Independent technology news site and online community GeekWire has published excerpts to an interview between Gabe Newell of Valve Corp., the entity behind online game distributor behemoth Steam, and former Microsoft Games chief Ed Fries moderating for the WTIA TechNW panel.
In the Comment section of this online article can be found Dr. Newman's summary retort to some of the flawed economic principles Newell cites in Steam's online gaming economic "experiments":
http://altuseconomics.com Ross Newman
They get an A on games and and F in economics. Its not a perfectly elastic demand curve that yields constant revenues. The demand curve in this case is a rectangular hyperbola: P x Q = Constant. The elasticity of the demand curve is unitary = 1.0
View the interview excerpt between Newell and Fries with Dr. Newman's online comment here.
Source: Bishop, Todd, GeekWire, "How Valve experiments with the economics of video games". October 23, 2011. http://www.geekwire.com/2011/experiments-video-game-economics-valves-gabe-newell
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