Second-Price Auctioning and Runescape
RuneScape is a fantasy MMORPG developed and published by Jagex, released originally in January 2001. It is a game where players play as their own characters and interact with other players through fighting, questing, and trading. The main economy is funded through a GP currency.
More specifically, the Grand Exchange is a market where players post auctions to buy and sell their items so other players can buy these items. Once the auction begins for an item, players will bid for a specific item, and drop out until one specific person will remain, who wins the item and pays the price of the last bidder who dropped out.
It is clear that that the market application was implemented with the idea of second price, sealed bid auctioning. The dominant strategy of second price auctioning, is that a bidder should only bid to the true value of what he believes the item is worth. Once that bidding price is surpassed, one should drop out, and not continue part of the election.
When we apply this principle to the Grand Exchange, theoretically, you should always check the true value of an item before you actually begin bidding for an object, as this is the dominant strategy.
For example, lets say that rune scimitar’s true value is 4500 gp. If you bid higher than this value of x. If you end up winning with this higher value, the person to drop out must have bid a price between 4500 gp and x. The payoff from this value, would be less than 0, which shows that this is not a strategy that improves your playoff. Moreover, if you bid a value less than 4500 gp, a value of y, and if 4500 gp was a winning bid, your payoff would be 0, because you ended up losing the auction, which does not improve your payoff.
However, this application does always not work in the Grand Exchange, because players are not able to know the true value of an object such as a rune scimitar. The value of items are not available on Runescape’s website. Moreover, because the price of such items are always fluctuating, players can never accurately get the price of an item. Rather, a popular practice is that players determine the true value of a item in a community poll, and post these true values daily on the Runescape website.
Source: http://services.runescape.com/m=itemdb_rs/
Source: https://en.wikipedia.org/wiki/RuneScape