The problem with this was that only around 2000 housing plots were made available per server, and the wealthy guilds and individual players with a lot of time on their hands to accumulate the necessary in-game means, snapped them all up immediately, exactly as you would expect.
Other players were outraged. How could today’s ambitious young Hyur break into the property market when these sorts of players had it all sewn up? Could they maybe buy in the blasted hellscape of Eureka and rent-vest in the nicer, more gentrified bits of Eorzea? How does negative gearing even work in this universe?
Anyway, Square Enix heard the furious cries of their customers and did exactly what Turnbull et al would suggest: they increased supply. Over seven hundred new plots were made available per server; which were immediately bought up, exactly like the original ones. What mitigated the problem? Increasingly delicate regulation.
In the end Square Enix put limits on how many homes a player could own, and put in a waiting period for resellers to discourage profiteers from flipping properties at a premium within the game, and are still assessing whether more regulation is required. In other words, the company responsible for an online adventure game with trolls is giving more assiduous attention to housing accessibility than the government of our most populous state.
https://www.domain.com.au/news/how-a-video-game-proved-that-increasing-supply-wont-fix-the-housing-affordability-crisis-20180416-h0ymjz/
I think that 'Proof' is a fairly strong word to use here to say the least. Why wasn't the supply increased further (it's a virtual world)? What was the going price of the houses afterwards? What was the starting price? Was this like most video games where selling from NPCs is always at a fixed initial amount or did they auction it off? What's the wealth distribution in the game? How fluid is the post sale market?
ReplyDeleteThe article argues:
"Cynics could point out that on paper, that simply doesn’t work because housing is both a good and an asset, and one which is also a basic need – so the usual economics of supply and demand don’t work as they do with, say, avocados."
Well, it's not a basic need in this universe, so by this logic, we should expect it to obey the laws of supply and demand. Why doesn't it? Also, why does something being both a good and an asset prevent supply and demand from applying?
If I can point to video games that showed where increasing the supply of houses did reduce the market price for them can I declare that I have "Proved" that houses obey supply and demand?
Sorry for turning into that angry guy ranting on your posts Rhys Taylor. :(
Chris Greene Not at all. I've almost given up hope that people will ever use the word "prove" or "solve" or "baffled" correctly. This one is at least not ramming "proof" down the reader's throat and seems to at least raise an interesting possibility, but anyone thinking that an online game can in any way "prove" anything about real-world economics is delusional. So I try and take whatever interesting messages I find and mentally filter out the poor phrasing.
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