The Simulated Economy

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I must admit to having a great deal of fascination with online gaming communities. Not so much for the games themselves (though I do recommend City of Heroes to any kid who grew up reading comics) but for the extent of interaction they elicit and the depth of commitment they inspire in so many players.

Indeed, the depth of the interactions go so far as to create real-time markets for things that only exist in the games (real estate, "experience", and more). Meanwhile, within the game everything from armed combat to dog-walking to intimate encounters are being made possible. That the screen is the medium doesn't erase the fact that real people are behind the keyboard. While some might lament this as a sign of social degradation and the rotting of kid's minds, I tend to wonder if this development might be a huge new tool for social science.

During my time at the University of Chicago, I saw any number of professors get physically...well, there's no other word....excited about potential natural experiments, or at the very least legal/policy changes that -- no matter their intrinsic value -- would provide a rough approximation of the same. With the growing popularity of the Sims games, and ever more clever gaming models that allow for deeper and more nuanced interactions, could it be possible to develop economic experiments that could be carried out in these virtual worlds where real people are still making decisions?

Certainly, the people won't be as vested in their avatars as they are in themselves, but don't experiments run in computer science/econ labs with students deciding to reward/punish, pay/not pay, contribute/not-contribute etc. run afoul of the same problem? Since the subjects are able to simply walk away with the 15-30 bucks they were paid to participate, what keeps some of them from deciding to act in a certain way "just to see what happens"? Of course, those who run experiments are adept at controlling for this, and it often happens that people who volunteer for such things are basically honest people. But I would think the incentives at least more closely approximate a "real-life" situation when they deal involve a character that a person has invested a good deal of time and energy in developing. What's more, the rewards for some behavior (say, having a job to earn income vs. being on welfare) can be rewarded in "real-time" by trading on sites such as Gaming Open Market where in-game commodities (like SecondLife's "Linden Dollars") are bought and sold with actual dollars.

In a more advanced extention of this, some doctors are attempting their own version of simulacra-level testing. In terms of social experiments, we need not require the computer to be able to exactly model human responses, since himans would be controlling the actions. But randomization could indeed occur (into such things as drug trials or rehab programs) without worry about the potential effects on those who were left out.

Perhaps this is already being done and it's just my lack of knowledge of experimental econ that has kept me from seeing it. If it's not, I know if I were a researcher I'd be on the phone with one of these MMORPG companies while filling out research grant proposals.

That, and my character could have a cape. I mean, how cool is that?

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There's an econ prof at Cal State Fullerton who looks into these MMORPGs. Last I read, he was having a tough time getting anything published, but I remember seeing an article somewhere about him. It seems like a natural thing to study, but perhaps the profession is too reactionary. Here's his homepage, . Correction, he's now at Indiana.


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This page contains a single entry by published on February 11, 2005 10:06 AM.

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