Virtual worlds, real economics September 11, 2007Posted by jeremyliew in economics, gaming, mmorpg, virtual worlds.
A couple of weeks ago I wrote about how virtual worlds can generate very real emotions. Alex Tabarrok’s blog Marginal Revolution, notes a post from EVE’s (the space based MMORPG) economist that shows that virtual worlds can also generate real economic phenomena. In particular:
EVE consists of more than 5000 solar systems in 64 regions. The solar systems are connected in a complex web allowing for goods to be moved from one end in the Universe to another. Pilots have to be careful because in low sec and zero-zero security zones there is always the danger of being attacked by gangs of pirates looking for easy prey….
EVE is so large it is difficult for anyone to grasp what is going on in all the regions at any given time. Yet the markets seem to be very efficient at distributing information resulting in symmetric prices throughout Empire space (and even further). This is clearly visible in figure 11 which shows the price for zydrine [one of the more valuable minerals that is used for manufacturing in game] in three different Empire regions.
As one of the comments notes:
The main way to analyze a video game economy is in terms of the one truly scarce resource: player time and effort. In Eve, in order for a player to perform arbitrage, he has to physically move the good from one place to another – thus players will only do so if the profits are worth the time spent moving the goods around. Zydrine is a relatively dense good, in terms of value per volume; a small ship can haul thousands of units of zydrine, so a 200 isk/unit price difference between regions can be exploited for millions of isk in one trip. Another mineral, Tritanium, is only worth on the order of 3-4 isk per unit; its price can be a lot more volatile, especially in uncivilized regions where a large cargo ship can be attacked and destroyed.
Does anyone know of other studies done on the virtual economies in other MMOGs, casual online worlds, or social networks with virtual goods?