[MUD-Dev] BIZ: Ban selling of in-game items for real cash?

[Tess Lowe]

Matt Mihaly wrote:
[On disallowing secondary markets]

> I just see the logic as pretty simple. If you're the only one with
> the goods to sell, you're getting 100% of the cash from everyone
> who buys that item.

Matt, is there evidence to back up this assertion that preventing a
secondary market leads to greater profits for the developer? I dont
think the logic is so clear cut.

Bruce Boston, the economic adviser on There.com, has been quite
energetic (in comments on Terra Nova and elsewhere) in putting
forward the opposite argument that allowing (and even encouraging) a
secondary market (specifically in Therebucks) is vital to increase
liquidity, which then increases the size of the primary market. He
even ran the first private (non-employee) website buying and selling
Therebucks to other There members to facilitate this.

Likewise, as an employee of a trading company myself, it makes
intuitive sense to me that being able to exit a position in a market
by selling your stuff makes it much easier to contemplate buying in
the first place.

Personally, the knowledge that I can sell my Therebucks on certain
websites made it much easier to purchase them. Similarly, spread
betting appeals to me where gambling at a bookmaker's doesn't. By
extension, I'll be much more willing to spend $100 on a sword of
doom if I know I can sell it again when I need that $200 platemail
of shinyness (though admittedly the developer may not directly get
my cash in either case).

I would therefore like to know if there's been any research into a
comparison between the positive impact of liquidity versus the
negative impact of price undercutting, on developer profits. Would
car manufacturers make more money if there was no second-hand
market, or do the optimal rules for one market not transfer to
another? I am not an economist, maybe someone can tell me what the
current thinking is.

~Tess
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