Are secondary markets beneficial for a virtual world operator?

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dc.contributor Aalto-yliopisto fi
dc.contributor Aalto University en Joas, Eino 2017-06-15T07:44:05Z 2017-06-15T07:44:05Z 2016
dc.description.abstract Selling virtual goods for real money has become the dominant business model for virtual worlds in the past decade. As the amount of money involved in virtual goods sales increases, market performance questions gain relevance. In this thesis, we examine the effects of secondary markets on the profitability of a virtual world service provider operating under a virtual goods sales model. More specifically, we ask whether the service provider should tolerate secondary markets or seek to kill them off. The structure of this thesis is as follows: we first review how virtual worlds operate as businesses and provide an analysis of the market conditions faced by a virtual world operator to provide sufficient context for the reader. We then examine the inner workings of virtual economies and review structures commonly encountered within them. Next, we conduct a literature review on real world secondary market models and analyses. Finally, we evaluate the implications of real world secondary market results on secondary markets for virtual goods. In the final section, we present conclusions and possible avenues for further study. We find that recent durable goods research suggests that a profit-maximizing monopolist will not shut down secondary markets, but will choose to reduce durability of goods instead and that these results can apply to virtual worlds as well. However, we also show that the question of allowing or not allowing secondary markets cannot be answered based on profitability alone and that service providers have to also account for externalities brought on by secondary markets. en
dc.format.extent 62
dc.format.mimetype application/pdf en
dc.language.iso en en
dc.title Are secondary markets beneficial for a virtual world operator? en
dc.type G2 Pro gradu, diplomityö fi Kauppakorkeakoulu fi School of Business en
dc.contributor.department Taloustieteen laitos fi
dc.contributor.department Department of Economics en
dc.subject.keyword virtual economies
dc.subject.keyword online games
dc.subject.keyword economy design
dc.subject.keyword free-to-play
dc.subject.keyword F2P
dc.subject.keyword virtual worlds
dc.subject.keyword virtual goods
dc.subject.keyword virtual goods sales
dc.subject.keyword secondary markets
dc.subject.keyword second hand markets
dc.subject.keyword durable goods theory
dc.subject.keyword used goods
dc.subject.keyword used goods markets
dc.identifier.urn URN:NBN:fi:aalto-201801181131
dc.type.dcmitype text en
dc.programme.major Kansantaloustiede fi
dc.programme.major Economics en
dc.type.ontasot Pro gradu tutkielma fi
dc.type.ontasot Master's thesis en
dc.subject.helecon taloustieteet
dc.subject.helecon myynti
dc.subject.helecon palvelut
dc.subject.helecon internet
dc.subject.helecon virtuaalitodellisuus
dc.subject.helecon tuotteet
dc.subject.helecon markkinat
dc.subject.helecon pelit
dc.subject.helecon viihde
dc.ethesisid 14773 2016-06-08
dc.location P1 I

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