What is tax / commission fee?

A tax or commission fee takes a share of money that flows through a transaction. Governments use taxes to fund public goods, and platforms or owners charge commissions for providing a market, a service or the use of an asset. Both change what the payer and the receiver end up with.

How it works

The fee is usually a fixed percentage of the amount, so it grows with volume. It lowers the net price a seller receives and raises the price a buyer pays, and the split depends on how sensitive each side is to price. The more elastic side avoids the cost by changing behavior.

High rates can reduce the activity being taxed. Fee revenue rises with the rate up to a point and then falls, because buyers or sellers leave or avoid the fee. Who truly pays can differ from who is charged. If buyers are more sensitive to price than sellers, a fee charged to the seller ends up mostly borne by the seller, and the reverse holds when sellers are the more sensitive side.

Example

Say an online marketplace charges a 10% commission and a seller sells 200 items at 50, or 10,000 in sales. The marketplace takes 1,000 and the seller keeps 9,000. If the commission rises to 20%, the marketplace would take 2,000 on the same sales, but if the seller moves half the volume elsewhere, it collects only 1,000 on 5,000 of sales. Illustrative numbers only.

In a game economy, a player who owns a workshop collects a fee whenever others use it, and designers set the rate so owners are rewarded but users are not driven away.

How to model it in Machinations

Use a Source for transactions, a Gate or a connection with a percentage that sends the fee to a Pool for the receiving party, and the remainder to the seller's Pool. Make the rate a Lever and a State connection from rate to volume. Play and chart both Pools to find the revenue peak.