Economics

Microlandia’s economy is built around companies, not jobs. Every company belongs to one sector, such as farming, factories, building, retail, restaurants and hotels, information and software, finance, real estate, professional services, education, health, or arts. Each sector has its own productivity, output price, gross margin, and typical wage.

New companies are seeded with three months of runway (enough cash to cover the CEO’s salary plus the building’s rent for that period), and the founder also pays the city a one-time business license fee out of pocket. Once they exist, they hire workers, pay wages, sell their output into a demand pool that citizens and tourists feed, and either grow into profit or burn through their cash and close.

The demand side is just as concrete. Every adult is charged itemized monthly costs for food, clothing, phone, leisure, utilities, internet, and (if they drive) gasoline. Households share housing and per-child costs. These are the same items in any real consumer expenditure survey, so the wages need to cover not just rent but a believable basket of consumption. The cost-of-living block on this page is the other half of the picture.

How each sector earns

Each sector draws demand from a different source. The cap that limits a company’s sales also works differently from one sector to the next.

Retail (G) and food and lodging (I)

Share one demand pool fed by citizens and tourists. Overbuild supermarkets or restaurants and every shop only sells a fraction of what it can produce.

Arts and entertainment (R)

Has its own pool of citizens and tourists, weighted more heavily toward visitors. One tourist drives several times as much arts demand as one resident.

Finance and insurance (K) and administrative support (N)

Share a pool whose size depends on the count of other companies in the city. The K plus N market grows only as the rest of the economy grows.

Real estate (L)

Scales with population. A small per-citizen demand, every month.

Construction (F)

Scales with whatever buildings are being put up right now, plus a small per-citizen road-maintenance term. Construction cools off in a city that has stopped growing.

Farming (A)

Has no consumer cap, but it is throttled directly by city water reserves. If your reserves only cover 30% of a month’s farm water need, every farm produces 30% of its potential.

Information and communication (J)

Skips the demand pool entirely. Each company draws two independent rolls (founder quality and idea quality), and each roll lands in one of three tiers: failed, modest, or breakthrough. The two tiers multiply into a per-company demand cap, so most J companies sit at zero revenue (any “failed” roll on either axis kills demand), a small share are real businesses, and a tiny tail of break×break companies have unicorn-scale caps that still require staffing up to actually capture. City size does not change those caps.

Manufacturing (C)

Sells to an unlimited external market and is only limited by its own workforce.

Education (P) and health (Q)

Government-owned. Funded from the city budget rather than the market.

Inside each pool sector, the cap is split between competing companies in proportion to their production, weighted by how good their CEO is. So when supply outstrips demand the better-run firms keep a bigger slice and the weak ones starve first.

Affordability and class

Two affordability barriers shape who can work. The homeless employment barrier and the no-diploma employment barrier both multiply hiring probability downward for those groups, matching real labor-market frictions.

The high-net-worth threshold, the upper-income ratio, and the savings buckets gate who counts as wealthy enough to demand premium housing. The tourism block converts hotel nights into both city revenue and added retail demand. Tune any of these and the rest of the economy shifts around them.

Parameters

Mean starting capital new company

$25,000

Mean starting capital for newly created companies, used in an exponential distribution to determine actual starting capital. New companies are created every day in the city but the starting capital will determine how quickly they can grow and hire workers.

Source: Small Business Administration

Gross margins by sector

Sector gross margin used to size the per-month business-cycle noise envelope around expected revenue. Larger margins produce wider monthly swings. Used by the unit-economics model in conjunction with MONTHLY_OUTPUT_PER_WORKER_BY_SECTOR and UNIT_PRICE_BY_SECTOR.

Source: NYU - Margins by Sector (US)

Monthly output per worker by sector

Number of sector-specific output units a single worker produces per month. Combined with UNIT_PRICE_BY_SECTOR to compute company revenue: revenue = effectiveLabor × productivity × unitPrice × noise × multipliers. Hand-picked integer values whose product with unitPrice reproduces today’s marketSalary × (1 + sectorMargin) for day-one neutrality.

Source: OECD STAN (Structural Analysis Database)

Retail demand units per citizen per month

40

How many retail transactions the average citizen drives per month in sector G (Wholesale & retail). At the current G unit price ($7.96/transaction), 40 units ≈ $320/month per citizen — the bulk of household goods + grocery spend. Citizens dominate this pool; tourists contribute via RETAIL_DEMAND_UNITS_PER_TOURIST_PER_MONTH at a much lower rate, reflecting that visitors browse less than residents.

Source: Bureau of Labor Statistics — Consumer Expenditure Survey (retail + groceries)

Retail demand units per tourist per month

120

How many retail transactions a tourist-equivalent contributes per month to sector G (Wholesale & retail). Tourists spend on souvenirs / convenience goods but the bulk of their wallet goes to accommodation and food (see HOSPITALITY_*) — so the per-tourist retail weight is meaningful but secondary to citizens.

Source: Average tourist daily retail spend × stay duration / month

Hospitality demand units per citizen per month

13

How many hospitality units (restaurant meals, occasional hotel stays) the average citizen consumes per month in sector I (Accommodation & food). Calibrated from BLS Consumer Expenditures 2024: $3,945/yr food away from home + ~$700/yr lodging away from home per consumer unit, 2.4 persons/CU → ~$161/person/month. At our I unit price ($11.93/stay-equivalent), that’s ~13 units/month. Citizens are the secondary driver of this pool; tourists dominate at scale (300 units per tourist-equivalent), but in low-aura cities locals alone can sustain a small hospitality sector — which matches real small-town economics.

Source: Bureau of Labor Statistics — Consumer Expenditures 2024 (food away from home $3,945/yr per consumer unit; 2.4 persons/CU)

Hospitality demand units per tourist per month

300

How many hospitality units a tourist-equivalent contributes per month to sector I. Tourists basically live at hotels and eat out — at ~$11.93/unit this corresponds to ~$3,600/month per tourist-equivalent. Combined with the city-wide tourism-aura sum, this is the main lever turning attractions into hotel/restaurant prosperity.

Source: Average tourist daily lodging + food spend / month

Information startup outcomes

0

Two-axis startup-outcome model for sector J. Sets a per-company DEMAND CAP (not revenue directly): production follows the standard unit-economics formula like every other sector, and the cap bounds how many of those units the market will buy. Each company draws a founder-quality tier (from CEO id) and an idea-quality tier (from company id) independently; cap = baseMonthlyUnits × founderMultiplier × ideaMultiplier × noise. Failed tier (70% of axes) has multiplier 0 — no buyers, sellShare 0, revenue 0 regardless of staffing. Founders with a degree get a small quantile boost toward higher tiers; founders in the 35–55 prime-age window get a smaller one too. 91% of J companies sit at $0/mo in any given month; ~3% are real businesses with real demand; ~0.09% hit unicorn-grade demand caps (which still requires staffing up to capture). Matches the empirical heavy tail of real startup outcomes.

Source: Crunchbase 2026 unicorn count (~1,705 of >170k tracked startups ≈ 1%), CB Insights startup post-mortems (75% of seed startups never reach $1M ARR; 28% of software companies reach $100M revenue), Azoulay et al. (2020) on founder age

Kwh per unit by sector

kWh consumed to produce one sector-specific output unit. Energy cost per company = produced × kwhPerUnit × ELECTRICITY_COST_PER_KWH, charged monthly alongside payroll and rent. Variable cost scales with output, so understaffed or idle companies pay little; full-capacity firms pay the bulk of what the old fixed building-level energy cost charged.

Source: U.S. EIA Manufacturing Energy Consumption Survey 2018 — Flipbook (Dec 2021), purchased electricity 778,396 million kWh; paired with BEA value of shipments ~$5.93T

Unit price by sector

The price at which a company in this sector sells one unit of its output (one crate of food, one widget, one transaction, one engagement, and so on). A company’s monthly gross revenue is roughly: workers × monthly output per worker × unit price, before macroeconomic modifiers (recessions, sector booms, finance/tourism auras, and infrastructure shortages such as no water for farms or energy surcharges on industry) are applied. Sectors that sell expensive units rarely (real estate, finance) and sectors that sell cheap units in high volume (retail, hospitality) end up in the same revenue ballpark per worker, but they react very differently to productivity changes.

Source: Calibrated from MONTHLY_MARKET_WAGE_BY_SECTOR × GROSS_MARGINS_BY_SECTOR

Monthly market wage by sector

The default monthly wage a private-sector company offers when it hires a worker in this sector. The actual salary paid is the highest of three numbers: this wage, the legal minimum wage you set in the fiscal policies panel, and 75% of a single adult’s basic monthly living expenses (so nobody works for scraps even where market wages are very low). Sector-by-sector wage differences are also what drives income inequality between neighborhoods: cities heavy in trade, hospitality, or arts will see a larger share of households stuck near the wage floor, while finance- and tech-heavy cities will spread workers further up the income ladder.

Source: Bureau of Labor Statistics — Weekly earnings by industry, ×4

Boss to staff pay ratio

2.3

Ratio of a company owner’s pay to the median staff wage. Used to derive the owner’s income from the company’s median employee earnings.

Source: U.S. Bureau of Labor Statistics (BLS) OEWS 2024/2025

Employment by sector

Weights applied to the random selection of companies created in the city. Sectors with higher employment have a higher chance of appearing as they have more demand for workers.

Source: Bureau of Labor Statistics

Cost of living

Itemized pre-tax monthly cost of living. Per-adult costs are charged to each adult; household costs are split among adults; child costs are split among adults. Gas cost applies only to car-owning adults. Computed gas: 0.81 × 1500 × 8 / 100 ≈ $97/month.

Source: Numbeo

Homeless employment barrier

0.42

The employment barrier for homeless citizens, reflecting their reduced likelihood of being employed compared to non-homeless citizens. This barrier is applied as a multiplier when citizens search for jobs.

Source: census.gov

No diploma employment barrier

0.5

Employment barrier for citizens without a high school diploma. Workers without a diploma have a 50% higher unemployment rate (5.4% vs 3.7% for HS graduates). Applied as a probability of passing each hiring attempt.

Source: BLS — Education pays, 2024

High net worth threshold

$1,000,000

Combined wealth of all adults in a household required to be classified as High Net Worth. These households demand the best housing with zero disapproval and zero crime, and will leave the city if unavailable. Also the wealth bar the immigration bouncer enforces at premium-tier housing slots.

⚠️ Source pending

High net worth expenses

$4,500

Extra monthly expenses (security, lawyers, personal assistants, etc.) charged to each adult in a High Net Worth household, split among the household’s adults. Sales tax is applied on top like other cost-of-living items.

⚠️ Source pending

Immigrant savings buckets

Savings brackets used to seed each immigrant adult’s starting wealth. The N-th bracket here pairs with the N-th probability in IMMIGRANT_SAVINGS_WEIGHTS_BY_GENERATION. The top bracket is open-ended (Pareto tail) and capped internally at SETTINGS.IMMIGRANT_SAVINGS.MAX_SAVINGS.

⚠️ Source pending

Immigrant savings weights by generation

Per-generation probability that an immigrant adult lands in each savings bucket. Generations are derived from the immigrant’s age at arrival. The N-th weight matches the N-th bucket in IMMIGRANT_SAVINGS_BUCKETS.

⚠️ Source pending

Upper income ratio

2

Households with equivalized income above this × city median are classified as Upper Income. They flee disapproval auras and leave the city if no safe home is available.

Source: Pew Research Center

Middle income ratio

0.667

Households with equivalized income at or above this × city median are classified as Middle Income. They prefer to avoid disapproval but tolerate it if no alternative exists.

Source: Pew Research Center

Average spend per tourist per day

$400

Average amount of money spent by each tourist per day in the city. This includes expenses such as accommodation, food, transportation, entertainment, and shopping.

Source: Budget Your Trip - New York City

Average tourist stay days

3

Average length of stay for tourists in hotels. Guests are checked out after this many days, freeing beds for new arrivals.

Source: NYC & Company Tourism Statistics

Hotel nightly rate

$150

Nightly room rate charged by hotels and motels per occupied room. Hotel revenue is purely occupancy-driven — no guests means no revenue.

⚠️ Source pending

Annual rate of new employer businesses

0.15

The annual rate of new companies per 100k inhabitants that employ at least one person. Used to cap the maximum number of new companies created in the city each year.

Source: Kauffman Indicators of Entrepreneurship