Philip Onorato

World of Warcraft, also known as W.o.W, is played by millions and itself is an economy inside an economy. World of Warcraft currency is divided into three different denominations gold, silver, and copper. The base of the games economy revolves around an auction house and is related to what we call a free market in our economy. A free market is many buyers and sellers and price is self-correcting. The auction house is formed of many buyers and sellers and the quantity of goods and prices always change. There are competitive markets, monopolies, cartels, and oligopolies that affect the normal market. Price will go down when there is an abundance of a certain product and on the rareness of that product can fluctuate the price to go up. The cartels in this game are not companies but guilds and guilds progress through end game content to achieve certain goals, certain goals allow you to make rare products that no other guild can make unless they have reached the same end game content as you. We do not want to flood the markets with this rare good so we can keep prices high, so we make deals with other guilds that have reached the same status as us. Making this agreement is a cartel and we are hurting the market buy keeping prices high on certain products which hurt the little guys, but it is just a game and isn’t illegal but it is illegal in the real world and companies have known to be caught. Monopolies also are a problem in this game for some guilds (companies) they reach a certain point in the game so fast that no one can keep up and they charge up to 10,000 gold for certain products which is a lot of money for one piece of gear. They have many affects on other goods as well as these new products hit the market there is less demand for other goods and this product takes over a certain part of the market but once again you cant call the FBI and you have to go one playing. The items that a certain guild is getting from this end game content can be compared in the real world as when the iPhone hit the market and how the demand was so high on it and the cost as well but apple is the only company who made a touch screen phone at the time and had a monopoly on that product. It is amazing that real world economics is now becoming a process in a video game and what will economics think when more and more games come out like World of Warcraft and what they can learn form a different form of market.