As an example of a market that results from comparative advantage, consider the market for virtual currency. Firms in China pay workers (called gold farmers) to play the online game World of War craft (WoW). In the game, workers earn virtual currency in the form of gold coins by killing monsters. In the real world, firms pay the workers a piece rate of about $0.0125 per coin, which translates into a wage of about $0.30 per hour. The firm sells the coins to an online retailer for about $0.03 per coin, and the retailer then sells the coins to consumers for about $0.20 per coin. The consumers in this market are WoW gamers in the United States, who are willing to pay cash for game shortcuts they use the purchased coins to buy the equipment and magic spells required to battle virtual monsters and move to the next level of the game.
Let s look at this exchange in terms of opportunity cost. Suppose a gamer in the United States is roughly half as productive as a gold farmer in earning gold in the game, getting 12 coins per hour. The gamer can either spend an hour to earn 12 coins or take a shortcut by paying $0.20 per coin, or $2.40. If the gamer s opportunity cost is greater than $2.40 per hour, buying the coins is sensible. The use of gold farmers in WoW is controversial. Many gamers believe that buying gold coins rather than earning them by battling virtual monsters is unethical. In 2006, the company that runs WoW banned 50,000 WoW accounts belonging to gold farmers, and the company eventually eliminated millions of gold farmers. The decrease in the supply of virtual currency increased the price of WoW gold from $0.06 cents per coin to $0.35.