Today I am Going to Fly

Some men are born posthumously. ~Nietzsche

WoW and the Dollar Auction

Posted by penuruloki on June 20, 2009

The Dollar Auction is a product of game theory that exposes a mechanism where people can make perfectly rational decisions that end with a wildly irrational result. The Wiki article is a better explanation, but I’ll summarize briefly.

Imagine an auction for $1 where the highest 2 bidders have to pay their bid, but only the highest bidder gets the dollar. It’s rational to start bidding when the bid is under a dollar, and appears less rational as the bid approaches $1. The catch is that once the bid reached $1, the 2nd highest bidder (99c) has to choose between losing their current bid amount, or bidding again to take a much smaller loss. So the bidding continues long after any chance of gain, as the 2 bidders left try to cut their losses.

As regards WoW, Gevlon brought it up in reference to a fishing competition, and tied it to other forms of competition in WoW such as AH sales and ladder-based pvp competition. But the recent release of the PTR patch notes for 3.2 makes for an interesting look at how it relates to WoW itself.

MMORGs are in a constant state of flux as developers continue to add new features to keep players attention, and balance new and existing elements against each other. This means a steady stream of “nerfs” and “buffs” to characters that typically have a substantial amount of time investment. This time around, some of the most significant changes revolve around the Paladin class, which has it’s own sort of strange history within the game to begin with. Some people are happy with the changes, as always, and there’s also quite a bit of grumbling about the changes in the official forums.

But the rational reality is that only 2 actions will get the attention of the developers and sway them toward more attractive changes.

1) Stop playing the class. “Reroll” something else so representation dries up and there’s quantitative evidence that the devs are on the wrong path.

2) Stop playing the game altogether. Stop paying the fee, note the reason on the form when you unsubscribe, and let the impact on the bottom line speak for itself. Play something else if necessary.

Those are the rational responses. But that’s not what people actually do. Why? Because the nerfed character is the 2nd highest bidder in the dollar auction. They already have a substantial investment that they stand to lose by choosing those options, such as time spent leveling/gearing (both options) and social connections made with others who play the game (option 2). So unless they’ve invested in some level of redundancy (leveling an alt to the cap for other reasons that can now become their “main” character, or playing 2 games at once so that leaving 1 for a while has less of an impact), the 2 rational options both represent a loss, while other choices (accepting the changes, ranting on the forums, issuing death threats to devs, etc) represent an attempt to raise their bid to cut their losses.

Ultimately, dealing with the roller coaster ride of “balance” in these games becomes a meta game unto itself. As the WOPR says, “A strange game. The only winning move is not to play.” The investment in these games is neccesarily wasted at some point, when the game ends (though it is potentially possible to “cash in” by selling accounts before the game ends and pass the end loss to the buyer).

Thus, playing a persistent world game is utimately an irrational decision to begin with, not due to the payment typically associated with the games, but by the nature of perisitence as being an investment by nature. MMORGs work then by exploiting the principles behind the dollar auction. Rational response requires an ability to write off a (sometimes substatial) investment.

No, I’m not quitting WoW. I am thinking of switching mains (I’m an altoholic by nature, so this is easily whithin my means).  I consider it a useful thought exercise though, to see the visible expression of theory (game theory in this example). I was interested in the concept of MMORGs long before I started playing WoW, all the way back to UO actually. The part I always considered irrational though, was paying the montly fee for a game you’ve already purchased. It turns out that WoW is cheap entertainment (I’d have to spend much more buying new games to get the same leisure time), but that the initially interesting part (the persistence of character) is where it becomes irrational.


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