simExchange a Keynesian Beauty Contest

There&#8217-s an important difference between shares of ownership in real companies and these game shares. Shares of ownership in real companies have intrinsic value. Even for stocks that don&#8217-t pay dividends, shares of a real company represent ownership of the company&#8217-s assets. Thus, a stock&#8217-s price can&#8217-t fall too far below the company&#8217-s liquidation value because a smart trader could buyout the company and sell off its assets for more than the share price. Doing this makes money. I don&#8217-t think this property applies to the game shares since they don&#8217-t seem to be claims on anything but the ability to sell off the shares to someone else.

The simExchange seems like an excellent example of Keynes&#8217- beauty contest view of speculative markets. If there are naive traders who believe that shares have value based on actual game sales, then strategic traders will try to anticipate what naive traders will believe. Even though strategic traders know the shares have no intrinsic value (no dividends and no way to liquidate based on actual sales), they will trade to anticipate what naive traders will believe about sales. Thus, even though game shares have no intrinsic value (even in play money terms), as long as there is some level of belief that prices do correspond to sales, strategic traders will enforce this view.

I would be interested in a test of Shiau&#8217-s claim that &#8220-A stocka€™s price on the simExchange corresponds to the lifetime worldwide sales of a game, in which 1 DKP corresponds to 10,000 copies sold.&#8221- I could see this statement being basically correct if traders perceive that prices actually work this way and perceive that others perceive that prices actually work this way. Do the market makers try to enforce this connection? How do market makers on the exchange set their prices?

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