Updated: Feb 26, 2019
Maplestory has changed a lot since the last chapter was published about 7 months ago, with the entry of a new world, Jynarvis. Jynarvis perhaps would serve to prove as an extremely good analysis of the birth of an economy, where the predicted value of mesos (In-game currency) should be extremely high due to its lack of supply. As I entered the free market of Jynarvis a few minutes ago, there was nothing in the free market. Nothing. Not even in the most popular channel, channel 1.
So, what is the problem right here? On surface level, it can be seen that no one wants to sell anything, but on deeper thought, the actual problem is that, no one wants to buy anything, or perhaps, there is no one at all. If there is no effective demand, then no one would be willing to supply a commodity, simple as that. If no one wants it, no one produces it and no one sells it.
One of the major types of market failure is the inability of the free market (figuratively) to provide public goods. So, what are public goods? One definition that you will/would have learnt in economics would be that public goods are goods that are non-excludable and non-rivalrous. To my juniors who do not know what excludable and rivalrous means, you may proceed on to the next paragraph, while for those who do know, you may just skip to the next page.
Excludable goods are goods that the supplier can prevent people who have not paid for it from having access to it. An example would be Scarlion and Targa hat services, frequently purchased by level 90 maplers. If you do not pay for the service, the supplier/bosses providing the service will be nowhere near inclined to let you join his party, and loot the Scarlion hat. This good (goods can mean services as well) is thus excludable, as the supplier can prevent people who have not paid for it from having access to it. Non-excludable goods are like monster maps, you cannot prevent people from entering the maps and killing the monsters inside the maps (Consuming the monsters), even if you can clear the whole map at an extremely fast speed, a stranger cannot be denied entrance to the map to kill some monsters. This brings me on to my next point on rivalrous goods. Of course monster maps are rivalrous goods as well, the more people in the map, the less monsters you get to clear per hour, and therefore the experience (Average Benefit) you get decreases. An example of public goods, goods which are non-excludable and non-rivalrous, would be mini-dungeons in Maplestory. Mini-dungeons are non- excludable as anybody can enter a mini-dungeon as and when they like, and they are also non-rivalrous as each person is entitled a whole map to himself, and his average benefit does not decrease since any new person that wishes to enter the map, will be transferred to an entirely new map, that has the same number and type of monsters.
There have been many types of businesses going on in Maplestory that tried to make maps excludable, of which people had to pay in order to get access to the maps. An example would be the MP3 map, which has extremely good spawn rate, and extremely high average experience gain, making it an extremely popular place. By getting a high leveled person there to clear maps fast which deter people from entering the map (Due to them being able to earn much less experience), that high leveled person technically owns the map. He can thus "sell the map" to someone else for a fee, and allow that person to use the map freely without him kill-stealing the monsters, and thus making the map excludable.
Another example would be the "Holy Symbol" service that is frequently sought for in Maplestory (Shout-out to Leon's Gatoriz). Holy Symbol increases the experience gained from monsters by 1.5x per monster killed, effectively saving 1/3 of a person's time. Such a good is non-rivalrous, as you consuming the holy symbol buff, does not limit the holy symbol buff others get, as it is still the same buff. However, this good is excludable, as the bishop or phantom providing the service can choose whether or not to add you to his party. Since this good is non-rivalrous but excludable, people are thus willing to provide this service, and therefore there is a demand and supply for them. Real life examples of goods that are non-rivalrous but excludable includes private parks, cinemas, as well as satellite television.
Talking about the provision of public goods in Maplestory, it is not really because there is no effective demand for these public goods, but perhaps because it is impossible for players to provide such goods, as only the programmers can provide such goods which help the whole Maplestory population as a whole, so the lack of provision of public goods in Maplestory is not that really an issue.
Another type of market failure would be imperfect information, and this exists to serve as a form of money making for many maple merchants. Of course in the real world, you can't have perfect knowledge of all the prices, there is bound to be some time when someone ripped you off by selling you something at an extremely expensive price. Due to imperfect information, merchants can buy cheaply from noobs, and sell it at a higher price to the average man. Vice-versa, merchants can also sell an item at an expensive rate to noobs, simply because they do not know the actual value. In Maplestory, there is no government intervention to reduce this imperfect information, so to save yourself from being scammed, watch the free market more often and learn more about market prices.
The next type of market failure I would talk about that is more relevant to Maplestory would be on externalities. Externalities are a consequence of an economic activity that is experienced by unrelated third parties and can be either positive or negative. In real life context, one frequently used example in exams would be that smoking has many negative externalities, because the people around the smoker, who do not feel high of smoking, actually have to bear with the smoke he breathes out, and worst of all, they are not being paid to do so. On the other hand, research and development has many positive externalities, such as society progressing as a whole when one company develops a cure for cancer. Even though they might have the complete rights to the cure, the patents they have will sooner or later expire, and such a cure would be made widely available to everyone, and effectively progressing society as cancer is cured.
Let's move on to the maplestory context, hackers such as the Evan hackers back then in 2011. Evan hackers have tons of externalities, both positive and negative, and I shall be elaborating on them. Evan hackers basically are bots that are on many maps with monsters that drop highly desirable loot like Angelic Blessing Recipes, or just maps that drop lots of mesos, like wolf spiders. What these Evan hackers do would be to vacuum all the monsters in the map in front of the character, and then destroy all the monsters, followed by automatically picking up the loot. The thing is that, these Evan hackers are bots, and do not require much human supervision, and thus so many of them exist.
So, what are the externalities that these hackers bring about? Let's talk about the negative externalities first, since the common stereotype would be that hackers only destroy and make the game worse (kind of true, but not to a large extent). By occupying these high reward maps and hacking in these maps, legit maplers can be considered to be excluded from these maps, simply because they cannot kill anything or earn anything, of which it is due to the hackers just sucking everything to themselves and destroying the mobs at an extremely fast rate. These legit players are thus unable to consume these goods, and thus frustrating many legitimate players. Apart from that, dupe hackers, short form of duplicate hackers, destroy the prices of expensive goods, by simply duplicating them, and then releasing them to the economy at a cheap price in order to sell as many as possible, and in the process earn mesos out of nothing. By spoiling the market for expensive goods so severely, people who have invested in these goods of high net worth suddenly find themselves cashless, and the prices of perfect weapons will take a huge dip due to it becoming so common, just like the +40 WA Endless heart of Arias.
Moving on to positive externalities, these hackers actually serves as a bridge of income inequality, closing the rich-poor gap, and resulting in the poor and middle class being able to perfect their weapon, and improve their damage range. The poor and middle class will also be able to buy these duped goods for a cheap price, and sell them off at their actual price about a year later when the market stabilizes. Such an example can be seen from the market crash back then in December 2013 which was caused by dupe hackers. Prices for level 140 resurrection flames dropped to an amazing low of 5 million each, and the price now has increased 100 fold up to 500 million, proving to be a suitable investment for many in the past, though bearing a small amount of risk. On the other hand, the super rich would see a dip in their net worth, as the assets that they hold have dropped 100 fold in net worth, thus resulting in a lower GINI coefficient.
Maplestory would be a failed society with the poor constantly rebelling if it were to be an actual state. Income inequality is just absolutely rampant in Maplestory, with the top 10% probably being about 50,000 times richer than the bottom 10%. Income inequality is also one of the many types of market failure, and due to income inequality, demand for goods might not exactly be the actual demand people have for them. In other words, if the poor are unable to afford the goods, they do not have a demand for it (Demand means the willingness and ability to purchase goods, the poor do not have the ability). One of the key reasons of income inequality would be that the traditional way of earning mesos just does not work. If you are level 100 and hunting at the most profitable area (in terms of raw mesos) for your level the most you can get in 8 hours of non-stop hunting would probably be just 200 million mesos. This is a far cry from the hackers who earn about 10x in amount simply due to their massive numbe. Above all, those hackers are bots who do not require a human to sit there for 8 hours mashing keys on the keyboard, and constantly picking up mesos. The botters act like mesos printing machines, and this is terribly bad for the economy due to the inflation that it brings about. How this inflation is countered by virtual economies like Maplestory will be discuss in further chapters. Back to income inequality, the most profitable way for a person with no capital to earn mesos thus would not be killing monsters, but mining and selling materials (Selling fame is an unreliable option that does not bring about as much). However, a person with capital can do so many things, such as daily hunting at the root abyss for suspicious cubes, as well as killing bosses for their resurrection flames, due to their ability to purchase more powerful equipment which is necessary to kill these bosses. Mining, smithing and crafting equipment will help you earn about 50 million mesos an hour, but one suspicious cube in Izar is already worth 100m, and it only takes 3 minutes to kill one. This therefore clearly shows the huge disparity in income, and when such difference slowly builds up, needless to say it snowballs and becomes unstoppable unless a government intervenes.
To conclude this chapter, it can be said that the maplestory economy, despite being vibrant, has many flaws that need to be corrected. As of now, there has been some effort by the game-masters and creators of the game to not just reduce the externalities caused by the hackers (by removing them, literally a ban), but also to closen the gap between the rich and the poor. Both of the efforts seem quite contradictory, but the fact that botters/hackers have let to extremely insane inflation rates still stays true, and this has caused the intrinsic value of mesos to have a huge dip. What are these efforts and how do they function? This will be discussed in Chapter 10.
End of Chapter 8
Click above for Chapter 9