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Virtual economics and game theories
May. 18th, 2004 01:48 pmContinuing with the theme of computer-related posts, here's an interesting article from The Walrus about the economies and political systems of online virtual worlds like Everquest, Ultima Online and other massively multiplayer online games.
I've ranted before about how these games aren't REAL and how events that take place there are just virtual; online games do not reflect themselves into the real world. At least, that was my prior opinion. After taking a look at this article, I may have to rethink myself.
Here are a few interesting highlights:
As Castronova stared at the auction listings, he recognized with a shock what he was looking at. It was a form of currency trading. Each item had a value in virtual "platinum pieces"; when it was sold on eBay, someone was paying cold hard American cash for it. That meant the platinum piece was worth something in real currency. EverQuest's economy actually had real-world value.
He began calculating frantically. He gathered data on 616 auctions, observing how much each item sold for in U.S. dollars. When he averaged the results, he was stunned to discover that the EverQuest platinum piece was worth about one cent U.S. — higher than the Japanese yen or the Italian lira. With that information, he could figure out how fast the EverQuest economy was growing. Since players were killing monsters or skinning bunnies every day, they were, in effect, creating wealth. Crunching more numbers, Castronova found that the average player was generating 319 platinum pieces each hour he or she was in the game — the equivalent of $3.42 (U.S.) per hour. "That's higher than the minimum wage in most countries," he marvelled.
Then he performed one final analysis: The Gross National Product of EverQuest, measured by how much wealth all the players together created in a single year inside the game. It turned out to be $2,266 U.S. per capita. By World Bank rankings, that made EverQuest richer than India, Bulgaria, or China, and nearly as wealthy as Russia.
It was the seventy-seventh richest country in the world. And it didn't even exist.
The article goes on to discuss free-market economies, socialism, social dynamics in the virtual worlds, and most interestingly, the lessons these virtual worlds have to teach us in "real life". Here's another interesting quote:
"This may provide the most important lesson of all from the EverQuest experiment," he wrote in an essay. "Real equality can obviate much of a democratic government's intervention in a modern economy. . . . If EverQuest is any guide, the liberal dream of genuine equality would usher in the conservative vision of truly limited government." In other words, maybe the best way to save the real world is to make it more like EverQuest.
Go give the article a look. Interesting, thought-provoking stuff. Those who scoff at the idea of virtual worlds and economies having any relevance to the "real world" should keep in mind that economics, in general, is essentially the study of the entirely arbitrary values that people ascribe to things.
-- END OF LINE --
Currently playing: Tangerine Dream -- Oasis. This disc, one of TD's film scores, is one of their less well-known albums but nevertheless one of their best.
I've ranted before about how these games aren't REAL and how events that take place there are just virtual; online games do not reflect themselves into the real world. At least, that was my prior opinion. After taking a look at this article, I may have to rethink myself.
Here are a few interesting highlights:
As Castronova stared at the auction listings, he recognized with a shock what he was looking at. It was a form of currency trading. Each item had a value in virtual "platinum pieces"; when it was sold on eBay, someone was paying cold hard American cash for it. That meant the platinum piece was worth something in real currency. EverQuest's economy actually had real-world value.
He began calculating frantically. He gathered data on 616 auctions, observing how much each item sold for in U.S. dollars. When he averaged the results, he was stunned to discover that the EverQuest platinum piece was worth about one cent U.S. — higher than the Japanese yen or the Italian lira. With that information, he could figure out how fast the EverQuest economy was growing. Since players were killing monsters or skinning bunnies every day, they were, in effect, creating wealth. Crunching more numbers, Castronova found that the average player was generating 319 platinum pieces each hour he or she was in the game — the equivalent of $3.42 (U.S.) per hour. "That's higher than the minimum wage in most countries," he marvelled.
Then he performed one final analysis: The Gross National Product of EverQuest, measured by how much wealth all the players together created in a single year inside the game. It turned out to be $2,266 U.S. per capita. By World Bank rankings, that made EverQuest richer than India, Bulgaria, or China, and nearly as wealthy as Russia.
It was the seventy-seventh richest country in the world. And it didn't even exist.
The article goes on to discuss free-market economies, socialism, social dynamics in the virtual worlds, and most interestingly, the lessons these virtual worlds have to teach us in "real life". Here's another interesting quote:
"This may provide the most important lesson of all from the EverQuest experiment," he wrote in an essay. "Real equality can obviate much of a democratic government's intervention in a modern economy. . . . If EverQuest is any guide, the liberal dream of genuine equality would usher in the conservative vision of truly limited government." In other words, maybe the best way to save the real world is to make it more like EverQuest.
Go give the article a look. Interesting, thought-provoking stuff. Those who scoff at the idea of virtual worlds and economies having any relevance to the "real world" should keep in mind that economics, in general, is essentially the study of the entirely arbitrary values that people ascribe to things.
-- END OF LINE --
Currently playing: Tangerine Dream -- Oasis. This disc, one of TD's film scores, is one of their less well-known albums but nevertheless one of their best.