Planet Money: The Curse Of The Black Lotus
We hear the world "bubble" in the Bay Area a lot. The housing bubble, the tech bubble. Dot-com bubbles. But bubbles also happen in the world of toys. Remember Beanie Babies? Pogs? Or Cabbage Patch Kids?
"Just a simple fad. Then somebody realizes they can make money selling that thing," says Robert Smith from NPR's Planet Money podcast. They recently aired an episode on the economics behind Magic: The Gathering. The game, Smith says, started out as a fad. Everyone wanted the cards. Everyone had to have them. It’s the first stage of an economic bubble. But then, people started selling them.
"Stage two of the bubble. No matter how much you pay, there is some chump who is willing to pay more," Smith adds.
Take for instance, Beanie Babies. You put your Beanie Babies up on Ebay, you make money. You start buying more, and selling more, and then...
"You know how this story ends, the way every bubble story ends. Too many Beanie Babies. The market crashed," Smith says.
But the story of Magic, the Gathering: it didn’t end. The bubble never burst, because the creators figured out a way to make sure it didn’t.
Listen to the full story from the Planet Money episode on Magic: The Gathering on the audio player above.