Categories
Guides
Competition, monopoly, market failure and game theory.
12 entries
1600s–1790s
Shares trade in coffee houses and bourses, the first bubbles burst, and governments borrow from the public.
Rare tulip bulbs became fashionable, and people traded contracts for bulbs still in the ground, often in taverns. Prices rose steeply through the winter of 1636, then collapsed in February 1637.
Historians still debate how much damage it did, but it became the classic story of a speculative bubble.
💡 Why it made sense then
When prices keep rising, buying to resell looks easy money. It works until there's no one left to buy.
Ideas it gave us
A market bubble is when prices rise far above any reasonable measure of value because buyers expect to sell to someone else at a higher price, until confidence breaks and prices crash.
🎮 Listings can bubble: a rush of buying after news pushes a price far above where it settles once the excitement fades.
Open the full entry →In 1720 shares in Britain's South Sea Company and France's Mississippi Company rose many times over on promises of trade profits, then crashed. Isaac Newton is said to have lost heavily.
Britain's Bubble Act of 1720 restricted new joint-stock companies without a royal charter for over a century.
💡 Why it made sense then
Easy credit, new ways to buy shares and stories of fortunes drew in people who didn't know what the companies were worth.
Ideas it gave us
A market bubble is when prices rise far above any reasonable measure of value because buyers expect to sell to someone else at a higher price, until confidence breaks and prices crash.
🎮 Listings can bubble: a rush of buying after news pushes a price far above where it settles once the excitement fades.
Open the full entry →Information asymmetry is when one side of a deal knows more than the other. It can cause adverse selection, where bad products or risks drive out good ones.
🎮 The house bots use only public information: prices, moves, trade counts and vouches. They never see your trades before they happen.
Open the full entry →1770s–1920s
Thinkers explain prices, trade and competition, while the telegraph and the ticker speed markets up.
Adam Smith described a pin factory where ten workers, each doing one step, made about 48,000 pins a day, far more than they could alone. He argued that prices set by competition guide people to produce what others want.
💡 Why it made sense then
Trade and industry were growing fast, and people wanted to understand what made some nations richer than others.
Ideas it gave us
Economies of scale are the cost savings a business gets as it grows: the average cost of each unit falls as it produces more.
🎮 The game has no firms, but you can see the opposite on a curve: the more you buy at once, the higher your average price.
Open the full entry →Supply and demand is the model that explains prices: when more people want something than is available, its price rises; when more is available than people want, its price falls.
🎮 Every Journey Shares price is set by supply and demand through a bonding curve: buying raises the price and selling lowers it.
Open the full entry →Perfect competition is a market with many sellers of an identical product, free entry and exit, and full information, so no one firm can set the price. Every firm is a price taker.
🎮 The game's curves make every player a price taker: no one sets the price, and anyone can trade at the quote.
Open the full entry →French mathematician Antoine Augustin Cournot wrote the first mathematical models of monopoly and of a market shared by two producers, each choosing how much to make while guessing what the other will do.
💡 Why it made sense then
Many real markets had only a few big sellers, and their behaviour couldn't be explained by pure competition.
Ideas it gave us
An oligopoly is a market dominated by a few large firms, each of which must consider how the others will react. Airlines, wireless carriers and cloud computing are examples.
🎮 When a few large players hold most of a listing, they act like an oligopoly: each one's buying and selling moves the price for everyone. Whale alerts show when someone passes a big share.
Open the full entry →A monopoly is a market with a single seller and no close substitutes, which lets it set a higher price and sell less than a competitive market would, creating deadweight loss.
🎮 Each listing's pool is the only place to trade that person, a kind of monopoly, but its prices are set by a fixed curve, not by a seller choosing them.
Open the full entry →The Sherman Act of 1890 made it illegal to monopolize trade or conspire to restrain it. In 1911 the Supreme Court used it to break up Standard Oil into 34 companies.
💡 Why it made sense then
Giant trusts controlled oil, railways and sugar, and farmers and small businesses blamed them for high prices.
Ideas it gave us
A monopoly is a market with a single seller and no close substitutes, which lets it set a higher price and sell less than a competitive market would, creating deadweight loss.
🎮 Each listing's pool is the only place to trade that person, a kind of monopoly, but its prices are set by a fixed curve, not by a seller choosing them.
Open the full entry →In The Economics of Welfare (1920), Arthur Pigou described costs that fall on people outside a deal, such as smoke from a factory, and proposed taxing the activity by the harm it does.
💡 Why it made sense then
Industrial cities were polluted, and markets alone gave factories no reason to count the damage.
Ideas it gave us
An externality is a cost or benefit that falls on people outside a transaction. Pollution is a negative externality; vaccination, which protects others, is a positive one.
🎮 Your trades affect everyone holding the same person: a big sale lowers their value. That's a small externality.
Open the full entry →1929–1950s
The Great Depression leads to deposit insurance, securities law, margin rules and modern economic statistics.
The Securities Act of 1933 made companies publish a prospectus before selling shares to the public and held underwriters responsible for its accuracy. The Securities Exchange Act of 1934 created the Securities and Exchange Commission and gave the Federal Reserve power to limit borrowing to buy stock.
💡 Why it made sense then
In the 1920s buyers often knew far less than sellers. The laws aimed to put the facts in front of every investor and to curb the borrowing behind the crash.
Ideas it gave us
An underwriter is the investment bank that manages a new stock or bond issue, pricing it and selling it to investors in return for a fee.
🎮 The player who lists someone acts as their underwriter: they earn 1% of every buy in the listing's first week, paid by buyers on top of the price. Listings the game itself creates pay nobody.
Open the full entry →Information asymmetry is when one side of a deal knows more than the other. It can cause adverse selection, where bad products or risks drive out good ones.
🎮 The house bots use only public information: prices, moves, trade counts and vouches. They never see your trades before they happen.
Open the full entry →Buying on margin means borrowing money from your broker to buy more stock than your cash alone allows, using your investments as collateral.
🎮 The bank lends for margin buys under Reg T, with a margin call if your own stake falls below 25%.
Open the full entry →Their 1944 book treated economic choices as strategic games, where each player's best move depends on what others do.
💡 Why it made sense then
Many decisions, from pricing to war, depend on predicting a rival's response.
Ideas it gave us
Game theory is the study of strategic decisions, where each player's best choice depends on what the others do. The prisoner's dilemma is its most famous example.
🎮 Trading is a game in this sense: whether to buy depends on what you expect others to do. The weekly challenge against a bot is a head-to-head game too.
Open the full entry →1950s–1990s
Risk gets measured, options get a formula, and index funds and ETFs bring the whole market to everyone.
In 1950 John Nash proved that games have an equilibrium where no player gains by changing strategy alone. The same year, researchers at RAND devised the prisoner's dilemma.
💡 Why it made sense then
It gave a way to predict outcomes when every side is reacting to the others.
Ideas it gave us
A Nash equilibrium is a set of strategies in which no player can do better by changing their own strategy while the others keep theirs. It's the stable outcome of a game.
🎮 When no player can gain by trading a listing differently given what everyone else is doing, its price settles: a small Nash equilibrium.
Open the full entry →Game theory is the study of strategic decisions, where each player's best choice depends on what the others do. The prisoner's dilemma is its most famous example.
🎮 Trading is a game in this sense: whether to buy depends on what you expect others to do. The weekly challenge against a bot is a head-to-head game too.
Open the full entry →In 1954 Paul Samuelson defined goods whose use by one person doesn't reduce what's left for others, and showed why private markets supply too little of them.
💡 Why it made sense then
It explained why defence, lighthouses and basic research are usually paid for by taxes.
Ideas it gave us
A public good is non-excludable (you can't stop people using it) and non-rival (one person's use doesn't reduce another's), like national defence or a lighthouse. Markets underprovide them because of free riders.
🎮 This Wiki is a small public good: free for everyone, and one person reading it doesn't stop anyone else.
Open the full entry →In 1958 Francis Bator brought together externalities, public goods and monopoly as reasons a free market may not reach the best outcome.
💡 Why it made sense then
Economists needed a clear account of when markets work well and when they don't.
Ideas it gave us
Market failure is when a free market, left alone, doesn't produce the efficient outcome. Causes include externalities, public goods, monopoly power and information asymmetry.
🎮 The game's bank shows one kind: without limits, borrowers would take on too much risk because a bailout covers the bank's losses.
Open the full entry →In the mid-1960s Eugene Fama argued that competition among investors makes prices reflect available information, so beating the market consistently is very hard.
💡 Why it made sense then
Studies kept finding that professional managers rarely beat the market after costs.
Ideas it gave us
The efficient market hypothesis says stock prices already reflect all available information, so no one can consistently beat the market except by luck or by taking more risk.
🎮 Game prices react only to what players know and do, and they move on news only when players act on it. Being early to news is how players try to beat the crowd.
Open the full entry →In the 1960s, raiders could quietly buy up a company's shares and launch a surprise takeover. The Williams Act of 1968 required anyone passing a set ownership threshold to file a public disclosure with their plans; the threshold was lowered to 5% in 1970.
💡 Why it made sense then
Shareholders deserved to know when someone was building a controlling stake, before they sold to them.
🎮 In Journey Shares
Whale alerts announce when a player's holding crosses 10% of a listing's pool, and every 5 points above that.
Ideas it gave us
In the US, anyone who comes to own more than 5% of a company's voting shares must disclose it publicly, with their intentions, within days.
🎮 When any player's holding crosses 10% of a listing's pool, and each 5 points above that, it's announced publicly in whale alerts.
Open the full entry →Information asymmetry is when one side of a deal knows more than the other. It can cause adverse selection, where bad products or risks drive out good ones.
🎮 The house bots use only public information: prices, moves, trade counts and vouches. They never see your trades before they happen.
Open the full entry →Akerlof's 1970 paper showed that when sellers of used cars know more than buyers, buyers pay only an average price, good cars leave the market and quality falls.
💡 Why it made sense then
It explained why warranties, inspections and disclosure rules exist.
Ideas it gave us
Information asymmetry is when one side of a deal knows more than the other. It can cause adverse selection, where bad products or risks drive out good ones.
🎮 The house bots use only public information: prices, moves, trade counts and vouches. They never see your trades before they happen.
Open the full entry →2000–today
Trading moves online, costs fall to zero, and crises bring bailouts, quantitative easing and new rules.
Online brokers and the internet boom drew millions into trading, and many bought and sold within the same day. The Nasdaq peaked on 10 March 2000, then lost about three quarters of its value by late 2002.
In 2001 US regulators set the pattern day trader rule, requiring $25,000 in accounts that day trade often.
💡 Why it made sense then
Excitement about a real new technology ran far ahead of what the companies would earn.
Ideas it gave us
A market bubble is when prices rise far above any reasonable measure of value because buyers expect to sell to someone else at a higher price, until confidence breaks and prices crash.
🎮 Listings can bubble: a rush of buying after news pushes a price far above where it settles once the excitement fades.
Open the full entry →The market cycle is the repeating pattern of expansion, peak, contraction and recovery in prices and in the wider economy.
🎮 Listings go through their own cycles: a rush of buying when someone is in the news, a peak, a slide as holders sell, and sometimes a recovery.
Open the full entry →Day trading is buying and selling within the same day to profit from short price moves, closing every position before the market closes.
🎮 You can buy and sell as often as you like, but short-term gains are taxed at 22% versus 15% after a week, and quick round trips lose the spread and slippage.
Open the full entry →🎮 Practise with $10,000 in play money
Try it in a live 3D city with play money: trade shares in real public figures, get margin-called, pay your taxes and rob a bot or two. Free, and nothing real is at stake.
For learning only. This isn't financial advice.
