This paper will explain some of the economic concepts found in the economies of massively multiplayer online role-playing games (MMORPG), Targeting mostly around in the game of Elder Scrolls Online (ESO). The basic core values of economics with the prices of goods set in a new world’s environment. And how a competitive market is established. Some of the examples will center on the market of plants found around the virtual world and the potions they create which make up a majority of the market.

The virtual model of the perfectly competitive market, made possible by the ESO consumers, can establish a working model on consumer behavior for economists. All commerce in ESO is done by either being part of a trade guild that has control of an open kiosk or the open source trade channel (which is only viable in a more populated zone of this virtual world). A perfectly competitive market must meet a few basic criteria, each helping to create a market with the lowest sustainable prices. There must be many sellers; so many that no one seller can have an influence on the market price. ESO has this because every player is a seller as every tradable raw material is picked up by every player to some extent. In a competitive market all goods all must be equal by quality, this way no one person has the advantage of making a monopoly on certain goods. By this the only difference in what is sold from player to player is the amount of the good which will raise or lower the price. 2

The center of this competitive market can be seen in six different plants that can be picked anywhere in this virtual world and the two potions that they create. These plants as said before can grow anywhere in the virtual world but farmers of these raw materials have determined the best places for hours spent playing to maximize production. And the values of the product created by these plants differ only to the scale of time of the buyer market. The above and below charts display the tracked value done over a seven month period of two of the better markets in ESO. These are the six flowers used to make the two potions needed by 90% of the market. The prices shown are market value of only one of these products. The few major difference in these two markets is the noticeable. The sudden increase of price in the chart below and the rapid decline seen in the past month of the chart below.

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The reasoning behind the drop in price is all in market speculation. With changes coming to the game the value of the below potion has dropped, due to its usefulness becoming almost inert. At the same time the market for the above potion has stayed static and if future market tendencies persist the price per flower will sky rocket.

The reasons for this fluctuation are due to the release of a new patch. With this patch the certain bonuses for the below chart have all but become useless. The only reason it still has a market value today is due to a 10% of the market still required to use the end product until said changes take effect. The above products have not changed because its end result is still needed by the 90% of players in the current market and still holds value in the future market if not more of a value.

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'Since perfect competition is the theoretical foundation on which any real world free
Market is based; finding an example of it could be incredibly significant’ (Kosminsky, 2009). This In short, virtual economies like those in MMORPGs are useful. They are sustainable and mirror many aspects of the real world economy. As the previous paragraph proves, virtual economies can be used to test economic theories.

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References
Elder Scrolls Online 2014, Zenimax Online studios
Kosminsky, E. (2009). Finding Adam Smith in Azeroth. In L. Cuddy, & J. Nordlinger, World of Warcraft and Philosophy (pp. 17-26). Chicago: Carus Publishing Company.