Product details

This chapter is excerpted from 'The Economics of Online Gamming: A Player's Introduction to Economic Thinking'. This book is made from the connections that the author saw when he compared his experience inside a video game with what he learned through a formal study of economic theory. Set in the Massively Multiplayer Online Role-Playing Game (MMORPG) of Eternal Lands, it follows the true story of Mr.Mind, a gamer who builds a business inside the game world that he calls RICH. This business grows from a small startup to an unregulated natural monopoly that abuses its market power by intentionally losing money to drive competitors out of business. RICH becomes so influential that it breaks the market process with a unique case of regulatory capture. Through this story, the book demonstrates how economic thinking is absorbed by experimenting inside an online video game. The book covers some basic economic concepts such as definitions that describe pieces and features of an economic system; how decisions are influenced by time and money; how supply and demand can change, and how those changes affect a market; and different forms of market structures and their effects on competition. The book also covers more unique economic issues like when boycotting succeeds and fails; the collapse of a cartel; employee loyalty; how a "bad" reputation can actually improve sales; how regulations can have unintended consequences; and who gets left behind when a market changes. Beyond the basic economic ideas that are explicitly addressed, there are more general themes threaded throughout the book: how people respond to incentives; having the right people make decisions for a group; how different markets are connected; and the value of changing your mind when faced with new information. Each of these topics begins with the context of a story and continues with an explanation of the economic theory behind it, finishing with a relevant real-world connection. It supports economic theory in an emotional way that cannot be shared through math or charts or graphs.