Re: [xmca] articles on economics of online multiplayer role-playing games

From: Steve Gabosch (sgabosch@comcast.net)
Date: Mon Mar 13 2006 - 23:20:24 PST


At 08:44 PM 3/13/2006 -0800, Mike wrote:
>Ugh, Steve, are you voting that we discuss virtual reality instead of
>Oksapmin math? Majority
>rules! See xmca where the voting booth is open! :-)
>mike

LOL. No, I don't think so. Don't mean to in any case. I voted
yesterday to ask Erlbaum to free up the 3 articles so we can study
Geoff Saxe's special issue as a group. I like the way we regularly
discuss MCA articles on xmca and hope we continue.

Your offlist suggestion to me to read that Julian Dibbell article on
gaming was appreciated. But that article left too many questions
unanswered so I did a little googling and found the Clive Thompson
article, which is much better than the Dibbell piece, and located
some of the Edward Castronova material as well. The Thompson article
is a thoughtful description of the economics of the gaming world
based on Thompson's word.

Edward Castronova is an economics professor who started to
economically analyze these gaming worlds in 2001. According to
Thompson, Castronova made quite a splash. In one game Castronova
analyzed, he estimated one "platinum piece" used as virtual currency
within the game was worth one real US cent in the real
market. Castronova based this analysis on the prices virtual
artifacts fetch on cash auction markets such as E-bay. This is a
remarkable insight.

In certain ways, this phenomena appears to be a straightforward
confirmation of the labor theory of value. It takes many hours to
create valuable virtual artifacts in these games, and E-bay prices
seem to go up proportionally as socially necessary labor time to
create these artifacts increases. Supply and demand, as always, play
a big role in price behavior. But the time to reproduce a gamer that
can spend hundreds of hours in a month or two creating specific
virtual artifacts seems to be the determining force that prices
fluctuate around.

I thought I would pass on those urls in my previous post to xmca in
case someone else in our neighborhood was interested in the real
economics of virtual internet worlds.

- Steve

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