http://www.26econ.com/learning-from-virtual-economies/ Online economics Fri, 10 Oct 2008 20:46:41 +0000 http://wordpress.org/?v=2.3.2 http://www.26econ.com/learning-from-virtual-economies/#comment-4531 Eliezer Thu, 03 Apr 2008 04:56:42 +0000 http://www.26econ.com/learning-from-virtual-economies/#comment-4531 No, interestingly, at higher output levels the average cost actually *decreases*. As a producer works, his experience levels increase which allow him to use more advanced virtual technologies and to produce more efficiently. Still, by providing a large quantity of the product, the producer saves the buyer hours of laborious effort (the tedious mouse-clicking) and the buyer pays a premium for being able to buy a large quantity in a single transaction. No, interestingly, at higher output levels the average cost actually *decreases*. As a producer works, his experience levels increase which allow him to use more advanced virtual technologies and to produce more efficiently. Still, by providing a large quantity of the product, the producer saves the buyer hours of laborious effort (the tedious mouse-clicking) and the buyer pays a premium for being able to buy a large quantity in a single transaction.

]]> http://www.26econ.com/learning-from-virtual-economies/#comment-4528 aaron Wed, 02 Apr 2008 23:01:06 +0000 http://www.26econ.com/learning-from-virtual-economies/#comment-4528 Eliezer: That's an interesting observation. What does the seller's production technology look like? Are there diseconomies of scale (average cost increases at high output levels)? Eliezer: That’s an interesting observation. What does the seller’s production technology look like? Are there diseconomies of scale (average cost increases at high output levels)?

]]> http://www.26econ.com/learning-from-virtual-economies/#comment-4521 Eliezer Wed, 02 Apr 2008 21:18:33 +0000 http://www.26econ.com/learning-from-virtual-economies/#comment-4521 One of the things about virtual economies that I'd like explained is the pricing model. Specifically, in RL (so-called "real life"), when a consumer purchases a large quantity of something, there's usually a volume discount. In virtual economies (as least the one that I've been involved with - Runescape), if you want to buy a large quantity of something, you pay a *premium* to the seller for providing the large volume. This is true despite the fact that there is in many cases unlimited storage capacity and no overhead for holding inventory in the virtual world. One of the things about virtual economies that I’d like explained is the pricing model. Specifically, in RL (so-called “real life”), when a consumer purchases a large quantity of something, there’s usually a volume discount. In virtual economies (as least the one that I’ve been involved with - Runescape), if you want to buy a large quantity of something, you pay a *premium* to the seller for providing the large volume. This is true despite the fact that there is in many cases unlimited storage capacity and no overhead for holding inventory in the virtual world.

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