Back in the day, I had my first experience with an MMORPG (Massive, multi-player, online roleplaying game).
Runescape. It was free to play (until you realized how great premium membership was), and rather easy to pick up, so this was perfect for my 10 year-old self.
Something that was fascinating to discover were the economics behind a specific item: The Party Hat.
In Runescape you could buy and sell goods and items to other players, so there was a distinct economy in the game, and one of the most expensive items of all was the Party Hat.
Party Hat came in several colors like blue, or green, and were completely useless. No boost to your combat stats for glory in battle. No increased ability to gather resources to help rake in that sweet dough. Nothing. It just looked fun. Not even that cool if you ask me, it was a mono-colored crown you equipped to your avatar.
The reason for its amazingly high price was due to the way it was introduced into the game. A one time event that lasted a few days in 2001. Now, I began playing in 2003 or so, and the price of these hats has only increased since.
Because after the event in 2001 ended. You couldn’t get any more, and they became increasingly rare as players discarded them, or quit playing the game.
Now, the creators of Runescape didn’t really want this to happen. So from then on any “one-time event” items were untradeable. Meaning, you had to be there to get it, and it was just fun to show off.
They didn’t ever change the way Party Hats worked though, so they continue to this day to be traded for sky-high prices. I am not sure how else to express how highly regarded these things are, so I will link a real-life marketplace for this in-game item. They are going for several thousand dollars…
The simple concept of scarcity created value in an otherwise completely useless item. A perfect example of the Core Driver Scarcity.
Now, back when I did my discussion on Ownership I gave something out to all my readers. It is still a scarce resource, but I can produce more so it doesn’t have the same effect.
Precious metals and how much time we have in a day are scarce. There is only so much, more can’t be created, and value is assigned in part due to these properties.
But metal and time can be used for something. Why was the Party Hat worth anything?
Maybe some readers can come up with reasons it held so much value!
Aside from an investment vehicle (it only becomes worth more as they became more rare) it was a status symbol. Perhaps I will go into the value of status symbols another time.
Co-founder of Cerebral Cellar