#EconLiveProject

[monday2econlive]

Economics live: in video games

Economics is not just an abstract subject, it permeates practically every aspect of our daily lives, including the video games we play in our leisure time. Today, I'd like to dive into how a few economics concepts are reflected in my favorite games and explain them through examples.

Price Elasticity of Demand: The price elasticity of demand is the degree to which the quantity demanded changes accordingly when the price of a good changes. This concept is evident in the games Valorant and Apex, where in-game items often require a lot of money to be able to buy. I noticed that even when game studios Riot and Respawn released new sets and skins and raised the prices of in-game skins, players' enthusiasm to buy them was not affected too much, and they could still benefit in a very consistent way. This suggests that for these in-game items, player demand is relatively insensitive to price changes, they have low price elasticity. This may be due to the fact that these games have high player loyalty and brand value, that some in-game sets and skins may be unique or scarce, and that for some players owning a specific in-game item may be a social status symbol, which are reasons why players are willing to pay for their favorite in-game items even in the face of price increases.

Price elasticity: Trans-price elasticity refers to how a change in the price of one good affects the demand for another good. Take the game console market as an example, ps5 and ps4 are obvious substitutes, when sony released the new generation of ps5, people might expect the demand for ps4 to drop significantly as consumers might switch to the newer and more powerful ps5. however, the actual situation is that the sales of ps4 has not dropped drastically, and it even fought with ps5 to have a back and forth. Nine months after the launch of the new console, PS5 sales totaled 10,479,928 units, while PS4 sales totaled 9,860,208 units. This suggests that consumers in the gaming console market are not strong substitutes for the old and the new. the ps5 may have faced supply chain issues and inventory constraints during the initial release period, resulting in many consumers not being able to purchase the new console and still choosing to purchase the ps4. the ps5, as a new generation console, tends to be priced at a higher level than the ps4. for consumers with limited budgets, the ps4 may have been a more affordable option. There may be different segments of the gaming console market, where one segment of consumers prefers the latest technology, while another segment of consumers may value for money or be less sensitive to new technology. This market segmentation may lead to the co-existence of old and new consoles rather than a simple substitution relationship.

Income elasticity: Income elasticity refers to the effect of changes in consumers' income on their purchasing power. In Valorant, I observed that players with higher incomes were more likely to buy in-game skins, whereas players with less means were more cautious and often waited for discounted "night market" events to make purchases. This pattern of behavior suggests that the income elasticity of in-game items may be positive, as players' incomes increase, their in-game expenditures will also increase. As an example, a friend of mine has never had much money to live on, making it difficult to save up for skins, but when he gets some parental rewards and more money, he starts buying the skins he wants. This shows that in-game spending correlates to some extent with a player's income level. Of course, daily life are not enough, and mental satisfaction like games must not be an inferior good or a necessity. When players' incomes increase, their in-game expenditures will increase accordingly, reflecting the income elasticity of in-game items.

We find that in-game items are relatively insensitive to price changes, indicating low price elasticity; there is low cross-price elasticity between old and new consoles, they are not strong substitutes; and in-game consumption increases with players' income, indicating positive income elasticity. These observations reflect some simple characteristics of consumer behavior and demand in the gaming market.

Yikun Li

47184414

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Weijie Ou , Student ID: 10526196

Emily Zhang, Student ID: 62029581

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Jillian Flores #21902094

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[Econ Live] Annie Nguyen (76528344) & John Nguyen (71649814) Monday Discussion @2:00-2:50pm

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Shannon Halberstadt- 39245744

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Econ Live

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Mon 2:00-2:50pm

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Ethan Tung

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Monday 2:00 PM - 2:50 PM Discussion

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Vianny Cuevas

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Monday 2:00 - 2:50pm Discussion

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Junxian He

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Anvita Chandra

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Economics of Film Photography As A Hobby

I’m sure that each of us has at least seen a picture or a video that shows the incredible zoom ability of cameras from very far away. In this day and age, where high quality cameras can cost up to $20,000 that can produce high resolution pictures, we risk overlooking a beloved tradition that once graced every household and captured many memories: film photography.

Sure, it might take more time and money, and it might not offer all the fancy features of digital cameras, but there's something special about film photography that keeps me hooked. I'm talking about that unique picture quality that you just can't find anywhere else.

You know those vintage-looking photos you see online? The ones that give off old-school vibes? There's just something about the colors and tones in those pictures that I can't get enough of, and got me into the hobby of film photography. In a world where everything's so digital and perfect, there's a certain charm in the imperfect beauty of film photography.

The process from start to finish of film photography is a tedious one. It begins with selecting a camera and film that align with your preferences and desired attributes. Personally, I lean towards Fujifilm's ISO200 35mm roll. This particular film delivers vibrant and luminous outdoor shots, while indoors, it imparts a cozy, warm tone that never fails to captivate me.

Once the roll is expended, the next step involves having the film developed and digitized, a process that incurs costs due to the specialized environment required for film development. This is where the trade-offs of film photography become visible. Opting for film means sacrificing the convenience provided by digital cameras. Each shot holds greater significance, given the limited number of exposures per roll, in contrast to the unlimited capacity of digital devices. Additionally, obtaining physical copies of the images entails additional expenses.

Despite these inconveniences, I've found that the distinct color and style of film photography can not be replicated by simple digital editing. Moreover, the immersive engagement throughout the entire process imbues each photograph with a deeply personal touch. This sense of involvement and connection is what draws me to film photography again and again.

Back when I first started the hobby, I could easily find a camera in good condition for as little as $50, and a roll of 35mm film typically set me back around $5 per roll. However, as manufacturers increasingly prioritize the development of digital cameras, the availability of film cameras and film rolls has steadily declined. While the demand for these items has remained relatively constant since I first began, the decreased supply has resulted in increased prices and a reduction in quantity, as depicted in the graph below.

Film rolls are undeniably crucial to film photography, and the market is largely dominated by an oligopoly consisting of Fuji and Kodak. These two industry giants, Kodak and Fuji film, have long been standout choices among photographers, often flying off the shelves due to their popularity. However, as the world modernizes, both companies are compelled to diversify into other sectors such as movies, media, and printing to ensure their continued survival. This shift in focus means that their attention to their film photography section has dwindled. Consequently, the average price of a roll of ISO200 35mm film, typically ranging from $5 to $9, has seen an increase of about 10-14% to $7-$11 compared to when I first started purchasing them. This price hike inevitably leads to a decrease in the quantity of rolls I can afford to purchase, as I'll explain more later on.

To fully use the films you've purchased to the best of their ability, finding a camera with specifications that align with your preferences is important. However, the camera market largely consists of second-hand options, as it's no longer economically feasible for manufacturers to produce new film camera models. Most households now opt for the convenience of digital cameras, leading to a decline in demand for film cameras. When browsing the market, you'll encounter a range of models priced between $80 and $300, depending on the manufacturer and their condition. Cameras produced by reputable companies like Minolta, Fujifilm, and Olympus typically fetch higher resale prices, especially if they're well-maintained or unused. For those looking to dip their toes into the hobby, there are more affordable options available, often priced around $100. However, I expect that camera prices may continue to rise in the future. This is because film photography is experiencing a modest resurgence, driving up demand while the supply of available cameras dwindles.

As the availability of camera gear decreases and prices rise, I find myself adjusting my budget, impacting both the quantity and quality of film and cameras I can afford. This trend is reflected in the graph below, illustrating what economists refer to as the "income effect". Previously, I was able to comfortably purchase 2–3 rolls of film per month without issue. However, with the recent price hikes, although my income hasn't seen significant changes, the increased cost of film rolls has exceeded my expectations which lead to me finding myself being able to purchase only 1–2 rolls per month on average.

(Before I can buy an average of 2 rolls for $9, now with the increased price, I can only buy 1)

In conclusion, with the ongoing development of the world, the film photography industry is increasingly at risk of being forgotten. According to the law of demand, this trend could lead to rising prices for the equipment needed to pursue this hobby, as companies prioritize other revenue-generating areas of their business. However, from what I can see recently on social media, there is hope as film photography gains traction among the younger generation as a hobby. With this increasing demand, there is potential for manufacturers to respond by boosting their supply, thereby allowing enthusiasts like myself to continue enjoying this hobby at a reasonable cost.

Vinh Lam

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Monday 2 pm - 2:50 pm

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Tommy Chau

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Julianna Ryder (ID: 27025043) Econ Live Project

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ECON LIVE: OC

https://docs.google.com/presentation/d/1abYzZXo3lvTjaTVX8f_Wo2QXllIliPwrU1v0BfI0AI8/edit?usp=sharing

Austin Buchner

ID: 76326480

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Econ Live: Consumer surplus “The 2$ Boba” Story

Phuong Tran