Researchers peer into virtual economies to better learn about real-life ones.

CCP Games made headlines back in 2007 when it hired Eyjólfur Gudmundsson as a full-time economist for its MMO Eve Online. Valve did it again when it brought Yanis Varoufakis on-board to manage its hat-conomy last summer. To these companies, bringing another numbers nerd into the fold might have simply been a business move, but to the economics community at large, it opened doors into a whole new way of research.

Economics has always been envious of its more sexy cousin, physics. While economics has complex formulas and systematic models, it doesn’t have the same accurate data with which to test them. Numbers like GDP are a loose proxy at best and possibly misleading at worst. Yet, the virtual economy of a game provides a system brimming with numbers, statistics, and variables that can be altered. “In digital economies we have real-time data on every transaction ever effected, every price, every quantity,” says Valve’s Professor Varoufakis, “[it’s] an economist’s dream come true.”

Juha Tolvanen, a Princeton University doctoral student, is an example of a researcher doing real-world work in games. His tool of choice is Eve Online. By using data on people who buy extra insurance on their new space ships and contrasting them with those who don’t, Juha hopes to learn more about behavior than traditional auto insurance data could ever show.

With virtual economies comprising thousands (if not millions) of agents, games can be fecund testing labs. As Professor Varoufakis says, “Suppose you allow members of one community to trade their assets with members of other communities, or across games. Suddenly, exchange rates across different economies emerge and so does some sort of balance of payments. Should we fix that exchange rate across this set of economies, eurozone style? Should we worry about internal imbalances evolving within such a currency union?” These are real issues, especially in Europe, and virtual economies let researchers test theories without throwing the financial livelihoods of entire nations at risk. There’s no guarantee that the next patch won’t totally nerf your class again, though.

Source: Financial Times

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