Why Virtual Property Doesn't Make Sense

from the bingo dept

I've long had trouble with the idea that "property rights" make sense in virtual worlds. After all, the entire purpose of property rights is to efficiently allocate resources in the presence of scarcity. If there's no scarcity, there's no question of efficient allocation (everyone can get as many copies as they want). However, for whatever reason, there's been a big push to create "property rights" within virtual worlds. Slashdot points us to an excellent paper that goes through the arguments for assigning property rights in virtual worlds, and even models out some scenarios based on them. In the end, it finds no compelling reason for assigning property rights in virtual worlds. Here's just a snippet, from a look at whether or not property rights make markets more efficient in a virtual world:

Extending property rights to virtual resources does not make more efficient markets for those resources. The qualified approach to virtual resource property rights provides no reductions in the search costs of a buyer since the legal rights and attributes of those resources mirror those granted by the virtual world's code-based regulations. Worse, a carte-blanche approach will increase search costs by requiring a buyer to determine where the code-based rights and attributes of a resource deviate from its legal rights and attributes.

Therefore, the efficient market justifications for virtual resource property rights can not be satisfied under either the carte-blanche or qualified approach to virtual resource property rights. The only way this justification may be satisfied is if legislatures and courts reach into the virtual worlds and mandate what specific rights and attributes virtual resources can take.

Filed Under: economics, property, virtual property, virtual worlds