Virtual economies : design and analysis / Vili Lehdonvirta and Edward Castronova.

Format:

Book

Author/Creator:

Lehdonvirta, Vili, author.

Contributor:

Castronova, Edward.

Series:

Information policy series

Language:

English

Subjects (All):

Video games.

Electronic games.

Virtual reality.

Shared virtual environments.

Shared virtual environments--Economic aspects.

Virtual reality--Economic aspects.

Computer-aided design.

Genre:

Electronic games.

Physical Description:

1 online resource.

Place of Publication:

Cambridge, MA : MIT Press, 2014.

System Details:

text file

Summary:

How the basic concepts of economics--including markets, institutions, and money--can be used to create and analyze economies based on virtual goods.In the twenty-first-century digital world, virtual goods are sold for real money. Digital game players happily pay for avatars, power-ups, and other game items. But behind every virtual sale, there is a virtual economy, simple or complex. In this book, Vili Lehdonvirta and Edward Castronova introduce the basic concepts of economics into the game developer's and game designer's toolkits. Lehdonvirta and Castronova explain how the fundamentals of economics--markets, institutions, and money--can be used to create or analyze economies based on artificially scarce virtual goods. They focus on virtual economies in digital games, but also touch on serious digital currencies such as Bitcoin as well as virtual economies that emerge in social media around points, likes, and followers. The theoretical emphasis is on elementary microeconomic theory, with some discussion of behavioral economics, macroeconomics, sociology of consumption, and other social science theories relevant to economic behavior.Topics include the rational choice model of economic decision making; information goods versus virtual goods; supply, demand, and market equilibrium; monopoly power; setting prices; and externalities. The book will enable developers and designers to create and maintain successful virtual economies, introduce social scientists and policy makers to the power of virtual economies, and provide a useful guide to economic fundamentals for students in other disciplines.

Contents:

1 Introduction 1

Real business from virtual goods 3

A new tool for digital design 4

The economics of virtual spaces 6

What virtual economy design can achieve 8

Overview of this book 20

2 Theories of Human Behavior 23

Rational choice 23

Amendments and alternatives to rational choice 32

Theory of play 36

3 Goods: Material, Digital, Virtual 41

Types of goods 41

Goods are used as social markers 45

Goods provide personal meaning and pleasure 51

Goods fulfill needs and solve problems 52

The value of virtual goods 53

4 Supply and Demand 57

Supply 58

Demand 61

Equilibrium 64

What happens when things change? 72

Modeling fun 78

5 Regulating Markets 83

Why regulate markets? 83

Market structures for fun 86

Market structures for monetization 92

Market or no market 97

6 Market Power and Pricing 101

What is market power? 101

Building market power 103

Fighting against market power 108

Using market power to price virtual goods 109

7 Methods of Exchange 121

Common exchange mechanisms 121

Choosing an exchange mechanism 128

Limits of market design: Unsanctioned markets 133

8 Externalities and Secondary Market Trade 137

Introduction to secondary market trade 137

Theory of externalities 143

Negative externalities in secondary market trade 145

Dealing with negative externalities 149

9 Institutions and Nonmarket Allocation 155

What are institutions? 155

Groups and corporations 157

Trust and justice 160

Redistribution 166

Charity and gift giving 168

Crime 171

10 Money 177

The fundamentals of money 177

What makes money valuable? 184

Designing money for a virtual economy 192

11 Macroeconomic Design 197

Macroeconomic metaphors: Wheels and pipes 197

Constructing tire wheel 199

Constructing the pipes: Faucets and sinks 203

Assembling a virtual macroeconomy 212

12 Macroeconomic Management 215

Performance management 215

Monetary policy 220

Production and economic growth 227

inequality 234

Experience 237

Data collection and analysis 240

13 Policymaking 247

How policy differs from design 247

Problems of interest aggregation 248

Policy process 253

Policy implementation 254

Policy assessment 255

Policy and game testing 260

14 Why the Real World Needs Virtual Economy Design 261

Economic institutions as consumable goods 262

Know what you measure 265

The end of materialism? 267

How the virtual informs the real 270

Fundamentals don't change 270.

Notes:

OCLC-licensed vendor bibliographic record.

ISBN:

9780262323314

0262323311

1306801052

9781306801058

OCLC:

880676634

Access Restriction:

Restricted for use by site license.