Andrew Koenig
Mrs. Straub
AP Economics
February 2, 2015
Video Games and the Economy
Video games are an easy scapegoat nowadays for parents and politicians alike for problems that are found within our generation. They worry that games are making us antisocial, violent, overweight, and that we are losing our concentration. But are these assumptions backed by science? Shawn Green, Alexandre Pouget and Daphne Bavelier, from the University of Rochester in New York state, set out to find an answer. They recruited a group of gamers and compared their reaction skills with a group of non-players. The gamers had all spent at least five hours a week on action games in the previous year. What they found was that the gamers made decisions 25% quicker than the non-gamers, with the same accuracy. This leads us to the conclusion that video games could possibly be integral in increasing human capital, which is incredibly important for a functioning society.
Video games have taken some long strides since the original Mario Brothers on the NES. As we enter the next generation of video games with the Ps4 and Xbox1, we have been exposed to a new genre within these games. This being that games are now providing us with economies much like real life ones. The biggest example of this is World of Warcraft, an MMORPG that has been around since November 23, 2004. Over the years WoW has developed auction houses throughout the game that allows players to buy and sell items that they can find throughout the world. This provides supply and demand to these in game items. If an item has a low percentage of finding in the game the low supply will drive the price up. In a similar vein whenever a new expansion comes out there are certain items that will get removed from the game, this will cause demand to increase, and thus, price. But the comparisons to a real life economy don’t stop there. Because of WoW’s lifespan, there are experienced players who have been hoarding gold for years and years, this has caused an inflation problem. Over the past four or five years the game has experienced nearly a thousand percent inflation. To illustrate this it is important to know that in Wow it is possible to pay people real money to mine gold for you. A few years ago it was possible to pay $1 for 1 gold, however, due to inflation that same dollar will get around 700 gold. Because of everybody having so much gold the price of items that used to be extremely cheap are now getting expensive, especially for players just starting out who haven’t been a part of this inflation period. This is making a need for gamers to be on top of trends so that they can adjust how they make money.
WoW isn’t the only game that has it’s own in game economy, there are games like Madden, and FIFA; each with their own buying and selling system that is affected by supply, demand, inflation, even supply and demand shocks. These usually happen around Christmas time when there is a sudden influx of inexperienced players. Players who are willing to pay more for usually cheap items because they need them to start out. And players who are willing to pay too much for some of the expensive items because their inexperience leads them to breaking the bank for cards that they think they need. All of this makes kids think economically which is hard to teach at the scale that these games allow for. Leading to an overall smarter and more intelligent generation.
**This post was partially inspired by this youtube video, check it out! its pretty cool.
Works Cited
"Game Theory: World of Warcraft Will SAVE the Economy." YouTube. YouTube, 14 Aug. 2014. Web. 03 Feb. 2015.
"The Skills from Zapping 'em." The Economist. The Economist Newspaper, 13 Sept. 2010. Web. 03 Feb. 2015.
"Why World of Warcraft Is Good for You." The Economist. The Economist Newspaper, 13 Sept. 2010. Web. 03 Feb. 2015.
"WoW Gold Facts." WoW Gold History. N.p., n.d. Web. 03 Feb. 2015.
This was a very interesting topic to write about. I've never thought of video games of relating to economy at all, but you made some great points! The point of inflation, with the use of the graph helped me better understand what inflation really is. It's interesting that you are able to put your AP Economics knowledge into a video game. Supply and demand shocks are also a huge determinants in inflation and other economic actions. These can cause many producers to produce more or less depending on the shock. Overall, very interesting piece and it was very entertaining to read about how video games effect the economy.
ReplyDeleteI enjoyed the mention of in game economies, however games have also been shown to increase the utility gained from people towards society. For example if you look at the game Foldit, it was shown how making a puzzle game oriented towards helping humanity can be quite successful. As a result we can continue to use games to increase the living standard of the whole world.
ReplyDeleteAndrew, I really liked your blog post and I feel that you took a different idea about a topic that comes up a lot in the news and other forms of mass media. Rather than take a look at all the negatives of video games you looked at the positives and the facts rather than the negatives that a lot of people do. I just thought that you had two separate topics that you talked about in your blog post and it didn’t really flow very well but it still was very good. I feel that videogames are such a huge part of goods that were consumer today, and it is amazing the wide range of ages and variety of people that find video games catered to their personalities. And now it is even a global market so the demand is increasing even more. I really like how you included the video it was very good and tied to the topic very well. What do you think are the most prominent effects of video games in today’s society? Or do you feel like video games are decreasing our productivity?
ReplyDeleteI do have to say before I clicked on the link I wondered if it was a game theory I love that you tube channel. I like how used the world of war crafts economy compared it to real life economies. Another interesting thing you could have added is how much video games help the economy. You could show how much money games like density or GTA 5 made. Though back to world of war craft it was cool how you showed how the economy changed in world of war craft over time. This is what makes games like world of war craft and Eve online their economy is affected by the player.
ReplyDeleteThis was a good topic to discuss because it can relate to the economy in many ways. What you had mentioned in the first part of your paper was that there is supply and demand which can easily be seen in the society today with games. For example, when a new game comes out there would be a high demand and then there would either be a large supply or short supply of the product. Also you have mentioned that there could be more physical illness's can be present when we play vieo games. It is true that we do become anti-social sometimes with game systems present. Instead of going to someones house we just stay online and talk to that particular person. The example that you provided was great and you gave great detail on what it was about and how it related in many ways to economics. I thought it was great that you chose this topic because it can be related to many.
ReplyDeleteI enjoyed reading about this topic. I agree with you that video games provide better decision making skills and can serve a purpose in the economy. Beside from the millions of dollars that video games and gaming systems make, I never thought about how the game itself could be connected to economics. Inflation, Supply and demand are all things that are covered in certain games, which can help young people have a more real-life application to these topics. Because of this I enjoyed your post.
ReplyDeleteVideogamers tend to get a lot of negative stereotypes these days, particularly from adults whose only view of them is to think of the large opportunity cost, or a way for their kids to get distracted from school work and chores. No one ever looks to them as having any benefit. This creates a negative connotation that doesn’t even allow for consideration of the benefits. Take the game Minecraft for example. There are so many benefits that can come from playing the game, such as the ability for kids to expand their creativity and build and design endlessly. As for the stereotype that video games are making kids antisocial, Minecraft is a perfect example for this as well. Many kids will often get together to play, and they are socializing and collaborating as they build and create together. It is reasons such as these that some neglect to see in kids that play video games, since it is often not made obvious.
ReplyDeleteYou make a good point games like counter strike also have economic factors, such as supply and demand. The rare skins are worth more. Also Grand theft auto is an economy based game with buying houses, cars and other things.
ReplyDeleteI also think that the economy can positively be impacted by video games, every year become a bigger and bigger deal. From just playing at home, to nationally ranked tournaments people are wanting more. I've heard they are now giving scholarships at some schools for video game players. Having these games helps a lot of children and adults alike it also is improving our economy with the amount of games being sold and at such high prices.
ReplyDeleteAt first, I thought this was going to be a pro-gamer rant regarding the negative stereotypes that gamers receive given the nature of your introduction, but I was pleasantly surprised at how you took something as silly as WoW and turned it into a valuable lesson in economics. And I agree with you, in the sense the virtual settings can prove to be even more valuable in economic education. Take Skyrim for example: it often requires you to save up to buy things you want and so you must venture out to do tasks in Skyrim to earn that money, as you would need to in the real world. You can also focus on certain skills, deciding to be decent at everything or really good at one thing, emulating the specialties that are necessary in reality. The realm of video games is host to incredible possibilities in teaching younger people economic lessons, and the speed of those reactions, as you touched upon, are often increased by the experiences in the game and the need for speed, if you will. So as more and more complex games arise, more depth and complexity can be added to the economic systems within the games, making for more diversified experiences, more lessons learned, more fun had, and more possibilities. Like I said, I was pleasantly surprised at how your post turned out, nice!
ReplyDeleteMost people who play video games are seen pretty negatively, so I liked how you pointed out the benefits of gaming. I agree that playing video games has benefits to it. With all of the inflation in World of Warcraft, I think that new players would like having more gold to spend, however they might not spend it wisely since everything has become so expensive. It’s good that kids who play this game can get experience economically so they are prepared for real-world situations.
ReplyDeleteYou made some interesting connections between video games and how they impact the economy, like how video games help people make decisions quicker. I like how this aspect doesn't impact the economy through the earning of money, but these people help to create a more efficient economy that will benefit both the producer and consumer. I agree with you that video games have the ability to make kids smarter, however we need to look at the opportunity cost of playing these games and the amount at which they are played in order to determine if the intelligence gained by the game is worth it. For example, playing a moderate amount of video games on a weekly basis could cause a person to give up their time to do things such as homework and studying. This would cause the student's grades to drop, and the intelligence gained from the video game will not help raise their grades, so the benefit of playing does not outweigh the cost.
ReplyDeleteThis was a really interesting topic to bring up, as being a benefit to society. Video games are a great help to you mentally, though it might not be as nice to you physically (gain weight from not moving around, may lead to obesity). First, video games help you with your hand-eye coordination, specifically games like Call of Duty. Second, video games can help creativity, like Evan said, Minecraft encourages original building and designs. Third, games can help your critical thinking through puzzle games, which happen to be my favorite type. For example, in my favorite puzzle game, Tomb Raider, you’re trying to survive a creepy island infested with heartless murderers. It causes you to think on how you need to survive and think about the steps you need to take to accomplish your goal of leaving the island. I totally agree, video games are a mental benefit to your skills.
ReplyDeleteVideo games are fun to play,however i think they are a negative to are society. Video games such as GTA5 prompt violent acts,yet 67% of a Americans own a gaming system. I know video games are good for are economy but i think the promotion of violent acts out way any amount of money.
ReplyDeleteVideo games that use an economic simulation similar to the economy in real life are a great tool for children to learn about how the economy works. Not all kids are prepared to enter the economy efficiently when they graduate because they lack the education to be successful. In some schools, economics may not be required and thus many may not take it. Kids need motivation to learn and playing a video game does not feel like learning to them even though it is. With children being more educated in economics, they will be more likely to achieve allocative efficiency in the future.
ReplyDeleteIt was intriguing that you were able to make a comparison between economics and video games. Nowadays, it seems that video games have just as much importance as the economy so your essay is quite relatable. I liked how you introduced the essay with an argument about how video games improve the human capital, however, what is the contrasting side of the argument? I feel like we should have some information from both sides. Also, great job weaving supply and demand and inflation into the piece so fluidly.
ReplyDeleteThis was a really interesting topic, one that I hadn’t thought about before in terms of the economy. Video games can teach you a lot about the economy and how it works in the real world by playing these games. The examples about how there’s mock economies within the video games was good evidence that showed your argument. The statistics were good as well. Writing about how video games help make decisions quicker and aid cognitive functioning was an interesting point as well, showing that video games are good for the economy.
ReplyDeleteWhen I saw your blog post, I immediately thought of the same Game Theory episode you linked to. Another economic topic that was talked about in the episode that you didn't mention is how not only are normal people learning about the economy by playing games like WoW, economists also have analyzing the economies of games to solve real-life economical problems. It's interesting to see how a game such as World of Warcraft, which is usually seen in a negative fashion, could one day be the key to solving the world's economic problems.
ReplyDeleteI think it is very interesting how you included evidence from an experiment done to test the effects that video games have in users. I had no idea that in games like World of Warcraft real money was used, and I agree with you in that it does help users learn about the art of buying and selling products, as well as learning to save money in order to use it later in more valuable ways. Video games are very fun and studies like the one you mentioned will make the ideas about this pastime get better and better as you can see how it helps people develop abilities that a non-player wouldn't.
ReplyDeleteI like how you talked about how you explained the graph in the post. I also liked the youtube video you posted, I can see how you could decide to write on this after seeing that video. I also like how you talked about how video games have changed over the years. You said that the price of video games usually increases around Christmas time, why do you think this happens? I think you should explain the WoW thing more, I didn't really get that.
ReplyDeleteP.S. Happy Birthday
With every generation comes violence and politicians need a scapegoat to avoid the blame of it off of them. They can help with things and improve emergency driving like in GTAV where you sometimes need to avoid crashing in a hostile environment. And games like call of duty help with fast decisions. They can also help with learning economy like in GTAV which has an active stock exchange and with online if you crash your car you will need to pay to have it fixed or replaced.
ReplyDeleteThis is a really interesting topic. I don’t play a lot of video games, and I’ve never played one that has an ‘in-game economy.’ I think it is really cool that data from these games can be analyzed and observed like in reality. Things like inflation and supply and demand in a game is an interesting twist that brings an added layer of reality to the game. The graph was fascinating in how it displayed the inflation. The only thing I would have changed is on the graph, maybe there could be a little more information for those that haven’t played the game such as how much gold being purchased is the graph showing. I think these games could be a great way to introduce people to economics in the real world and to practice analyzing and comparing economies.
ReplyDeleteI really liked the information that you showed in this blog post. The connections you made to World of Warcraft directly related to what we are learning now. I also liked how you introduced the game so people like me who haven't played World of Warcraft know what's going on. I also agree that video games shouldn't be the scapegoat of this generation. The real reason for the person's problems would be his/her own self control of playing video games.
ReplyDeleteThis is a really neat topic to think about. I usually never think about econ when I think about games, but it really makes sense. You've connected the dots better than I would have. It's really nice to see something in support of video games too; there is so much against video games usually.
ReplyDeleteIt was interesting how you connecting gaming to economics. Though I do think that gaming too much can have a negative affect on the players social life and maybe have them gain weight. Playing for a good amount of time can have a very positive affect. Such as helping hand eye coordination, creativity, and as said in the post better reaction time. All of this helping with Human Capital having a positive affect on our economy. I like how you were able to include supply and demand and Inflation as well.
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ReplyDeleteThat’s crazy that video games are being subject to supply and demand shocks and I wonder if the makers of WoW are going to do anything to try and control the inflation rates. They also are a positive influence on the actual economy and are as you said beneficial for reaction times. I don’t know how much of a psychological impact these games have on children though, it would be interesting to learn.
ReplyDeleteThat’s crazy that video games are being subject to supply and demand shocks and I wonder if the makers of WoW are going to do anything to try and control the inflation rates. They also are a positive influence on the actual economy and are as you said beneficial for reaction times. I don’t know how much of a psychological impact these games have on children though, it would be interesting to learn.
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ReplyDeleteI thought this was really interesting, and you commented on a lot of the points I make whenever anyone gets on my case about how many video games I play. Most video games actually do teach kids many different skills, whether it's how to manage money, time, or even something as simple as how to sneak around an enemy unnoticed. Many, MANY games have a built-in economy that allows kids to earn about the economy early, such as the stock market on GTA, the harvesting, shipping, and tool purchasing on Harvest Moon, and the ability to buy helpful objects and learn to budget the currency in pretty much any standard video game. In that respect, I suppose video games are actually helping our economy if they're teaching kids to be resourceful!
ReplyDeleteVideo games are a constant issue for anyone who plays them. Each and every day thousands to millions of people play and buy the games, which can help the economy in a way, because so many are bought online or through certain stores. It's interesting to find out that video games are being subjected to supply and demand, but it's also interesting to hear that the company isn't trying to help the inflation rates that are increasing constantly. I liked your paper because you connected something that you love, to the class that you are taking. It brings it to life and in a small way you put your opinion into it. I agree with you that with the art or buying and selling that it helps the people in the real world.
ReplyDeleteVideo games are a constant issue for anyone who plays them. Each and every day thousands to millions of people play and buy the games, which can help the economy in a way, because so many are bought online or through certain stores. It's interesting to find out that video games are being subjected to supply and demand, but it's also interesting to hear that the company isn't trying to help the inflation rates that are increasing constantly. I liked your paper because you connected something that you love, to the class that you are taking. It brings it to life and in a small way you put your opinion into it. I agree with you that with the art or buying and selling that it helps the people in the real world.
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ReplyDeleteThe idea of Gamers having a quicker reaction time with the same intelligence seems rather interesting. As video games grow and the supply and demand for money grows even higher, Gamers learn to utilize their quick reaction time with well made economic choices. Eventually our economy will advance if more gamers are becoming more intelligent. The fact that they are playing games that help them think faster and make economic choices is crucial to our economy. It's simple with the idea that your paper implies. The more people that play video games, the smarter our society will become.
ReplyDeleteNot only did this post cover the financial economic factors but the human ones as well. I find it interesting yet not surprising that gamers were able to make faster decisions than non-gamers, and there’s been studies that prove that video games do not make people more violent. The point made about increasing the human capital is an incredible great one and hopefully will be brought up in debates about this in the future. Games like WoW, LoL, and even the ever-popular Clash of Clans definitely have a lot of financial consequences, but gaming definitely isn’t destructive. Perhaps link this to a couple of studies about human behavioural patterns and gaming and it’ll bring even more of a backbone to this research!
ReplyDeleteI have watched some episodes of Game Theory as well, and they always bring up interesting topics like this that you normally wouldn't think about. Many people think of video games as a waste of time, but your article gives them a new perspective. I like that you included examples of different video games that help the economy. The results of the experiment were interesting to read about, and they show that video games help people, even if they don't realize it.
ReplyDeleteFirst of all, thank you for putting up a positive post for video games, because, like you said, are always the scapegoat for issues. I’ve never personally played a game with an economy that can flux due to other people but this brings up an interesting point that gaming can actually teach these people how to be smart with their money. Although they’re learning in this different way, I think that excessively game can lead people to forget that the money they’re spending in the game is the fake money whereas the incredible amount of money spent on the game itself is what they really should be watching. Not based on any information, just observation, games that have these kind of economies generally have an option where real money can be spent for the online money which leads to gamers spending a lot on digital products. All in all, those people who spend an excessive amount don’t make up the whole community, so there are people out there who are actually benefiting from this “hands on” econ lesson, but the game doesn’t teach everyone.
ReplyDeleteI don’t really know a whole lot about video games, but like everyone I’ve heard the controversy surrounding them and I think you did a nice job introducing that in the beginning before transitioning over to the way video games relate to economics. Bringing up a common view on the role of video games drew me in because the idea was something I had heard about before. I had no idea that WoW had “real world” issues like inflation, so I was surprised at all of the stats that you pulled referencing this. I never really thought about video games being this layered or relatable to the real world, and I think you make a great point that what people learn here will translate to what they know about real economics.
ReplyDeleteIt's interesting for some people to see the other side of video games. The side that really forces out creativity and thought. Here is a prime example of pure economics in video games and how real people react to these real changes.Although they are not perfect models, they could be used to see what can be done in our own economy providing a new resource to utilize in economic growth.
ReplyDeleteGood connections with the supply/demand and inflation! The addicted gamers are always an interesting topic to go off of.
ReplyDeleteI personally learned a lot about economy from Virtonomics. This game used for official econ courses in some European countries and it has deep and complicated economy. The only good games with realistic economy which i know are: Eve Online and Virtonomics. I would love if teachers would make me play games to learn but they never do =(
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