Simple Economics of Real-Money Trading in Online Games

January 24th, 2008 Jun Sok Huhh Posted in articles |

Simple Economics of Real-money Trading in Online Games
Huhh, Jun-sok
Seoul Nation University

Abstract

This paper is to provide a theoretical investigation on real-money trading (RMT) observed frequently in online games. To overcome former studies focused much on description itself, economic incentives behind RMT are modeled and identified by reconsidering economic studies related. Firstly, RMT is analyzed by its modes of trading. It is shown that two modes of trading, the continuous and the discrete, have different consequences on the configuration of RMT market. Secondly, economic impacts of RMT are explored in the context of network externalities. Thirdly, two issues of RMT, gold farming and micro-payment, are shortly addressed as an application for the analysis.

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