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Cover Quote: October 2014
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Scarcity is a central concept in economics. It means that something exists in a lesser quantity than would be required to satisfy all desire for it. … In the digital world, things seem different. Bits are not scarce: information can be duplicated indefinitely. Instead of choosing which of two music albums to buy, you can simply download both and share them with your friends. Because there is no need to choose, there is no need for economics. The dynamics of online interactions are sufficiently explained with concepts such as status and identity, which are the domain of sociology and psychology. In the digital world, a set of resources coupled with interactions is not called an economy but a community. But sometimes an anomaly arises: a digital good that is also scarce. … We use the term virtual economy to refer to an economy that is based on scarce digital resources.
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- Vili Lehdonvirta and Edward Castronova
Virtual Economies: Design and Analysis, 2014
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