Unconventional Market Behavior and Artificial Pricing in Steam’s Online Gaming Marketplaces

Abstract

Proposes an explanation and model for uncharacteristic market behavior of the Steam online marketplace for virtual tradeable items. The associated models correlate highly with symptoms of uncharacteristic patterns in market prices for virtual items that would otherwise obey consistent laws of supply and demand given their availability in a traditional marketplace. The associational models also correlate highly with attitudes in social interaction, particularly in regard to trustworthiness, item value competence, with the perceived social success of owning such an item. As the process of trading virtual items online through primary and secondary markets becomes increasingly interactive, this social interaction can become more volatile and deceptive. Because much trading and online interaction involves a working understand of the value of these items, successful trading requires personal interaction, shared experiences and access to resources that highlight factors that would otherwise inform a user of an item’s value. The consequence of these trends in market trades is hyper-inflation within a virtual market, artificial prices, and predatory market manipulation. The final chapter traces the roots of this online market and highlights other authors' studies about market manipulation and monopoly, then concludes with an explanation of how a smaller scale policy approach could be taken by Valve Corporation to fix the externalities of their own online market.