A few questions about the WoW marketplace economy for a research paper

[gcs]

Hi guys, I apologize if this post does not belong here or is annoying and has to be removed. I am a college freshman tasked with conducting a basic research study in WoW, and I chose to study the in-game economy of the marketplace. If anyone wouldn't mind answering a few questions it would be super helpful, as I am very new to the game.

1.) Is supply and demand a significant factor contributing to the prices of items, and if so have you ever taken advantage of this concept in order to generate revenue?

2.) Is elasticity a prevalent concept with items and resources in the marketplace? (elasticity is the tendency of a change in price of an item to effect the demand for the item, for example semi-essential commodities such as gasoline and food are thought of as inelastic because even a significant change in price will not impact demand very much, as those who needed to buy gasoline and food still need too. On the contrary, luxury goods for example an iPhone, are considered elastic because a small change, for example a drop in price, correlate to a significantly increased demand)

3.) In what other ways do you see parallels between the WoW economy and the real world economy?

Feel free to answer any or all of these questions I appreciate it!

[Battlebeard]

I'll try my best, even though you used some hard words there.

1. Yes and no. Supply and demand will change the price but not the value and it's kinda crazy how it works in WoW. If there is an item on the AH, that has a value of 1000 gold, when that item is gone on AH, it might pop up again at 3000 cause it's the only one. This is kind of absurd if you compare to IRL, it's not like I would go to a car salesman and see cars for 20 thousand, and the next day they are all sold but he has one left, however now it's 40 thousand. NO ONE would ever buy it, adding that price is insulting, but still in WoW, people, even adults, mistake price for value and add crazy prices. Same for undercutting others. I could take advantage of this, but it feels morally wrong not to mention an insult to my own intellgence. Forgive my poor english, what I mean is simply that people mistake the rarity of how you obtain an item with how frequently it pops up on the auction house and are misunderstanding how supply and demand works in WoW.

2. I don't know, sorry.

3. Very, very little. The difference between WoW and the real world is that in the real world, in any deal, the person who have the money is in power, but in WoW, whoever has the item is in power. It's the very opposite of the real world when it comes to trading and how deals work. There is also no security in WoW. If you mistakenly buy an item for ten times it's value, you can't get your money back, only if you were scammed directly in a trade window will blizzard step in.

Not sure these are good answers, I just reflected a little about your questions and tried my best

[Nathasil]

Hi guys, I apologize if this post does not belong here or is annoying and has to be removed. I am a college freshman tasked with conducting a basic research study in WoW, and I chose to study the in-game economy of the marketplace. If anyone wouldn't mind answering a few questions it would be super helpful, as I am very new to the game.

1.) Is supply and demand a significant factor contributing to the prices of items, and if so have you ever taken advantage of this concept in order to generate revenue?

2.) Is elasticity a prevalent concept with items and resources in the marketplace? (elasticity is the tendency of a change in price of an item to effect the demand for the item, for example semi-essential commodities such as gasoline and food are thought of as inelastic because even a significant change in price will not impact demand very much, as those who needed to buy gasoline and food still need too. On the contrary, luxury goods for example an iPhone, are considered elastic because a small change, for example a drop in price, correlate to a significantly increased demand)

3.) In what other ways do you see parallels between the WoW economy and the real world economy?

Feel free to answer any or all of these questions I appreciate it!

@1) Yes, definetly, and it is absolutely usual for individuals with very high amounts of money to buy off items they consider listed too cheap and stockpile them for a while, listing them themselves when the price hikes up again because of the lower supply. This is more easy to do on lower-pop realms...but these realms also have a lower demand.

@2) Yes. Luxury Items in WoW are mostly mounts, pets and transmog-gear. If the price for these items is raised too high you will most definetly see a drop in demand. Non-Luxury goods would be buff-food, pots and flasks (=raiding consumeables). While you will see a drop in demand if the prices for these go up way too high, it is indeed very much compareable with gasoline IRL. People rely on these goods and if they cannot afford them anymore you will see almost the same results as IRL. E.g. protests on the forums.

@3) The main difference, i would argue, is that in WoW anybody can be a producer of almost anything with very little effort. If i as an individual wanted to supply the market with Gasoline IRL, my options are very limited....it is almost impossible. In WoW, though, you can setup herbing+alchemy in very little time and after that all you need is to put in the time either farming yourself or buy off the market. This directly means that at certain price points people will simply start producing their stuff on their own, even if they don't enjoy doing so. Imagine Gasoline being 1000 Dollars/Gallon IRL. The Average Joe cannot just dig up Oil in his backyard and start refining his own Gasoline. In WoW, this is possible, but it will take him time. Casual WoW players will usually not spend a lot of thought on this and either farm their own stuiff or spend money on it, no matter how much. More engaged players usually calculate if the time they have to invest to farm something themsleves is worth the amount of gold saved.

[Thzz]

1.) Is supply and demand a significant factor contributing to the prices of items, and if so have you ever taken advantage of this concept in order to generate revenue?

Yes, several ways.

There are no anti trade laws in Azeroth.

Looking at supply chains for various crafted items situations occur often where you can continually buy up ALL supply of an important material for some crafted item.

Then hen 1) repost that material at higher price 2) more importantly control the market price for the crafted item to maximize profit on those sales.

This can go on for quite a while, or very shortly. it always reaches some equilibrium where price of mat increases to the point more farmers farm it, thus supply increases and near impossible to control that market.

[Has lost its way]

Hi guys, I apologize if this post does not belong here or is annoying and has to be removed. I am a college freshman tasked with conducting a basic research study in WoW, and I chose to study the in-game economy of the marketplace. If anyone wouldn't mind answering a few questions it would be super helpful, as I am very new to the game.

1.) Is supply and demand a significant factor contributing to the prices of items, and if so have you ever taken advantage of this concept in order to generate revenue?

2.) Is elasticity a prevalent concept with items and resources in the marketplace? (elasticity is the tendency of a change in price of an item to effect the demand for the item, for example semi-essential commodities such as gasoline and food are thought of as inelastic because even a significant change in price will not impact demand very much, as those who needed to buy gasoline and food still need too. On the contrary, luxury goods for example an iPhone, are considered elastic because a small change, for example a drop in price, correlate to a significantly increased demand)

3.) In what other ways do you see parallels between the WoW economy and the real world economy?

Feel free to answer any or all of these questions I appreciate it!

1) Yes but only in cases of extreme rarity where the item is both uncommon to find and from exceedingly hard hard resources to gather ( difficult boss boes, lockouts rare spawns etc.) Good are limitless to only difficulty of acquiring goods comes into consideration.

2) Only during periods of sudden change. The closest example I can give is during a new patch consumables will increase in price while at the end of a expansion all current materials will decrease in price as they become obsolete.

3) There are not really very many beyond extreme luxury items being valued for there rarity. WoW is a world without upkeep so you can never run out of currency. That means that regardless of the consumers ability to generate funds they will never "Need" any item in the market place. It is a market without necessities just convince and luxury goods.

[Thzz]

following on what I said above. crashing markets and controlling supply chains is much less effective in BFA. Blizz has made it such there is little profit in crafted consumables and almost not profit in crafted gear.

If you want to do something interesting for a paper, analyze the introduction of Tokens by Blizzard and impact this has had on the WOW economy.

I'd read that paper.

[MoanaLisa]

following on what I said above. crashing markets and controlling supply chains is much less effective in BFA. Blizz has made it such there is little profit in crafted consumables and almost not profit in crafted gear.

Supply chains. My real life wheelhouse.

1) Yes.

2) Sometimes. Elasticity can change over time for traded goods. Game/patch conditions have a great effect on this. Effectively one economy is traded for another as players progress through the content. Previous volatile prices will settle once the bulk of players move on to other things.

3) It's a completely unregulated free trade economy. People can sell for whatever they like because the primary investment is time for raw materials. Finished goods are another matter but trade changes depending on where the game is. There is also a great deal of speculative trading on the WoW AH.

[kamuimac]

following on what I said above. crashing markets and controlling supply chains is much less effective in BFA. Blizz has made it such there is little profit in crafted consumables and almost not profit in crafted gear.

If you want to do something interesting for a paper, analyze the introduction of Tokens by Blizzard and impact this has had on the WOW economy.

I'd read that paper.

that all depends . mainly on how many alts you have and what supply of matts they provide.

yes compared to other sources that profit is low at best - but they still sell. and so do boe

imo people are stuck in old mentality from WoD/Legion when they were getting thoudands of gold for free from garrisons .

seems like blizzard plan worked 100% - first make people accustomed with having hundreds of thousands of gold in pocket and then crash that free gold making people "think" that farming 1-2k gold at any time is not worth it better buy 200k gold token

works like charm.