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Valve Economics: the challenges of virtual economies at Valve
June 14, 2012 11:23 PM   Subscribe

“I’m the president of a videogame company (www.valvesoftware.com).” I thought to myself: Oh, not another “business proposal” from a crackpot… However, something in my head stopped my finger from pressing DEL while my eyes pondered the next line: “We are running into a bunch of problems as we scale up our virtual economies, and as we link economies together. Would you be interested in consulting with us?”
Valve has hired economist Yanis Varoufakis to work on their virtual economies. Valve Economics is Varoufakis's recently launched blog where he explains his background and how he came to work at Valve.

Here's an related discussion on, amongst other things, EVE Online's fascinating economy.
posted by Foci for Analysis (56 comments total) 32 users marked this as a favorite

 
He might be truly good at this... he appears to grasp that regular economics isn't a science, which seems fairly unusual in that field. But I'm a little worried that working in a wholly imaginary place may cause him to draw conclusions about the real world that just don't apply. Out here in meatspace, we're anchored into the hard realities of needing goods and energy to live, and in a virtual environment, there's no such anchor.

Regardless, whatever he does, it'll certainly be interesting. Maybe it'll even be useful.
posted by Malor at 11:44 PM on June 14, 2012


I know a guy who makes a little money on the side trading items in Team Fortress 2, and he told me a bit about how it works. Apparently there's sites dedicated to tracking the reputation (sort of like eBay feedback, I assume) of traders so that people have some assurance that they aren't getting ripped off.

Also, there's this one particular item, the "Earbuds", which were offered for a few days only as a one-off promotional item to users who logged onto TF2 from a Mac.

The important point is that the item isn't being given out anymore. Since the supply is fixed, it's apparently become a de facto currency for trading. Now each of those virtual earbuds that anybody could have gotten for free at one time will sell for ~$25, simply due to demand for it as a currency.
posted by jcreigh at 11:49 PM on June 14, 2012 [2 favorites]


From 2004 to 2007 Varoufakis served as economic adviser to George Papandreou [Greece]

..and now works for a video game company. Sort of says it all.
posted by stbalbach at 11:51 PM on June 14, 2012 [2 favorites]


..and now works for a video game company.

When I want dating advice, sometimes I go to those who have failed most spectacularly, rather than those who have been happily married for 20 years.
posted by poe at 11:56 PM on June 14, 2012 [12 favorites]


..and now works for a video game company. Sort of says it all.

Greece's GDP is around US$300 billion. Valve's total worth is (by best estimates) US$2-4 billion.

The sad part is that Valve probably pays better.
posted by Mister Fabulous at 11:58 PM on June 14, 2012 [1 favorite]


poe: That's not the point. The point is GREECE LOL.
posted by BiggerJ at 12:06 AM on June 15, 2012 [1 favorite]


When I want dating advice, sometimes I go to those who have failed most spectacularly, rather than those who have been happily married for 20 years.

I like going to drunk drivers for tips on racing cars. What could go wrong?
posted by Blazecock Pileon at 12:08 AM on June 15, 2012 [1 favorite]


What two virtual economies is Value thinking of linking? Team Fortress 2 and their DOTA game? Something to do with trading games on Steam?
posted by thecjm at 12:09 AM on June 15, 2012


Ugh. Value = Valve. It's late.
posted by thecjm at 12:09 AM on June 15, 2012


Greece's GDP is around US$300 billion. Valve's total worth is (by best estimates) US$2-4 billion.

I get your point but GDP is a measure over a time period so not directly comparable to total worth. Although I guess I can see the indirect comparison...
posted by EsotericAlgorithm at 1:58 AM on June 15, 2012


Valve now has an unified inventory that lets you trade across games. This means you can trade your Team Fortress 2 hats for a Steam copy of for example Max Payne 3, or you can exchange it for currency in the Spiral Knights MMO. This links not only two, but several economies together.

I would not be surprised if we see USD gift vouchers becoming trade items in the near future.
posted by ymgve at 2:11 AM on June 15, 2012 [1 favorite]


Valve now has an unified inventory that lets you trade across games. This means you can trade your Team Fortress 2 hats for a Steam copy of for example Max Payne 3, or you can exchange it for currency in the Spiral Knights MMO. This links not only two, but several economies together.

Wow, that seems hugely ambitious. I'm not surprised they need an economist!
posted by painquale at 2:39 AM on June 15, 2012


Just to clarify, you can't trade in any items to Valve. All trades happen between users, so to get a game for a hat, you first have to find someone willing to do the exchange.

Also, you can't trade the used games in your game library, but when you buy a game you have the option of placing it in your inventory. You can't play it until it's "opened", but an unopened game can be traded.
posted by ymgve at 2:58 AM on June 15, 2012 [1 favorite]


Related to this, Blizzard just launched the Real Money Auction House in both the EU and US for Diablo, where you can pay up to $250/£200 for items from the game.
posted by blaisedell at 3:02 AM on June 15, 2012


I hope he blogs about Valve's unique employee pay scheme that they mention in the Valve Employee handbook. I suspect that he'll go in and think it's nonsense, but won't complain because it'll work out in his favor. Valve has their employees rank all the other employees, and then "compensation gets adjusted to fit an employee's peer-driven evaluation. That's what we mean by "correct"---paying someone what we think they're worth (as best we can tell using the opinions of their peers)." This is supposed to reduce "bias" in wages: people get paid based on how much of impact they actually make on an end product.

The problem is that this conception of what people are "really worth" willfully ignores any sort of market existing outside of Valve.

Suppose that the average economist makes twice as much as a software programmers at Valve (this isn't remotely true, I'm just illustrating an example). All of the following can then be true: the economist will only work for Valve if you pay him twice as much as a software programmer; the economist does not add twice the value to Valve that a software programmer does; hiring the economist for twice as much as a software programmer would make for a better product and make the company money. This would prevent Valve from ever hiring an economist even though it would be to their benefit. All the other software programmers, rating employees based solely on contribution to the end product, would tacitly say in their evaluations, "Why should we pay him so much? He doesn't make the company as much as I do," ignoring the fact that Valve is competing in entirely different markets when they hire software programmers and when they hire economists.

The fact that you can get critical components on the cheap does not mean that you have to therefore get all non-critical components on the cheap as well.
posted by painquale at 3:31 AM on June 15, 2012 [4 favorites]


Suppose that the average economist....

I suspect that the type of economist who would be best for Valve would not be the type to respond solely to market incentives as a 'rational actor'. Or glibly, Valve won't be hiring 'the average economist'.
posted by knapah at 3:47 AM on June 15, 2012


Suppose that the average economist makes twice as much as a software programmers at Valve (this isn't remotely true, I'm just illustrating an example). All of the following can then be true: the economist will only work for Valve if you pay him twice as much as a software programmer; the economist does not add twice the value to Valve that a software programmer does; hiring the economist for twice as much as a software programmer would make for a better product and make the company money. This would prevent Valve from ever hiring an economist even though it would be to their benefit. All the other software programmers, rating employees based solely on contribution to the end product, would tacitly say in their evaluations, "Why should we pay him so much? He doesn't make the company as much as I do," ignoring the fact that Valve is competing in entirely different markets when they hire software programmers and when they hire economists.

I hate using mean words like 'piffle', but really... You're imagining an inequality and then imagining the consequences after imagining the processes used to reach those imaginary consequences.

So piffle is all I got.
posted by Sebmojo at 3:48 AM on June 15, 2012 [1 favorite]


The example is just illustrating that getting critical components on the cheap doesn't mean that you should pay less for non-critical components, but Valve's pay model says that you should. Do you disagree with that conclusion, or do you just object to the fact that I tried to illustrate it with that particular example?
posted by painquale at 4:00 AM on June 15, 2012


I suspect that the type of economist who would be best for Valve would not be the type to respond solely to market incentives as a 'rational actor'.

It's not a point just about economists. It's a point about how much you need to pay people in order to have them work for you. Looking at how much other companies are willing to pay them seems like it should obviously come into consideration. You should think that's true even if you don't think that people respond to incentives solely as rational actors. But Valve's compensation scheme ignores facts about what people could make elsewhere, and so ignores information about what you should pay them to get them to stay on.
posted by painquale at 4:09 AM on June 15, 2012 [1 favorite]


Blog post confuses astronomy and astrology, ugh.
posted by ryanrs at 4:18 AM on June 15, 2012 [1 favorite]


I lol at their compensation model. Talk about a lawsuit waiting to happen.
posted by Yowser at 4:22 AM on June 15, 2012


It's a point about how much you need to pay people in order to have them work for you

I don't imagine any of what you said would be a surprise to an economist as accomplished as Varoufakis.

And yet there he is, working at Valve.
posted by davey_darling at 4:23 AM on June 15, 2012 [1 favorite]


Blog post confuses astronomy and astrology, ugh.

Only in the section header. The actual text is correct:
For the first time since I switched from mathematical statistics to economics (around 1982), I saw an opportunity for scientific research on some really existing (albeit digital) economy. For let’s face it: Econometrics is a travesty! While its heavy reliance on statistics often confuses us into believing that it is a form of applied statistics, in reality it resembles computerised astrology: a form of hocus pocus that seeks to improve its image by incorporating proper science’s methods, displays and processes. Is this not too harsh a judgment on econometrics?
posted by The Michael The at 4:31 AM on June 15, 2012


And yet there he is, working at Valve.

Yeah, I bet the scheme works out for him and that he'll make out like a bandit. The criticism works in reverse too: you can overcompensate people who contribute a lot to the company if employees ignore that other economists would be willing to work for less.
posted by painquale at 4:44 AM on June 15, 2012 [1 favorite]


For two reasons I think. First, because I am Greek and Greece was the canary in the mine (whose death warned the rest of Europe of the impending ‘gas explosion’)

Who is his audience? Why did he have to explain that metaphor?
posted by 3FLryan at 5:30 AM on June 15, 2012


painquale, I'm not sure I'm fully following your line of reasoning. Does your argument rely on an assumption that Valve is largely underpaying a particular segment of their workforce (which I don't recall reading anywhere as being true) or are you bringing that up as a pure hypothetical? As for the argument that their schema doesn't account at all for what a similar person could be earning in salary elsewhere, isn't that baked into the system by the fact that if someone's compensation is lowered below a certain point, they're likely to quit and move elsewhere (whether precisely because they can now make a larger salary somewhere else or because they take their lowered-to-below-industry-average compensation as a hint that they're being encouraged to move on?) Am I missing your point?
posted by nobody at 5:33 AM on June 15, 2012


Hi, I work on supply chain management for a top 20 EVE alliance. Thousands of US dollars of in-game items pass through my hands each month.

One thing I've noticed in EVE is that CCP, the game developer, is not very good at EVE. They don't play their own game at a very high level. There are many, many EVE players that spend far more time analyzing the EVE economy than Eyjólfur Guðmundsson, CCP's in-house economist. He may have better data, but he doesn't manage a major alliance and I doubt he follows the in-game politics.

In EVE, much like in the real world, the big operators in the economy are more advanced than the regulators. As far as I can tell, CCP's management of the economy is purely reactive. They fix problems months or years after they are discovered by players. The code is fixed, the patch is deployed on the test server, and before it even hits the main game server, it is reverse-engineered and analyzed by the players. Then the race is on to exploit the changes.

If this Valve economist wants to understand the Valve economy, I think he needs to play the games. But even then, unless he really likes collecting hats, I don't think he's ever going to truly understand.
posted by ryanrs at 5:47 AM on June 15, 2012 [20 favorites]


Can you provide a citation for the pay scheme? I would bet that it isn't so much that the entirety of an employees pay is peer driven but that whatever annual raise they might be eligible for is peer driven. The valuation likely determine (or heavily influence) where in the range of 0%-5% each employee's annual pay increase is or perhaps their portion of the annual corporate incentive pool (maybe both).

Also, just because the guy was an economic adviser to Greece doesn't mean that they they listed to his advice.
posted by VTX at 5:52 AM on June 15, 2012 [2 favorites]


When I want dating advice, sometimes I go to those who have failed most spectacularly, rather than those who have been happily married for 20 years.

That's actually pretty insightful, even though insightful is clearly not at all what you intended. It's much more valuable to learn from people who have tried lots of stuff and failed, possibly even failed informatively, than it is to try to learn about successful one-off events.

Why would you go to somebody for advice about dating if they haven't been on a date in 20 years?
posted by mhoye at 6:19 AM on June 15, 2012 [2 favorites]


All it does is to discover empirical regularities lacking any causal meaning. To put it bluntly, it is impossible to avoid absurd conclusions such as “Christmas is explained by a prior increase in the demand for toys”. And when we do (avoid them), it is only by accident (or because of a good hunch), as opposed to scientific rigour.

Dr. Varoufakis, let me introduce you to any number of decent introductory texts on research methods. They have interesting and varied suggestions like "Have a theory" and "Think about the observable implications of your theory" and "Empirically assess as many observable implications of your theory as you can, not just its most obvious conclusion."
posted by ROU_Xenophobe at 6:29 AM on June 15, 2012 [1 favorite]


This makes me wonder what other hat-like items Steam is trying to monetize. Hats and collectibles are the reason I don't play TF2 any more.
posted by codacorolla at 6:32 AM on June 15, 2012


While its heavy reliance on statistics often confuses us into believing that it is a form of applied statistics, in reality it resembles computerised astrology: a form of hocus pocus that seeks to improve its image by incorporating proper science’s methods, displays and processes. Is this not too harsh a judgment on econometrics?

Social sciences (bar psychology) are actually all similar to astronomy in that neither can run much in the way of controlled experiments and are mostly limited to observational data that the universe provides. Economists can't re-run the US economy of 1932 without the New Deal, people like me can't re-run a legislative session with some different set of institutions, and astronomers can't re-run stars or galaxies.
posted by ROU_Xenophobe at 6:36 AM on June 15, 2012 [1 favorite]


I don't understand hats either. In EVE, people buy my stuff because they have no better choice. I exploit geographic isolation and wartime urgency to squeeze every possible dollar out of my customers. In an ideal situation, my customers are angry at the conclusion of the transaction.

I'm not sure I can work with a pure vanity item.
posted by ryanrs at 6:42 AM on June 15, 2012 [3 favorites]


Can you provide a citation for the pay scheme?

It's The Valve Handbook, with the peer review process starting on page 25 (22 in Scribd). It appears to be primarily for raises and bonuses (which, given Valve's profitability, are likely pretty large).

The rest of it is well worth reading.
posted by ReadEvalPost at 7:20 AM on June 15, 2012


I don't understand hats either.

You really have to live in the game for it to make sense. It's a video game- you're mostly playing with 15 year olds. How do you differentiate from them? How do you carry whatever clout you've gained in the outside world into the virtual such that people 'recognize' you for it? Just another Rolex to buy

That said, keep buying STAMPS, my liquor closet is dwindling
posted by MangyCarface at 7:21 AM on June 15, 2012


you're mostly playing with 15 year olds. How do you differentiate from them?

I don't call everyone a faggot.
posted by ryanrs at 7:26 AM on June 15, 2012 [7 favorites]


Can you provide a citation for the pay scheme?

See here, pages 25-35. It really is entirely driven by employee review; Valve has a unique management structure. I don't really object to the employee review scheme so much as their adjusting compensation to be commensurate with the value that an employee creates. (These two are at least conceptually distinct. They could have employees collaboratively assign pay in a way that respected market forces, and that would be fine. Or, they could have central management assign pay according to value created, and it would be just as naive.)

painquale, I'm not sure I'm fully following your line of reasoning... As for the argument that their schema doesn't account at all for what a similar person could be earning in salary elsewhere, isn't that baked into the system by the fact that if someone's compensation is lowered below a certain point, they're likely to quit and move elsewhere

Yes, that's part of my argument. With Valve's compensation scheme, they should expect people to leave them or refuse to work for them, even if it would be beneficial to everyone if they raised their pay enough so that they would come and stay.
posted by painquale at 7:32 AM on June 15, 2012 [1 favorite]


Previously (recently), the Valve Employee Handbook.
posted by snuffleupagus at 7:35 AM on June 15, 2012


(FPP link)
posted by snuffleupagus at 7:36 AM on June 15, 2012


From Page 27-28:
Valve pays people very well compared to industry norms. Our profitability per employee is higher than that of Google or Amazon or Microsoft, and we believe strongly that the right thing to do in that case is to put a maximum amount of money back into each employee’s pocket. Valve does not win if you’re paid less than the value you create. And people who work here ultimatelydon’t win if they get paid more than the value they create.
It sounds like they start everyone off at a salary at the high end of the spectrum for the position and then, over time, adjust up or down based on the peer reviews. Reading more about the process, it looks like they do a decent job making sure each employee is rated by their real peers, the people who are in a good position to understand what they contribute.
posted by VTX at 8:08 AM on June 15, 2012


the people who are in a good position to understand what they contribute.

That's my concern: people should not be paid according to what they contribute. They should be paid according to the prices that they set. If the typical software engineer makes twice what a typical writer does, then Valve should be willing to pay the engineer more, even if it's the writer who contributes more and makes the project truly shine.
posted by painquale at 9:00 AM on June 15, 2012 [1 favorite]


Yes, that's part of my argument. With Valve's compensation scheme, they should expect people to leave them or refuse to work for them, even if it would be beneficial to everyone if they raised their pay enough so that they would come and stay.

Okay, there's definitely some sort of unstated assumption here that I must be missing for your argument to make sense (or there's something I'm not understanding). If most employees are being paid above industry average, where is this sense that you'd expect the workers to quit coming from?

My guess would be that maybe you're misunderstanding Valve's pay model by reading the "paid [more/less] than the value they create" lines more literally than they're intended? Are you taking "value" here to simply mean "money" and are you reading the statements as implying that they are literally determining how much money the tasks you've performed have brought into the company as revenue (or at least, of course, the perception of such) and then in their ideal view adjusting your compensation so it literally matches that amount of money? I don't have any inside information you're not privy to, but the entire tone of the handbook suggests they are thinking of 'value' as a much vaguer substance. (But in any case, if the reading I'm possibly-mistakenly attributing to you were accurate, wouldn't that make for pretty much a guarantee of above-industry-standard wages, since the normal model would be adjusting to extract more profit from each worker?)

I guess I'm not understanding your argument still (and apologies if I'm being obtuse). It's clear you think their model shouldn't function (as far as retaining employees is concerned?), and yet their retention rate is reportedly very high. So...where is the point you're making? (Wait -- were you possibly not aware of their supposedly super-high retention rate?) It sounds like everything you're saying rests on Valve wages being mostly below industry averages, even though it doesn't seem like that's the case.
posted by nobody at 9:03 AM on June 15, 2012 [1 favorite]


That's my concern: people should not be paid according to what they contribute.

That isn't what that process determines though.

If the typical software engineer makes twice what a typical writer does, then Valve should be willing to pay the engineer more, even if it's the writer who contributes more and makes the project truly shine.

This gets determined when they are hired. Then, if the software engineer does better work that contributes to their projects more than the other software engineers, at least, in the eyes of the other software engineers, then they get a bigger raise than everyone else. I doubt it's used to give anyone a pay cut but it could be and I think it would still be fair.

If the writer does a better job of writing, as determined by the other writers (or whatever other group they determine is in a good position to know), than they'll get a bigger raise.
posted by VTX at 9:13 AM on June 15, 2012 [1 favorite]


Coming from an quasi-academic setting, Valve's process of peer review for advancement and compensation is quite familiar. It's been estabished practice in my organization for certain classes of employees since the mid-nineties. The review process is susceptible to the problems they identify: bias, friends helping friends, misaligned assessment criteria.

However, for all that, it's still regarded as one of the most fair and equitable ways of career advancement within my employer. All the suggestions I've seen involve adjusting it at the margins rather than making any fundamental changes to the system. Indeed it's viewed as necessary to recruit and retain "highly qualified individuals" (code words for PhD researchers).

people should not be paid according to what they contribute. They should be paid according to the prices that they set.

I have no idea why you think this. Rates of pay for different skill sets of university degrees are not handed down from on high. The only thing that matters really is hiring competitiveness and employee retention. If they value and wish to retain highly-skilled writers, why shouldn't they?
posted by bonehead at 9:15 AM on June 15, 2012 [2 favorites]


If most employees are being paid above industry average, where is this sense that you'd expect the workers to quit coming from?

"Industry average" is a little tricky because Valve hires so many people outside of the industry. (I remember reading that the MIT Media Lab tries to never hire on two professors in the same speciality: if they don't have an architect, they'll get an architect, etc. Valve is kind of the same way; this is discussed in the employee handbook.) If Valve wants to hire an architect, how much do they pay them? I claim you need to look at how much architects normally make. The handbook would have you ignore that.

(Actually, I bet the employees probably do tacitly incorporate some knowledge about market prices when they do their evaluations. Maybe everyone knows that it's the writers who hold the company together and are the ones who contribute the most value... but they also know that software engineers are supposed to make more, so they unconsciously let this influence their evaluations into saying that engineers contribute more. Part of the reason Valve might be a successful employer is that people aren't really following the handbook model.)

Now, it could be the case that Valve is so fabulously wealthy that everyone working there gets paid way more than they would in any other job. Why not use that extra wealth to hire some new experts, then? Well, it could be that all this extra money put into salaries couldn't be better spent in any other way, because Valve is brushing against a diseconomy of scale: hiring new employees would create too many cooks and would actually make for a worse product. If both of those conditions held, then Valve would essentially be a closed system---they wouldn't need to worry about labor leaving, and wouldn't have to worry about spending capital to bring in new labor---and their current pay model would work just fine. I doubt that both of those are true, though.

Are you taking "value" here to simply mean "money" and are you reading the statements as implying that they are literally determining how much money the tasks you've performed have brought into the company as revenue

Not necessarily. I'm fine with taking "value" to be spelled out in other terms: contribution to the quality of the project, or something like that.

VTX: [Salary] gets determined when they are hired. Then, if the software engineer does better work that contributes to their projects more than the other software engineers, at least, in the eyes of the other software engineers, then they get a bigger raise than everyone else. I doubt it's used to give anyone a pay cut but it could be and I think it would still be fair.

If you're right that this is the way it works---software engineers have their own intro salary level and are evaluated in comparison to other software engineers---then I have no problem. I don't think this what they do at Valve though. It's not described this way in the handbook and seems strongly opposed to the egalitarian management structure they've got going there.

bonehead: I have no idea why you think this. Rates of pay for different skill sets of university degrees are not handed down from on high. The only thing that matters really is hiring competitiveness and employee retention. If they value and wish to retain highly-skilled writers, why shouldn't they?

I think you're agreeing with me. The prices that workers set encode information about hiring competitiveness (I never said they were handed down from on high). The Valve model is one in which hiring competitiveness does not play any factor in determining compensation. If the handbook were strictly followed, they couldn't raise wages to retain high-skilled writers if some other company offered them more, because wages are set entirely by contribution to the end product!
posted by painquale at 9:46 AM on June 15, 2012


I read "industry norms" as "what's normal for that industry." So, if they hire an architect, they'd use the industry average for architects. If they aren't going to pay the architect something comparable to what they could earn doing a "normal" architect job, it would hard to convince them to work at Valve just because it's cool.
So Valve’s goal is to get your compensation to be “correct.” We tend to be very flexible when new employees are joining the company, listening to their salary requirements and doing what we can for them. Over time, compensation gets adjusted to fit an employee’s internal peer-driven valuation. That’s what we mean by “correct”—paying someone what they’re worth (as best we can tell using the opinions of peers).

If you think your compensation isn’t right for the work you do, then you should raise [heh] the issue. At Valve, these conversations are surprisingly easy and straightforward. Adjustments to compensation usually occur within the process described here. But talking about it is always the right thing if there’s any issue. Fretting about your level of compensation without any outside information about how it got set is expensive for you and for Valve.
They sound very concerned about making sure people are paid well for the work that they do. I expect that if their system didn't work, they'd have higher turnover or they'd have switched to something else.

We probably just need to give it some time and we'll have a metfite who is also a Valve employee chime in on how well it works (or doesn't) in practice.
posted by VTX at 10:15 AM on June 15, 2012


yes, I confess, horror of horrors, that I am not a gamer

This terrifies me.
posted by DarlingBri at 10:28 AM on June 15, 2012


If they aren't going to pay the architect something comparable to what they could earn doing a "normal" architect job, it would hard to convince them to work at Valve just because it's cool.

Yeah, exactly.

We probably just need to give it some time and we'll have a metfite who is also a Valve employee chime in on how well it works (or doesn't) in practice.

That'd be nice, but I doubt we'll hear anything on that front in a public forum.
posted by painquale at 11:47 AM on June 15, 2012


This is a really bizarre and axe-grindy derail.
posted by mek at 12:03 PM on June 15, 2012 [1 favorite]


But...someone is wrong on the internet!

I kind of wish they'd do something similar for most MMO's so they can find better ways to mitigate the hyper-inflation that happens because players basically print money at will (when it drops randomly from the MOBs they kill).

They wouldn't need to hire someone with a PhD or anything but they could get one to consult with them on the problem occasionally or get some grad students access to their data to get some opinions or something.
posted by VTX at 12:10 PM on June 15, 2012


This is a really bizarre and axe-grindy derail.

It's about economic thought at Valve and it's about how Valve hires and retains professionals who don't typically work in the video game industry. And I wasn't trying to grind axes; there was a back-and-forth discussion. Not every side discussion you dislike is an axe-grindy derail. Calling a discussion an axe-grindy derail, on the other hand....

I kind of wish they'd do something similar for most MMO's so they can find better ways to mitigate the hyper-inflation that happens because players basically print money at will

I'm actually really surprised that I can't find any reference to Blizzard having an economist on staff. I would have bet money that they had one. WoW, obviously, but the Diablo auction house also seems like a pretty big deal.
posted by painquale at 12:28 PM on June 15, 2012 [1 favorite]


Yeah, the D3 RMAH is a really interesting ongoing phenomenon. I wonder how it'll hold up over the month, and what kind of anomalies they're already seeing. I suspect the prices will trend downwards very quickly, though sales in the 30-60 range are common and 200+ are not unheard of right now.
posted by mek at 12:37 PM on June 15, 2012


I'm looking forward to the blizzard of 1099's that are going to be coming out to Diablo 3 players who made more than $500...
posted by jenkinsEar at 12:43 PM on June 15, 2012 [1 favorite]


But...someone is wrong on the internet!

To be fair, painquale was doing "someone is wrong in the real world" (Valve) and I and others were doing "someone is wrong on the internet" (though relatively politely, I hope?)

In any case, sorry for my part in the derail!
posted by nobody at 2:30 PM on June 15, 2012


Valve has their employees rank all the other employees, and then "compensation gets adjusted to fit an employee's peer-driven evaluation. That's what we mean by "correct"---paying someone what we think they're worth (as best we can tell using the opinions of their peers)." This is supposed to reduce "bias" in wages: people get paid based on how much of impact they actually make on an end product

I hope to god this doesn't catch on in other industries. All my coworkers hate me and loathe data analysis so I'd get killed in this scenario.
posted by winna at 8:59 AM on June 16, 2012 [1 favorite]


Max Keiser interviews Yanis Varoufakis.
posted by rumbles at 12:35 PM on June 16, 2012


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