Dynamics of bartering in online games: social network factors and profit margin

Abstract

Here we study the interpersonal trade networks found in a Massively Multiplayer Online Role-Playing Game (MMORPG) in which players actively engage in the exchange and sale of goods and items in a hyper-realistic virtual environment. A common form of interpersonal trade is bartering, which makes determining the total value of items being traded a nontrivial matter. In this paper we introduce the concept of Standard Price (SP) of items, computed from the trade network itself and measured in a common in-game currency. Based on the standard prices of items thus determined we investigate the relation between the profitability of a trade and the structure of the social networks of trading partners. We find that the social network plays a role in the outcome of interpersonal trades. For instance, we observe that the margin of profit in a trade correlates with the social distance between trading partners, suggesting that social affinity implies shared information on the value of an item. In contrast, we find no evidence of a relationship between players’ brokerage positions and accrued profits. Our findings suggest that the bonding social capital reflects an individual’s profitability in economic networks better than the bridging social capital.