick T Nov 5 '15 at 0:22
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    $\begingroup$ Where all those monsters get all those things? They loot ruins, kill town watch or produce them themselves? $\endgroup$ – Anixx Nov 5 '15 at 2:03

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Basically, to have a more realistic economy, you need two things most games don't; realistic human carrying capacity, and realistic supply/demand models governing prices.

In D&D, someone with the maximum base Strength stat of 18 could carry up to 100 pounds without it affecting his mobility and running speed. In reality, even the most physically fit humans are more like a 13-14 on the D&D scale; able to carry up to about 50-60 extra pounds strapped to their body or back before real mobility is a problem, and a real upper limit of about their own body weight (150-180 lbs), and only for short trips.

So, in your world, you need that more realistic carry limit, to avoid the hero walking into town carrying 5 full suits of armor on their back in a single trip. More likely, he might be able to carry one extra suit of armor he got as a battle trophy off his dead opponent, if that's all he was carrying beyond his own weapon/armor, food, a few potions etc.

Secondly, the fifth time your hero comes back into the armorer with a spare suit of full plate taken off of some undead knight, the armorer's not going to accept it. He has nobody to buy the other four suits the hero dragged in. Practically every computer fantasy game ignores this in the interest of simplicity and fairness in pricing. In a "real" medieval magical fantasy world, if an entire adventuring party walked into the armorer's with a spare suit of full plate each to sell, either the first guy to walk in would get the fair price and everyone else would be turned away, or everyone would get shafted for a fifth or less of the armor's true value.

Not fun. But, that's supply and demand. The armorer might make better use of a few helmets and mail or breastplates from each of the characters, that he could mend, shine up and sell to some of the more well-off townsfolk, to use if they're called to arms by the local noble. Demand for a 75-pound suit of full plate, on the other hand, is limited to the two or three knights that have sworn service to the noble. Best-case, it's good raw material, but that's all the value you'll get for it; it's too rare to be worth anything (kind of like trying to fence the Hope Diamond).

This will also apply to buying supplies with gold. If a hero uses a single town as his base of operations long enough, soon the town will be awash in gold and silver but starving to death because the hero's buying all the bread and ale. The armorer will also be out of arrows and crossbow bolts (realistically those are only semi-disposable items; the average wandering hero would be ripping his arrows back out of their targets where he could instead of the more fire-and-forget nature of most games). There won't really be anyone the town could trust to take a wagonload of gold to the next town to buy food, and that would be a dream target for bandits anyway, so the town might pay the hero some of his own gold back just to escort the wagonload and come back with things the town can actually use.

Over time, as implemented in a game, these economic shifts will encourage the hero to do two things they would normally do in a realistic setting: be less of a pack-rat, picking up only what's truly valuable either because he can use it himself or because it's useful to the town, and leaving the run-of-the-mill drops alone; and roaming more, going from town to town doing what needs doing, and spreading out the wealth he finds in his adventures across several towns without draining their resources.

EDIT: I still think the above answer holds in general, however I wanted to add that I finally joined the 21st Century of video games this Christmas with a PS4, and I've found The Elder Scrolls V: Skyrim to address many of the above points as they relate to the player's experience. The game's role-playing engine has a limited carrying capacity as you might expect, which your equipped weapons/armor and other "field gear" like potions count towards, thus requiring a balance between what you carry out into the field and what you expect to bring back. D&D does this, but many older video-game RPGs like much of the Final Fantasy universe do not, imposing only fairly artificial limitations typically based on hardware limits.

More interestingly, the engine also has a limitation on merchant goods and gold supplies as well as their selection; the merchant's objective is, of course, to sell things, not to buy, so they don't keep a practically limitless "till" for the player to drain by offloading goods. They also tend to specialize in the type of goods they deal in (can't sell armor to a food cart vendor), and they can't make things instantly; at the very least they need the raw materials and some time and effort to craft the item you want, which they can't do while they're dealing with you over the counter.

This requires the player to "spread" both purchases and sales across an entire town's merchant class. It also often requires going to other towns to find merchants with more coin (or stocks of needed items). The alternative is waiting several in-game days for a merchant's stocks and gold to replenish, a simplification of the basic fact that the economy of the world does not revolve around only you.

Of course, the more you interact with various characters including buying and selling from merchants, the higher your "Speech" skill attribute grows, and coupled with level-based "perks" that you can spend on the Speech skill tree, it's possible to increase merchant wallets and sell almost anything to almost anyone. But, because these things theoretically require you to play the game to build them up, you tend to get these benefits late in the story, and so the skills are largely a way for the designers to impose meaningful limits on trade without them becoming overly burdensome late in the game, when the player's trying to sell equipment and weapons worth thousands of gold pieces while merchants only keep some hundreds around to trade.

You can, theoretically, "break" Skyrim as a game by grinding very early in the story (and exploiting a few bugs in the save engine) to attain an extremely high level and well-developed skills trees before even completing the first few quests, making the challenge of the early game that's tailored to limited player ability practically nonexistent.

As a minor additional point, in Skyrim you can in fact rip some of your spent arrows back out of your victims (or nearby trees or off the ground where they landed), on top of looting your enemies' quivers. However, this quickly makes ammunition a non-issue; I have thousands of arrows of various serviceable qualities, and while I conserve the best ones I have, I'm in absolutely zero danger of not having any arrows at all (I'd just be forced to use the crappy ones that don't fly as straight).

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    $\begingroup$ 2 branches of wood, lashed together, dragged behind you loaded with loot - you can return with a lot more stuff than you can carry. Incidentally there are reports soldiers in Afghanistan are going into battle with 100lbs on their backs (and also that this is a hindrance), but there's no reason you can't drop your pack to fight and pick it up again later. And besides, doesn't this town have one spare mule? $\endgroup$ – gbjbaanb Nov 4 '15 at 8:56
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    $\begingroup$ He could also just give stuff to the townsfolk for free -- make it part of a quest or something, like equipping the guards with those cool suits of armor you found will allow the town to expand a bit, since it can more easily handle those low-level monsters. $\endgroup$ – Pyritie Nov 4 '15 at 10:19
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    $\begingroup$ Not to mention that the external environment would rather rapidly experience a mass extinction of wild bandits to draw from as a resource. @Pyritie On your note, an interesting direction to go with that would be hiring people to adventure with you instead of just accumulating masses of gold. Some sort of give-for-favor economics would be pretty badass to explore as a game system idea. (Now if I could just find someone to fund an experiment leveraging that idea...) $\endgroup$ – zxq9 Nov 4 '15 at 10:27
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    $\begingroup$ @gbjbaanb - The amounts you give are in line with what I'm saying; 50-60 lbs extra is manageable while able to fight (basically your weapon, armor and anything else you'd need to be effective), 100-120 extra pounds (including your field gear for basic survival and anything you pick up to sell) will slow you down but you can still walk, and beyond your own weight (150-180 lbs) your legs probably won't get you ten miles to the next town. An improvised sledge would mean you can transport more but anything you're dragging behind will be a hindrance regardless of weight. $\endgroup$ – KeithS Nov 4 '15 at 23:12
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    $\begingroup$ This answer touches on escorting a wagon to another town. Wouldn't that be the hero's most valuable asset? The town cannot accomplish this; he has a monopoly on getting people or items to other places (assuming he can find them first and convince the town there's value in going). $\endgroup$ – jpmc26 Nov 5 '15 at 1:06
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Honestly, supply and demand doesn't make much sense here. The townsfolk should recognize quickly that the hero is their hope for getting out of this monster problem; keeping him equipped should be a community project. Once the hero has proven himself, the village should give him the best weapons and armor they have (which are probably pretty terrible, but still, they're trying).

Then, when the hero hauls some new material back to town, he has to go talk to the local blacksmith and say: "what can you make me with this?" If the blacksmith charges a fee at all, it's probably "I get to keep some of these raw materials you brought me for myself".

People are spending time and labor on equipping the hero, and he does have to compensate them for that, but he's probably "paying" for it in food. Whenever he kills something in the forest, he hauls the corpse back as fresh meat. The town saves a bunch of labor from having a steady supply of meat, and that's enough to cover whatever labor the hero needs.

I imagine eventually the hero has his own collection of workers: the hero's armorsmith, the hero's weaponsmith, the hero's leatherworker, the hero's sage. When he hauls something back to town, he holds a meeting and says: "here's what I killed, here's what I found, what can you make me?" Anything they can't use to make stuff for him gets given away, because the villagers are dirt poor and couldn't pay for new arms and armor. So essentially the hero is creating his own economy, by hiring people to train themselves to make things he needs.

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First of all, let's realize several things:

  1. RPGs are simplified because fighting/looting is basically the pc's main source of income. GPs from missions/quests may be substantial, yes, but you'll find yourselves unable to buy stuff fast if you don't regularly loot fallen opponents.

  2. In order to facilitate that, every shopkeeper in an RPG world will have a seemingly inexhaustible source of currency. No matter how many you bring back, he'll buy at market prices. The market prices will never vary too.

How will these things work in a 'realistic' fantasy world? The simple answer is: It doesn't.

Unless the character is magically strong, or has a 'Bag of Holding' containing a 'pocket universe', then weight is a real issue for the adventurer, as it is an issue for the modern Soldier or even hiker.

Consider: For a person to be able to spend a significant amount of time in the wild hunting monsters, he will need to carry everything he needs to survive on himself or his pack animal (which is NOT his riding animal). He needs to carry some amount of food (which he can supplement from local game), some water (depends on the climate of his Area of Operation), spare clothing, tent/tarp, his bedroll, medical supplies, hunting supplies, tools.

He also needs to carry his weapon/weapons, weapons maintenance/PMCS kits, spares, specialized weapons, etc. Then he has to carry his armor, armor maintenance/PMCS kits, spare parts, etc.

All this add weight, that has to be carried somehow. And, if you want to be realistic about it, our hero would not be traipsing up and down the forest in his plate armor all day. Have you ever worn armor? Trust me, its nasty in there. Plate armor is hot, heavy, uncomfortable to wear for extended periods. Its hard to put on, its hard to take off. So our hero will probably be walking around in a padded gambeson with some mail; carrying his expensive, tailor made plates on his mule. He'll put the plate on just BEFORE he fights that Ork boss.

As far as loot goes, this is also the case. Say our hero defeats a particularly well armored Dread Knight. Good loot right? Weapons? Armor? Gold? Well, not really. Weapons, maybe. A good sword/shield/lance will fetch a fair price, can be used by just about everyone even if they're not tailor made for the individual, and are relatively easy to bundle up and carry (well, small bucklers maybe. Big shields will be problematic). But that fantastic set of plate armor the Knight was wearing? I don't think so.

For one, its heavy. It takes space. Armor (with the exception of mail and the lorica segmentata) are generally cumbersome to store, being hollow cylinders of metal. Even if you manage to strip the set off the dead knight, no one else will be able to wear them. Why? Because the best armor are custom made to the measurements of its wearer. And ill fitting armor will be more a liability than protection to its wearer.

Even if you manage to take it back to the village, who will want to buy it? Maybe the local noble as a trophy. But that's about it. Its hideously expensive, so the blacksmith probably wouldn't be able to afford it. Nor will the Knights, since they already have their own custom made armor and are already spending a lot of money maintaining it. So maybe you'll just take the set as a trophy to decorate your home. Maybe you'll just take the helmet. You sure as hell isn't going to sell it.

With that setting in mind, the best occupation for heroes in your world would be as mercenaries, hired by these frontier towns to clear out monsters every so often paid in gold and loot (what loot they can cart off to sell in bigger towns/market towns). They will definitely not be selling the loot in the hiring town though.

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I would suggest that the best way to handle it is to make the hero a "kept man." The first trade good the hero returns with that no one can afford to buy is gifted to the lord/king, the hero gets knighted (and eventually is named Hero of the realm) and no longer participates in the regular economy. Free meals and lodging anywhere such is available, the king may commission special equipment (everything from suits of armor to the finest horses to squires) for the hero.

The problem would be that material rewards available from society are rapidly outclassed by trade goods obtainable through adventuring. In order to keep the hero interested in adventuring with the materialistic carrot, the items found must be of immediate or eventual use to the hero directly. Maybe a spellbook details a process for enchanting a suit or armor, or the creation of a magic sword. Maybe there's a fountain of youth at the bottom of the deadliest dungeon. Maybe a slain dragon leaves behind a single egg to be raised as the hero's pet and mount.

Of course, there might be other motivations for adventuring. (Intrinsic spirit of adventure, existential threats to the realm, or even just hoping that "the next leap will be the leap home.") ;)

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  • $\begingroup$ How would this work if there isn't any nobility in the town? The city might be run by a council of older men and women. $\endgroup$ – Rob Watts Nov 3 '15 at 23:07
  • $\begingroup$ Either the council could bestow the title & rights of the hero or the hero would be forced to make individual arrangements with vendors. This wouldn't necessarily be a great difficulty if the hero very clearly and obviously saved the town. Essentially he could be so well-liked that "his money isn't any good here" everywhere. This privileged status could be revoked, formally or informally, if the hero behaved like a real turd. (and people weren't afraid to tell him so.) $\endgroup$ – SudoSedWinifred Nov 3 '15 at 23:10
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They say that something is only worth what you can get for it. In a modern economy of scale many small items get a price set by the market so it appears that there is a 'value' for everything but this is only the case because of the liquidity of currency that is available.

But for more expensive items this can break down (a little). You can see this when prices can be negotiated considerably, such as house prices in a downturn or in a boom. There's no fixed price they rise or fall dramatically.

The same applies to such a primitive economy. When you arrive with a suit of armour in tow, it can not be worth more than someone else has to offer. No matter what the guide book price might be at the big city that the Armourers to the King would charge you, if you have to sell it to a man who only has 3 silver pieces, then 3 silver pieces is all you can get. In a town as described this might not be money at all but other goods (as barter).

The other aspect is value to the inhabitants. A suit of armour may be nice and shiny, but if you're starving, its worthless. Like trying to sell a Ferrari to a place that has no gas. Nobody will take it off your hands, or they might offer you $10 so they can keep their chickens in it.

So what would happen in such a place is that the possessions of the inhabitants would increase where they possessed high-ticket-price items, but would not consider them as wealth. A bit like the Aztecs who had so much gold that they considered it just a worthless shiny metal and were happy to trade large quantities of it far in excess of what the early Spanish explorers considered it to be worth. (which is another lesson. If civilisation is every contacted again, and every town inhabitant has 3 magic swords holding up their washing lines, traders will quickly appear to trade goods worth something to the inhabitants for those items. Want a magic sword? It might only cost you a bag of turnips at this town)

Some RPG games try to model this as inflation - a suit of armour is worth 100gp but after you're delivered 5 suits to the local smith, the price drops to 50gp. This doesn't reflect reality, and a better way to model it is in terms of the smith's stock and access to raw materials. However, such a system is complex and requires a lot of book-keeping.

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  • $\begingroup$ Love the image of someone raising their chickens in a Ferrari... $\endgroup$ – Michael McGriff Nov 4 '15 at 17:54
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    $\begingroup$ @MichaelMcGriff I got tit wrong.. should have been a corvette $\endgroup$ – gbjbaanb Nov 4 '15 at 18:44
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The Hero is Limited by the Towns Economy, Not "Wealth"

In a regular RPG, the shopkeeper with +5 vorpal swords in stock won't lend you a rusty dagger to save the town with. A mid level adventurer probably won't have much difficulty persuading townsfolk to part with required items. They could use

  1. Good will (Look, I killed the dragon that was setting fire to your crops...),
  2. Trade (The scales on this thing alone must be worth a fortune), or
  3. Force (You'll call the town guard? I bet they can't even breath fire!)

The bigger issue is that, as the hero is the only one regularly finding cool items, whatever the townsfolk have is probably less cool than the hero already has. The hero may find himself building up the towns economy just so they can make things that they hero actually wants. Just hunting monsters to extinction for XP will as a side effect help the town grow. However, if the hero wants a regular supply of truesilver arrows, he'll have to clear the mines out and gift the town guard with magical items so they can protect them from the occasional monster he hasn't already killed for XP.

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Deep in the wilderness there won't be much loot to be had. Even if there are other villages nearby they'll probably be in the same position - impoverished and barely getting by.

He could hunt and bring fresh meat as well as other resources such as wood etc. He can find rare ingredients for the magic potions of the local alchemists / magicians etc.

I don't think he'll be able to sell them to the "shopkeeper" - there will be very little trade going on, most peasant will be self sufficient and won't have any disposable income. All of his loot will be luxury goods that no one would be able to afford.

The only option is to trade those things to the local lord in exchange for housing, inclusion to the local court and preferential treatment in general.

If you look back in history, people who were allowed to eat at the lord's table were a big deal because pretty much everyone else starved.

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    $\begingroup$ This is definitely the way it would go, considering the lack of expendable income. The economy of the hero would be all about the exchange of goods and services, not money. Protection, exploration (assuming they want to try to find other towns), and hunting would be his chief employment, and in return would likely get the preferential treatment you mentioned instead of money. Aside from equipping the local populace with defenses, the "loot" wouldn't be of much use. $\endgroup$ – thanby Nov 4 '15 at 13:05
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I can't make a comment due to my low reputation, but I'd like you to take a look at the game Recettear. Don't look at the story or how the game looks like if japanese games aren't your thing.

But the gameplay could interest you : it's about being a shopkeeper that have to follow the demand, make a lot of money, etc. And you're also forced to go in the dungeons to have our own stock. But your inventory is limited so you can't carry more than 20 items. So, you have to make choices in what you will bring home, what the customers will buy, etc etc.

Take a look at this game, I think it will inspire you if you don't know it yet.

EDIT :

To explain a little more, like @bilbo_pingouin asked, the game is about being a shopkeeper. You have a debt from your father that you have to pay, and you have to pay more each week.

So, what you sell are items you get from dungeons. You explore dungeons with adventurers (not the important part of the game) and you get items. To make a link with the other answers, here, you're able to carry only 20 items (even if, in theory, you could carry 20 elephants or 20 candies).

You will be able, then, to sell (or not) the items you got from the dungeon in your store. There's a way of promoting certain items, but it's not relevant here.

Then, you have your customers. Some of them will make some orders they will get 3 days later, some will buy in store, etc... And some will try to sell you things. So you have to buy low and sell high, which could help you, for your problem, to see what could think a shopkeeper in this situation.

And as you said, there must be supply and demand. In this game, sometimes, the demand will go very high for certain items, so you can sell them at 500% or something of their original price. Or the demand will drop and nobody will buy it, or even worse : they will ask you to sell it to them at a cheap price (so you don't make a profit AND you lose the item because you sold it).

For all these aspects, I think it could help you a little to see what could a shopkeeper wants when it runs its store. I hope I was able to be understood.

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  • $\begingroup$ Indeed, low reputation prevents that, but in general, it should be quite easy to get some reputations elsewhere on the site, and then comment. But while you're at it, you could explain a bit more what you learned from the game which could answer the question. $\endgroup$ – clem steredenn Nov 4 '15 at 9:31
  • $\begingroup$ @bilbo_pingouin I edited it. I hope it's enough now. $\endgroup$ – Keker Nov 4 '15 at 12:45
  • $\begingroup$ I like that game. It's not a bad idea to look at it from a merchant's perspective, but the hero's time would be better spent doing the things that only he can do. He could have an interesting partnership with a merchant who does sell the loot for him, though. $\endgroup$ – Rob Watts Nov 5 '15 at 18:02
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In the rush for economics, everyone seems to be missing a few basics. Which in my experience is about par for the course for economics as a subject, but anyway...

Beasts don't drop helmets. Furs and hides are always a useful commodity. In a fantasy context, various other bits of beasts (bones/teeth/blood/whatever) may also have value, and would be sold in the same way. And for beasts with edible meat, a town-sized free meal will go a long way to making the hero popular, or can be preserved (salted/dried) if appropriate. Beasts are either rare (e.g. basilisks) in which case there aren't enough to make over-supply an issue, or they are common (e.g. wolves) in which case there will already be an established trade for their skins and a bunch of other hunters also selling them (including hunting in the same area as your hero).

Of course this might lead to your town making roofs from dragon scales instead of wooden shingles. No matter - dragon scales are only useable by magicians in the city, and your scenario prevents any trade with the city.

Bandits are a different situation. Let's think about the actual items first. The "50 leather helmets" scenario is as fake as the "weapons store that buys everything". Bandits are most likely to have home-made bows, spears and cudgels, and any leather armour is equally likely to be home-made and hence not saleable. The most valuable thing you're likely to get from bandits is their clothes, boots and pocket knives, which are worth something to regular villagers.

Of course a group of bandits who deserted from an army/militia might have some decent kit, in which case an army/militia would probably like it back. They might also have some decent stuff looted off armed travellers, but if you postulate enough armed travellers to outfit a bandit camp then you have yourself an instant market which will take this kit anyway.

And then you start thinking about how many bandits there actually are. Bandits staying in one place (e.g. Sherwood Forest) are likely to be disaffected locals. Kill that group, and it's likely to be a while before enough disaffected locals are brave enough to challenge authority again. Other groups will wander from place to place, pillaging villages as they go, which is more typically the behaviour of army deserters, but again there's only so long you can get away with this before either you run into a well-organised militia or you become infamous enough that the local lord/prince decides to stomp you with his army. Either way it's not a receipe for a long career as a bandit, and both of them exclude the likelihood of a career as an actual bandit hunter.

And that's before we think about your specific example. If magic has wiped out trade because it's too dangerous to travel, then it's also to dangerous to be a bandit. A group of blokes living in a camp in the woods translates to "low-risk crunchy snack" for your magical beasts. In other words, the limits you've imposed on the scenario will also mean that your perceived problem can't ever happen.

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At first, the hero would be able to get pretty much nothing for his loot. A few days worth of food for a few swords, or two days of work from the blacksmith (fixing the hero's armor) in trade for some raw materials (that full plate armor from all the other answers will be melted down for farming tools). The townspeople don't have anything else to spare, they may not even have any gold or silver coins.

The only way for the economy to grow in such an isolated place is for the hero to bring the city resources that it can use to increase its production. Arm the town guards with Magical Crossbows of Monster Slaying, supply the farmers with Magic Beans and Golems, and they'll be able to pay... still almost nothing, but at least a little more.

If the hero works very hard, giving away all his loot to the town, and is lucky enough to survive the many expeditions, he might retire in a town that can afford to have more of its people producing stuff of value to the next hero.

Only if trade with a larger market (the outside world, if it still exists) is established will all of this change. The most valuable loot therefore would be related to that. Saddlebags of Invisibility, anyone?

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Don't neglect recycling value.

Sure the merchant doesn't need 5 suits of armour but steel is expensive, valuable and can be used for many things, same but less so for leather/bone/iron/copper/wood/...

Maybe that's why in games you can buying armour costs 5 bazillion gold pieces but you only get 7 silver back for selling it; you're buying craftsmanship but selling scrap.

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I suggest beating swords into ploughshares - or maybe scythe blades. In the long run that valuable metal increases the economic value of the fields and other work in the town. Also the boundaries of those fields may extend slightly, even if the town can't expand, because there are better weapons to fight off slightly higher level monsters. That will lead, over years, to more manufactured goods being available to the hero and maybe the town even being able to spare one of their mules to help him bring back more loot. I hope the hero is long-lived.

One interesting corollary is that your unbreakable vorpal crystal greatsword of sharpness is considered trash because it's too heavy to use for the normal farmers and it can't be worked by the blacksmith. Maybe the village could use it as a fencepost though.

In practice though, the hero's main economic benefit would probably be as a guard protecting workers from monsters and allowing them access to resources they couldn't previously get to - trees in the forest, a trout stream or some metal ore for example.

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The town you describe won't be buying his loot--a subsistence economy in a small town will have little money and what money there is will have to be spent on things of direct value to the people purchasing it.

The only things they might consider purchasing from him are supplies--something they are unlikely to have in this scenario unless the monster itself meets that criteria.

Expect him to get the value of any monster meat he brings in and if he makes it safe enough they don't need to man the watchtowers then he'll get the labor that would otherwise have gone into manning them but that's about it. They can't trade away what they need for survival, nor would there be anything in town to buy with that money even if they did.

The town will of course be grateful and he will get whatever non-cost services they are capable of providing--he will, for example, never want for a place to sleep. Depending on the society he might also never want for a bed partner.

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You ask a fun question.

Everyone I think has sufficiently covered the basic economics in play. What I'm offering is auxiliary information.

You're talking about a subsistence economy, but with just enough resources to be able to afford guards and guard towers? However shoddily built, this doesn't really sound realistic. If there's enough organization for a town guard, this generally dictates that there's enough of an economy that you can have dedicated guards, and that the common people have enough free time to be able to build defensive structures such as towers. Which also suggests some kind of public government to collect taxes and pay the guards. If you look at history, this necessitates some kind of economy beyond hand-to-mouth.

Also note that it is very rare for all resources to be readily available... so for realism, you really will have to have some kind of inter-town trade. Economies don't exist in a vacuum, and there are always people willing to risk travel for profit.

Also note the strategic importance of a town that repels monsters isn't going to go unnoticed by the nobility, whose feudal job at least will be to protect their fief, and ambition allowing, to acquire territory and defend it. It is highly unlikely that the town wouldn't be confiscated/acquired by a lord and be used directly as their primary base of operations. Having a noble in the town's presence is going to drive the need for more than subsistence goods in order to fund the noble lifestyle as well as all of the support for the lord's soldiers.

If you decided to mitigate that by saying that every town has the ability to repel monsters, then you're still going to have to deal with the the strategic importance of this... Just like cities tend to be built by rivers, cities and towns will be built on these safe spots if they're big enough. Any aspiring Lord or Warlord is going to be very interested in every one of these that can be found.

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  • $\begingroup$ The existence of the town guard is out of necessity - without monsters they wouldn't have a town guard and wouldn't be in a hand-to-mouth situation. With the monsters, they need to have a town guard even though it strains the town. $\endgroup$ – Rob Watts Nov 6 '15 at 17:34
  • $\begingroup$ Also, in my specific scenario it's not a "risk" to attempt to travel, it's a death sentence. Nobody other than the hero can survive outside of the safe zones. If there are still any nobles around, they're as stuck in town as everyone else. $\endgroup$ – Rob Watts Nov 6 '15 at 17:38
  • $\begingroup$ It's the suggestion of guard towers that makes it not feel right. For believability in a scenario like this I'd leave out the guard towers or change them to things like deer/hunting stands. That sits better in my mind with a subsistence economy balanced against survival. When you start talking about defense structures, it's extremely rare for such things to exist without higher levels of organization beyond the simple anarchy that typifies a remote rural environment. $\endgroup$ – avgvstvs Nov 6 '15 at 17:39
  • $\begingroup$ What I had in mind is a basic elevated wooden platform with a roof and a ladder up to it. A very basic guard tower. $\endgroup$ – Rob Watts Nov 6 '15 at 17:42

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