The Analysis of Virtual Money Demand under One-Way Exchange Mechanism

This paper explored the demand motivation of virtual money which exists in an online game or virtual community. As the virtual money can only be bought from but not sold to the game operators currently in China, the motivation for owning virtual money in China is just limited to online payment, no speculation motivation as in foreign online games which have a totally different exchange mechanism with the virtual money. A virtual money demand model is established to further analyze the affecting factors of total virtual money demand under one-way exchange mechanism in any online game, where the volume of virtual money demand depends on the number of users, the price level of the virtual items and the income of the users. Survey data from 161 respondents showed that the virtual money is used for online payment, not speculation or investment, which supports our analysis. Finally, we give some regulation advices on how to control the virtual money supply effectively at the level consistent with money demand.