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Path of Exile Economy and Comparisons to the Real World

It is no secret at this point that economies in MMO games tend to come to its own after a while, as long as there are enough players to sustain it with supply and demand. The economy in Path of Exile is something special to behold in this field as it is even more different than that of other games due to the use of a item trading system instead of just having a central currency, and it has had even real-life economists turning their heads and observing this virtual display of social economics.

There are various economists that have been looking into in-game economies as a way to better study social economics under the proverbial microscope. Yanis Varoufakis is a Greek-Australian political economist who is well-versed in the shakes and bumps that go on in global economic phenomena, including recessions and crises. He is also a private consultant for Valve Corporation, which makes his interest in online game economies more understandable.

He has stated that the best economic models formed by entities such as the Federal Reserve, US Treasury, the International Monetary Fund, or the Organization for Economic Development aren't really worth the trouble in being put together as they presume a kind of stability and convergence towards equilibrium that is not replicated in the real world.

The behaviors exhibited in real life are also true in a digital distribution medium for games such as Steam, which Path of Exile is integrated with. However, it's a bit different inside a game as there are slightly different variables involved, but the central theme revolves around the most desirable items in the game, what can be traded with it, and how it can be traded.

With Path of Exile items, the currency is composed of crafting items that can then be used to altering and potentially improving gear, which helps with controlling inflation. While currency items can be picked up from dead enemies, and thus can be farmed, there is a worry that players will just get them by bundles, but their rarities and desirability based on their usefulness is what balances that out.

Comparing that to real-life money system, which is a lot like using gold or credits as a universal currency in a game. The only difference is that it's even easier to inject more money through the printing press, as the "Stimulus Package" had shown. But as evident in Diablo II, players in Battle.net did stop using gold altogether and started trading with runes.

It seems that in these online role-playing games, bartering with useful items is more viable, as if currency has to have a direct link to practicality. In real life though, bartering is a less viable way to trade as everyone has different needs and wants, which would make the trading of objects to be a convoluted process, which paves the way for a central currency to facilitate trade and commerce.

There is still so much to learn in-game economies, and economists of all sorts are coming up with observations, case studies, and hypothetical models to illustrate various financial phenomena that could then be to determine what could happen in the real world, despite the obvious differences. In the end, the study of economics is not merely about the numbers, but also about human behavior.

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