Virtual Economics: Applying Economics to the Study of Game Worlds

Abstract

Complex computer games, especially massively multiplayer online games, contain narrative and mechanisms that mimic real economic activities, such as production, trade, and consumption. This has prompted some scholars to apply concepts and techniques from economics to study the complicated interactions inside games worlds. In this paper I review their work, attempt to argue why the approach has merit, and examine its limits and possibilities. In the final part I suggest a possible new avenue, using transaction cost economics to analyse and influence the size and composition of player guilds.

Keywords: virtual economy, virtual currency, virtual goods, virtual world, MMO, MMORPG