Entries in goblinism 101 (2)
Goblinism 101: Introduction to Supply and Demand
Heartbourne
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.
Goblinism 101: Real-Life Economies Vs. WoW's
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.