Supply and Demand (Concept)

Supply and Demand

CONCEPT

Supply and Demand are the two fundamental forces that guide an economy. Many games feature these two forces in either a self-contained or player-driven fashion.

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The concept of Supply and Demand came into widespread usage and acceptance due to the writings of Adam Smith, specifically his The Wealth of Nations. Smith described the two forces as the driving factors behind any economy, necessary for its survival. In video games, Supply and Demand takes many forms. At its most basic, Supply and Demand can be used in a barter system, such as in a quest in an MMORPG when a quest giver offers to supply a reward in return for an item from the player. More complex systems of Supply and Demand involve price fluctuations. Certain games allow the player to affect either the supply or demand within a micro-economy, and thus impact the price of goods.

Player-run economies follow mostly real-world trends in regard to supply and demand. Exceptions, however, do exist. For one, the supply of money in most player-run economies is infinite. The player is generally always able to obtain money directly from the environment. On the other hand, so too is the player often required to return money to the environment for various reasons such as armor repair. Since supply is infinite, demand is largely based on parsimony in a world where all have equal access to materials.

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