This article can apply to situations other than real life. Anyone creating a virtual economy may benefit from reading this and other economics articles.
For example, iminlikewithyou's virtual economy. #4 may apply here:
"The size of the market is determined by the number of participants who want to exchange money for goods and goods for money."
So iminlikewithyou's virtual market size is the number of active users, right? Well, not necessarily. If a number of active users have no incentive to bid anymore, for whatever reason, the market size goes down. If it drops below a certain critical point, then people may lose faith in the market due to lack of goods and leave the service. Of course, I feel they're doing an awesome job and I don't expect this to happen. It's just an example.
The best markets are those with the highest number of people wanting to trade.
I think that creating virtual economies inside of a product is interesting because you have to create something people want (the startup's product) and then something people want inside the product (virtual goods, which happen to be cute women and men in iminlikewithyou's case). So if creating something people want is difficult, would creating something people want squared be difficult squared?
For example, iminlikewithyou's virtual economy. #4 may apply here:
"The size of the market is determined by the number of participants who want to exchange money for goods and goods for money."
So iminlikewithyou's virtual market size is the number of active users, right? Well, not necessarily. If a number of active users have no incentive to bid anymore, for whatever reason, the market size goes down. If it drops below a certain critical point, then people may lose faith in the market due to lack of goods and leave the service. Of course, I feel they're doing an awesome job and I don't expect this to happen. It's just an example.
The best markets are those with the highest number of people wanting to trade.
I think that creating virtual economies inside of a product is interesting because you have to create something people want (the startup's product) and then something people want inside the product (virtual goods, which happen to be cute women and men in iminlikewithyou's case). So if creating something people want is difficult, would creating something people want squared be difficult squared?