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Showing posts with label wow-dungeoneering. Show all posts
Showing posts with label wow-dungeoneering. Show all posts

12 July 2011

Lemon Dungeoneers

In 1970, economist George Akerlof released a journal article about the used car market. In it, he drew the distinction between cherries (good cars) and lemons (faulty cars), and predicted how those selling cherries would be driven out of the market (and conversely how the proportion of lemons would increase).

There is often comment by World of Warcraft players how they would, at times, join a sub-par pickup group (PuG) and resultingly endure an excruciating dungeon run. The 'market' for dungeoneering 'labour' may well degenerate similarly, for the fellow dungeoneers likely do not know how skilled each other is.

The thing about asymmetric information
In the lemon market as described by Akerlof, it is asymmetric information that drives cherries out of the market. In such a market, the buyer does not know much about the quality of the seller's product so as to form a price. In the used car market example, the used car has many parts hidden away from view, so the buyer cannot completely know whether the car is free from defects. As a result, they make a best guess that the car is of 'average' quality and so will be willing to pay an 'average' price.