Paying by the hundred

In the previous post, I suggested that companies should pay dividends for each £100 of their income. How can we make this work in practice?

The idea raises a couple of obvious questions. First, at the beginning of a game, will a company be generating £100? If not, it won’t be able to pay a dividend, players won’t get any income, and the game won’t progress. Even if we allow a dividend of £0 to increase a company’s share price, leaving players with no cash income would cripple the game (or at least seriously change it).

Second, if a company’s income is not an exact multiple of £100, what happens to the remainder after the dividend is paid? Does the company get to keep it? This might remove the pressure on deciding when to pay dividends and when to keep income for the company itself, which is a key strategic decision that I don’t want to dilute. Alternatively, is the remainder just lost (as “administrative charges”)?

Third, will this rule have any effect on how the share price changes? In some games, the dividend paid must be more than the current share value in order for the share value to increase. Should this be based on the company’s income or on the dividend that it pays out?

Last, will this rule discourage companies from trying to extend their routes, until they can make significant changes? And would this be a bad thing? In many 18xx games, companies gradually optimise their routes, perhaps increasing the value of a station or bypassing a low-income station. If a change only adds £10 to the income, will it be worth doing? Arguably, the game might flow faster if players aren’t constantly looking for small increases in income.

My current answers for the above is that share prices will only rise if the company’s income (not dividend) is equal to or higher than the current share value. If the income is £100 more than the share value, the increase will be double. This will give some incentive for companies to keep increasing their income, while at some point small track changes may become irrelevant. This is to the good; I want the game to focus on strategic decisions rather than small-scale optimisation. Any remainder after paying dividends will be lost. (Possibly I might allow the company to keep £50 if the remainder is £50 or greater, but this is a matter for playtesting).

The key question is how to ensure that companies can earn enough to pay a dividend at the start of the game. This is a matter of map design and ensuring that companies can run enough routes. It may be necessary to increase the base value of stations – we shall see.