Welcome! Today we’ll be reviewing Virtual Economics: Design and Analysis by Vili Lehdonvirta and Edward Castronova.
Review Summary
- Length: 14 chapters, 294 pages
- Cover Type: Soft
- Personal Completion Time: One Month
- TL;DR Summary: A relatively short book covering the in’s-and-out’s of virtual economies – an interesting read covering different case studies and examples.
- Book Link: Amazon
- Final Rating: 5 / 5 Stars
When I originally picked up this book, I wasn’t sure what to expect – but this book somehow delivered on my lofty ambitions. It does just what it says on the cover, looking at the designs of various online market places (most of them taking place in different video games) and analyzing the different, surprising phenomenon’s that arise. Why are certain usernames, digital goods, or in-game items extremely sought after, sometimes being sold for “real life” currency in the range of thousands of dollars? Where do the virtual, video game economics of World of Warcraft or EVE online intersect with the real-life economics of the Chinese Yuan or the United States Dollar? This book question addresses these questions and much, much more.
Interestingly, I think book also tackles a bigger question, and one that can only arise in the digital realm – how are markets decided when the economy is built on digital information? It’s an interesting question, and one the authors of this book answers thoroughly by looking at different case studies, many different online economies and marketplaces, and the wide array of different phenomena that arise in the digital world.
As the authors put it,
“While the first and foremost audience of this book are the practitioners who create and manage virtual economies, we also tried to make it useful to scholars and policymakers, to teachers who want to introduce elementary economics in a novel way, and even to gamers seeking a deeper understanding of the games they play.”
Lehdonvirta, Vili, and Edward Castronova. “Introduction.” Virtual Economics: Design and Analysis, The MIT Press, Cambridge, Massachusetts, 2014, pp. 2–2.
But I would go a step further – the information in this book is so plainly conveyed that I think anyone with a basic understanding of economics could appreciate it, and anyone interested in digital economies would enjoy it too; this book receives my recommendations for anyone interested in virtual economies, I think it’s a great read and (if this is in your area of interest) I think you’ll agree as too.