Definitition
As quoted from a wikipedia entry on Virtual Economy, "An economy will emerge in a game world with the following characteristics":
- Persistence The software maintains a record of the state of the world and the resource possessions of the players, regardless of whether or not the game is "in session" for any user.
- Scarcity Users must expend "real" resources such as time and money to obtain goods and/or services in the synthetic world.
- Specialization Availability to players of the resources must vary. For example, a participant whose character has metalsmithing skills could have the ability to make swords, while other players would have to purchase them. Because this results in comparative advantage, complex trade relationships and a division of labor result.
- Trade Users must be able to transfer goods and services to and from other users.
- Property Rights The world must record which goods and services belong to which user identity, and the code must allow that user to dispose of the good or service according to whim.
These conditions of scarcity, specialization, and comparative advantage will create an economic system with properties similar to those seen in contemporary economies. Therefore, economic theory can often be used to study these virtual worlds.
Within the virtual worlds they inhabit, synthetic economies allow in-game items to be priced according to supply and demand rather than by the developer's estimate of the item's utility. These emergent economies are considered by most players to be an asset of the game, giving an extra dimension of reality to play. In classical synthetic economies, these goods were changed only for in-game currencies.