Virtual Worlds Serve As Economic Laboratories
from the economic-test-tubes dept
One problem that economists face is the gnawing fact that humans often don't act rationally, potentially undermining many basic theories. It would be nice if economic theories could be tested in a lab setting. While there is a burgeoning field of behavioral economics, tests are costly and difficult to carry out. Professor Edward Castronova has made a career studying the economics of virtual words, MMORPGS like Ultima Online and Everquest. He has made some interesting insights by looking at how players react under various economic conditions. For example, in worlds with little scarcity, people are bored. When too many players want to be a wizard (or anything else), the profitability of that profession decreases. Neither of these insights differ from what you'd expect in the real world, though therein lies the allure. Theoretically, these worlds could act as labs to test economic models, like socialism, the third way, or a flat tax scheme. As the games get more advanced, perhaps they could be used to study more complex concepts like unionization, school vouchers, and single-payer healthcare. The experience of games designers could help test for the unintended consequences of regulations, something that would be a help in public policy. While economists like to call their field a science, some of their ideas are as absurd as the geo-centric model of the universe. Having more of them do labwork, like other scientists, could go a long way in making economics less dismal.Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
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Games != Reality
Sure, there's some corellation between in-game realities and out-of-game realities, but pushing it further would definitely harm the games we love, IMHO.
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Re: Games != Reality
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Re: Games != Reality
This is no different from any real life totalitarian state, the fact that nothing has affected you in real life, is why it's separated from out-of-game realities, unless you run out of money trying to pay for server time.
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Re: Games != Reality
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Ridiculous
First, we pay for many of these MMO's and would not appreciate being "experimented" with at the sake of the experience. Second, if an economics think tank or worse, the government would come up with an MMO to test these models, it would be bloated, boring, and poorly supported.
In conclusion, congratulations to Professor Castronova for noticing that Supply and Demand works even in a virtual world but let's not overstep our bounds of "reality" here.
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Re: Ridiculous
What about climate change?? lets think about this for a moment... if we impose restrictions on carbon trading and seeing the effects of global warming on the world economy.. We can draw conclusion on what the implications are if we do nothing.. or if we act.. so we may see the differences in variables like GDP.. etc. Virtual worlds would offer the potential to observe constraints and allow economists identify solutions to various economic problems…
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One caveat
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Games = Economics
Anything that gives us a clue about behavioral economics is a start. For instance, the dynamics of guild formation/collapse is interesting in itself and not just to economists. A few anthropologists are even looking into it according to my mother (a Ph.D. in anthropology).
As for the objection that a more accurate simulation of the 'real' world need be bloated, boring, etc. it need not be the case. People play the heck out of The Sims. don't they? Well it could act as a good baseline for a nice, large sample, micro-economic simulation, especially if you got a team of econometricians who are MMORPG players (addicts) involved in creation of the game. There are more than a few out there. Just my $.02.
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Ultimate Online?
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Knowledge
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Fabulous Book
I HIGHLY recommend this book to anyone who's interested in business, economics, technology or even just the human condition.
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