This morning I had to read an article for my current economics class and I found it strikingly similar to a "policy" I recently adopted in my Minecraft server. In their article titled "Free Distribution or Cost-Sharing: Evidence from a Malaria Prevention Experiment in Keyna", researchers Jessica Cohen (Harvard University) and Pascaline Dupas (Stanford University) found that free distribution of malaria-preventing bed nets was more effective and cost-effective than charging money for them (even at a heavily subsidized price). Naturally, I was very excited because I recognized a very similar experiment to one I had tried on my Minecraft server.
Recently, I had noticed that trade had seemed to slow down on the server. For those who follow my podcast "EEKonomics" or have a basic understanding of economics, you'll know that trade is essential for wealth. My vision for the server is that we all specialize in something and trade with each other to form a more wealthy server where we can all build whatever we want to build with no fear of running out of resources. One deterrent, I've noticed, to such trade is transportation cost. The risk of losing everything in one's inventory en route to another player is too high to make trade worth it. There is, however, an item that significantly cuts transportation costs by making flight possible: the elytra. The elytra is hard to find unless you already have one, and most people actively playing on the server did not.
Here's where the similarity appears. In efforts to promote trade, I provided a large number of elytra for every player on the server. My question - the same question Cohen and Dupas explored - was should the item be free for all or a cheap price? If the elytra were sold dirt cheap, it would weed out potential consumers by guaranteeing that only those who valued the elytra at that price would purchase one. That would mean only people who value elytra would use them. One issue with this is that it would introduce a barrier, albeit small, to entry and possible deter potential consumers from claiming their wings.
If the elytra were given away, anyone could have them, regardless of whether they value them or not. However, in the event that more consumers claim their wings, we would expect to see more and more players entering our server's economy and trade would increase. Also, I just felt a little guilty profiting from a public good like that.
I chose the latter, and the elytra were given away for free as a public good. Like Cohen and Dupas, I found that this was an effective way to distribute the life-changing item because trade significantly increased on our server.
Economics can be found everywhere and you can draw connections between things you would have thought completely unrelated! Lives are being saved in Kenya because of some economic research and who knows? Maybe Cohen and Dupas spend a little free time on a Minecraft server as well testing out their next big ideas.
https://www.poverty-action.org/study/free-distribution-or-cost-sharing-evidence-malaria-prevention-experiment-kenya
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