Project Lore

The terms "supply and demand" are terms incorrectly thrown around by a lot of players. I think the average player understands that more supply means lower prices and more demand means higher prices, but many players do not understand changes in supply and demand very well. Its a problem that many beginning economics students have as well, so lets take some time to investigate it.

The first step to understanding a phenomenon is to collect data about it. When evaluating supply and demand of a particular product, economists ask the people selling the product "how many of this product would you be willing to sell at a variety of prices?", and of the consumers they ask "how many of this product would you be willing to buy at a variety of prices?" Using this data, they create charts called "supply and demand schedules". Lets look at a made-up example where we try to evaluate the Primordial Saronite market.

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Goblinism 101 connects real-life economic principles with the markets that exist in World of Warcraft. It seeks to teach about capitalism's WoW analogue, goblinism, through examples and stories.

The economy of World of Warcraft has a lot of similarities with real world laissez-faire economies. There are some key differences, but it is a close model of a no-government free market.

One of the biggest differences between a typical WoW economy and a modern real world economy is that there is little to no product differentiation and little to no innovation. That is, the Merlin's Robe you get crafted by your guildmate Legolasxlol is identical as the one you buy from a stranger on the auction house, which is identical to all other Merlin's Robes. Additionally, nobody can create or discover new items. Nobody can say "gee, I wish this belt had more stamina on it" and research ways to craft belts with more stamina. The only real exception is when there are recipes that are difficult to obtain or are very new. Jewelcrafting recipes are a great example; there are hundreds of cuts and few people have a vast library of recipes. Players have to buy them by spending time on dailies or money on Titanium Powder, an equivalent of research and development in the real world. There are some other exceptions, like Northrend Inscription Research, but by and large there is no innovation or product differentiation.

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I often can't understand the average player. Many players acquire gold primarily by doing dailies, farming, or running random dungeons. All three are relatively comparable in profitability. Then again, most players don't have much gold and make just enough to get by. Sometimes they get a windfall, like a Battered Hilt or rare pet drop, then put it on the Auction House, convert their fortune to cash, and stop working to acquire gold. Most players will buy their tier 10 pieces or other Frost Emblem purchases as soon as they have enough emblems instead of buying Primordial Saronite and selling it for an easy ~2,000 gold. Its almost like having the ability to control when you get fortunate enough to cash in on a high-tag item, but hardly anyone does it. Why?

There are three cognitive biases that can help explain this phenomenon - the endowment effect, also known as loss aversion, system justification, and hyperbolic discounting.

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I recently had the opportunity to speak with one of my favorite WoW bloggers, Gevlon of Greedy Goblin. Gevlon is one of the few players in the game who has reached the elusive "gold cap" of 214,748.3646 gold. He is known for being extremely cynical and having radical and critical views of almost everything in WoW - from the game becoming too easy and the value of networking in game to more complex topics like objectivism, feminism, and welfare. I've been known to be cynical at times, and Gevlon's unique ideas often give me some great food for thought. Thanks for talking with us today. Tell us a little bit about yourself and how you started blogging. I've been playing WoW for 2 years. I've never had problems with making gold, had around 5-10K gold all the time. I had my first 100G before lvl 20, and 5000G before going to Outland. I thought everyone was like this. Then someone asked for 1000G for their epic flyer and promised they would "farm a lot" to pay it back. I asked him what "farming" was, and he described the terrible routine of grinding elementals in Shadowmoon for hours. Others joined in guild chat and agreed that besides buying gold, your only choice was grinding. That's when I decided to make this blog. Larísa helped with the first steps; I figured out the rest. What is the appeal of collecting gold? You often criticize gold sinks like the Traveler's Tundra Mammoth or the motorcycle mounts, so what do you spend your gold on? The appeal is not grinding. Ever. Nor doing daily quests. I haven't done a SINGLE Argent Crusade daily; no wolvar pups for me either. For me, gold has one purpose: raiding. I pay five thousand gold per week to a guild to raid despite my 20-30% attendance. You have talked about how you "buy" a raid spot since it is easier and quicker for you to make money than it is for you to spend time with groups that are just learning the encounters. Can you talk about this briefly? I like the challenge of raiding, but I don't want to spend 3-4 evenings on it, especially since serious part of it is repetitive. Orbituary is great at first, fun the second time, and just boring third. By paying, I attend 1 raid per week. I skip farm-raids and go directly to the most interesting hard mode attempt. I was present on Orbituary and Steelbraker first, and currently I'm going to Vezax hard tries. I don't even have the normal Vezax kill. I've already written that I find gear upgrades overvalued, so I don't bother farming gear. My gear is a mixture of random ilvl226 with 213 and even 200 trinkets. I still got lot of gear, since everyone else already farmed everything out of Ulduar normal modes, so I have no competitor for ilvl226. You "roleplay" a "greedy goblin" a bit on your blog, or at least use it as a metaphor for the archetype of a player out to make gold wisely. How and why did this start? Goblins are a money-oriented faction in WoW, so it was an obvious identification. I've started the blog in a roleplaying fashion, but that faded away quickly. I like the word "goblinism" since it is without the non-business aspects of real world philosophies. Terms like "liberalism" not only mean free market, but also the support of gay rights. "Neo-conservatism" not only means deregulation, but also violent crusades against the "enemies of freedom". I don't want to say anything about these things; they are simply not my topic. By being "goblinist" I don't have to struggle with comments like "how can you still support neo-conservatives after Abu Ghraib?" You have recently started a "goblin apprentice" program where you help lucky players learn how to make gold and blog about it. Can you tell us about this? From time to time I post an "apply now" post. People send me mails. I pick one, create a banker toon on their realm and start giving them advices how to make gold. Post their progress on the blog for other readers. When I write this, the second applicant is not yet selected. The first one made 5K in a week. What WoW economy-related blogs do you read or suggest?

• Just My Two Copper
• Zekta's Stuff
• Warcraft Econ
• One Copper
• The WoW Street Journal
• WoWenomics

Do you think that the professions are "balanced" for money-making? People agree on one thing: the worst professions to make money are the two they currently have, no matter what they are. Inscription is definitely the most profitable, simply because it's the most complicated (you have to juggle 350 recipes), so not many people do it. The rest of the crafting skills have a similar gold per hour ratio, and all of the crafting professions are way above grinding or even gathering. You seem to have mixed feelings on Inscription. What do you think about the profession, and what would you do to change it? WoW is made "casual" friendly (I really hate this "politically correct" term). Still, Inscription needs lot of addons, seed money, and serious time to start (after that it's running quickly). So I'm not surprised that there are not many scribes who use it to make money. I would change the glyph system so that adding glyphs does not destroy old glyphs. When you apply a new one, you should get the old glyph returned to your backpack. That way, the huge demand for glyphs would decrease (and also the huge money the common players pay to goblins). What posts do you suggest new readers read to get an introduction to your blog? The "my business" tagged posts. They are the most directly about making money. What/who is M&S, and where did that terminology come from? Morons and slackers. I believe WoW is easy and everyone who fails in it is either as dumb as piece of rock or as lazy as a welfare leech. However, real casuals cannot fail as they don't raid or PvP. There is no "success" or "failure" in fishing coins. What add-ons do you recommend or use for your daily trading? Auctioneer. The rest is for crafting: Lil'sparky, whohas, possessions. What do you think about gold farmers? Should Blizzard being doing more to stop them, or are they inevitable and even essential to the current game economy? They will exist as long as there are M&S who can't make money. Blizzard won't do anything about them since the goldfarmers also pay them $15 a month and they don't harass other players. What simple tips can you offer to players looking to pad their wallets a bit? Have the Auctioneer addon so you won't sell stuff for half price. Also, don't be a packrat. There is deflation; the items that are worth 100G today will be worth 10G a year from now. Sell everything in your bank that you don't use or plan to use in a short time. You can buy it back later cheaper if you need it. Thanks for talking with us! Thanks for the opportunity!

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