MMOGconomics 1: Economics 101 and MMO's

A lot of individuals seem confused how MMO's and economics work. A lot of people have very odd questions that seem to be answered through basic economics. So over the course of the next three weeks I plan to go through some MMO economics and how that applies to the average MMO player. Hopefully, these three installments will open more people's eyes to the effects of economy and the cause & effect systems surrounding it. Make a note that most of these apply to any MMO and not exclusively Eve Online.

This week, we'll go over basic economic theory and how that applies and doesn't apply to MMO's.

Basic Economics
All economics is based off of the basic concept of supply and demand. The more supply that is available the less an item is worth, also the more people demand an item the more it's worth.

Image credited to www.mikeonads.com

This basic concept has one important keynote to keep a collapse of the system from occurring:

There is only a finite amount of resources.

In reality, there is always a finite amount of everything and therefore this rule will always be maintained.

MMO Economics
In MMO's, this law of economics is broken by default, because every resource would inevitably deplete leaving nothing for players. As such, other artificial methods are implemented to remove resources from the player's and the game. Usually referred to as "money sinks" and "spawn time", MMO's require these artificial methods to maintain an unbroken economy in the game itself.

MMO Resources
In every MMO, some resources are broken. Here is the list of every common MMO resource and it's status.

Construction items - Items used to build useful items and tools are commonly infinite. There will always be a place to mine or wreak/body to use a skill to remove resources that can be used to make useful equipment.

Currency - Due to missions/quests, bounties, ect. there is an infinite amount of monetary gain available.

Time - This is one of the key resources that is not infinite.

Effort - Human effort also is finite. As such, an infinite amount of ore may be available, but human effort limits the amount of usable resources.

MMO's utilize time and effort (as finite resources) and create artificial economic controls centered around these items to stimulate the worth of these items.