I was just thinking the other day that if I wanted to teach economics, I could do so using the MMORPG World of Warcraft. It’s nothing new that MMORPGs have been tapped for learning. There are teachable moments all over the place.
In my case, I was, just the other day, hoping to get my hands on a crafting material called “haunting spirit”. It’s the latest stuff to make my little boots and hat, which my character has been wanting for months. As with any “latest stuff”, the demand is high for a low supply item, so the cost is high. People obtain the haunting spirits by deconstructing (“disenchanting”) items they win in some of the end-game encounters for which you need coordinated groups. While some folks have the time to get to a million gold (in-game currency), I only play one character and make reasonable amounts by using economic principles. Here is what I have done in order to acquire 14 haunting spirits:
A few weeks ago, haunting spirits were dropping from 20,000 gold to 10,000 gold. While I could have purchased 14 of these, it would have depleted my “in-game life savings” by at least half- and as players go, I’m pretty well off in that pixelated world. I decided that I don’t like that price, so I played the auction house.
Playing the auction house is like playing the stock market. You can set prices through buying and selling, particularly if you have volume or take risks. I took a risk. I found someone who would sell me a few of the “haunting spirits” at a rate below the in-game market. This meant I could flip them and make a profit, but that isn’t the purpose- the purpose is to obtain enough haunting spirits to make my boots and hat. I need 14 and now I have 4. Do I hold onto those 4? Nope.
I asked myself, “how much would I like to pay for 14 haunting spirits?” and I answered, “mm, about 3000 gold each.” (On my server, this is a good price right now.) So I listed two of my haunting spirits below the lowest price on there, which was 4750 or so; but above the purchase price that I paid, so I wouldn’t lose out if the market didn’t budge. This is a risk. My object is to get someone to undercut me. Maybe someone will undercut him or her, too. That’s what happened, in fact. Someone undercut me and listed just over 3000 gold. So I took mine off the market and re-listed to undercut them again. They came back in a day and undercut me again. So I bought them and cancelled my auction.
That is called manipulating the market. I had 4 haunting spirits, but wanted 14. I started a price reduction fight, which, if I keep prodding it, will result in cheaper materials.
This reminds me of Walmart. For every low price, we’re paying someone that much less for his/her craftsmanship and efforts. Not that I think an artificially inflated value is a good thing either, but opportunity cost is an often fluctuating thing that isn’t just driven by demand- it’s driven by manipulating forces too. For people away from the keyboard, “in real life”… economic instability is no game. It has dire consequences.
If there’s one thing I can learn from World of Warcraft about economics, it’s this: buy low, sell high, and watch for fluctuation- that is where money is lost… and gained.