Dev Diary 1

Welcome! This diary will introduce Line Go Up, the key mechanic, and the design philosophy behind the game.

What is Line Go Up?

Line Go Up is a game about making money through the knowledge of which stocks will go up and which stocks will go down. Fundamentally, this requires distinguishing the signal from the noise and identifying the underlying truth around which stock prices fluctuate. Once the truth is identified, you can translate it into an optimal trading strategy, make money, and, more often than not, win the game.

However, the market conditions, which are selected at the beginning of each game, define the underlying truth. So, even if you master one market condition, other conditions will present new and unique challenges to decipher.

What does a game look like?

Each turn, players simultaneously submit buy and sell orders, and the orders are revealed only when every player is ready and then the stock prices are updated. Throughout the game, players have different types of information available to them:

• Interactive stock price graph: Lines can be turned on and off by clicking on their ticker, and hovering over points provides detailed price information.

• Informative leaderboard: Clicking on a name in the leaderboards lists their current stock portfolio and another click lists the buy and sell orders from the previous turn.

On the right-hand side of the screen, you can see the orders from the prior turn, visible after clicking twice on the specific player. The first click will list the player's current stock portfolio.

Is this a simple game?

Yes, although the relatively simple game hides the more complex issue of identifying the underlying truth. Conceptually, the truth is how the current and previous stock prices influence future prices. For example, the ABC stock may follow the BCUC stock. One possible manifestation would be: if the BCUC stock price goes down, then the ABC stock price would go down the following turn. Similarly, if the BCUC stock price goes up, then the ABC stock price would go up. In this way, these signals help inform more optimal trading strategies.

Okay, so how do I figure out the underlying truth?

Line Go Up has two game modes and each offers different approaches to this issue:

Quick Play (or Multiplayer): This is the core game mode where individual winners and losers are determined. For some players, the underlying truth may be apparent over the course of these games. This is especially plausible in easier market conditions in which the only factor usually provides a signal. However, as the market conditions become more difficult, this approach of simply playing a lot of games will become less practical.

Instead, when setting up a game, the player can choose the strategy for each AI. Most of these strategies are the same across market conditions. However, the “Market-Specific” AI is tailored to each market condition. While not necessarily the most optimal trading strategy, it was designed to exploit the underlying truth in some way. Thus, astute players may infer aspects of the underlying truth by aligning the Market-Specific AI’s trading decisions with the stock prices in each game.

Strategy Creator: This is the game mode specifically designed to help identify the underlying truth. It allows players to assess the performance of possible trading strategies through the simulation of 1,000 games. For example, if a player has a hypothesis for a better trading strategy from quick play games, then the player can create the strategy through a series of IF/THEN statements and test the performance of 1,000 games.

Below is a possible trading strategy that would partly align with the hypothesis that ABC stock changes follow BCUC.

Another powerful part of the strategy creator is the ability to analyze data from 1,000 simulations. This allows players to identify situations that predict future changes in stock prices, enabling a data-based generation of hypotheses for better trading strategies.

The analysis below shows that BCUC changes strongly predict ABC changes. Specifically, the yellow line (which is a local regression line) goes from negative numbers (or decreases in the ABC price) when BCUC decreased to positive numbers (or increases in the ABC price) when BCUC increased. This analysis confirms our hypothesis.

However, as illustrated below, the price difference between REAL and MCMC does not predict the changes in the THC price, because the yellow line is completely flat (and the points form an oval-like ball).

What were market conditions again?

Market conditions define the underlying truth, and they were designed along two dimensions: difficulty (or complexity) and thematic strategies (or at least they aim to encourage thematic strategies). Conceptually, difficulty is a combination of the number of factors that provide a signal for future stock prices and the number of stocks that depend on these signals. For example:

• At easy difficulties, there is usually only 1 signal and only 1 or 2 stocks may depend on it. The rest of the stocks move in a mostly random manner. For example, the stock ABC may increase the turn after the stock BCUC increases and decrease the turn after a decrease.

• At moderate difficulties, there is still usually only 1 signal. However, the connection of the signal with future stock prices becomes more complex. For example, all of the stock prices may move differently due to the signal rather than only 1 or 2 stocks.

• At the higher difficulties, large stock movements are less likely to occur in a predictable manner based on one or two signals. Instead, the average movement of all stocks may depend on similar or different signals. This means that the player has to consistently exploit small and subtle advantages to ensure the line goes up.

This approach aims to create an increasing scale in difficulty for identifying the signal of particular markets with easier difficulties having more obvious signals.

The thematic strategies aim to encourage different optimal trading strategies:

• Aggressive market conditions encourage players to actively buy and sell stocks throughout the game to achieve the best results.

• Balanced market conditions should encourage players to hold the stocks for longer periods of time, including for potentially the entire game.

• Esoteric market conditions are designed to be, frankly, weird. These conditions may encourage regular buying and selling of stocks (or not), and the specific relationships between the stocks are strange.

What is the plan with these diaries?

The next three developer diaries will dive into these concepts in more detail, using the scenarios from the demo as examples.