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The in-world economics of online games
October 1, 2012 12:28 PM   Subscribe

“Economic theory has come to a dead end — the last real breakthroughs were in the 1960s,” says Yanis Varoufakis, a Greek economist recently hired by the video-game company Valve. “But that’s not because we stopped being clever. We came up against a hard barrier. The future is going to be in experimentation and simulation — and video game communities give us a chance to do all that.”
posted by Chrysostom (25 comments total) 19 users marked this as a favorite

 
Let me get this out of the way now.
LOL HATS AMIRITE?

Now that that's done, let the real discussion begin.
posted by radwolf76 at 12:33 PM on October 1, 2012


Can I get the "Greek economist? LOL amirit" out of the way as well?

Thanks, proceed
posted by carsonb at 12:39 PM on October 1, 2012 [2 favorites]


given the semi-regular mefi posts on some shenanigans that go on in EVE online, I'm not sure how anyone could consider it a legitimate place to research/study anything, other than maybe trolling. Blizard might have a better platform for such research, but given the ever increasing add-on/expansion, rare drops, "xxx got nerfed in latest patch", well ..
posted by k5.user at 12:42 PM on October 1, 2012 [2 favorites]


It seems problematic to me to say on the one hand, "Eve Online's economy is equivalent to a small country's in real life," and on the other hand "The future is going to be in experimentation and simulation". What if Eve Online's economy burns to the ground? Does it have the same or similar real world impact as a whole small nation burning to the ground?
posted by carsonb at 12:43 PM on October 1, 2012


given the semi-regular mefi posts on some shenanigans that go on in EVE online, I'm not sure how anyone could consider it a legitimate place to research/study anything, other than maybe trolling.

The shenanigans are the things that make eve worths studying. You can get away with activity in Eve's economy that would get you murdered or thrown in prison in real life.
posted by empath at 12:45 PM on October 1, 2012 [3 favorites]


Well, participation in Eve is fully voluntary, and no food or clean water is delivered to or from it. So while the collapse might have some economic repercussions for some (relatively rich, I suspect) people, it won't have the calamitous network effects that an economic collapse in meatspace can suffer.
posted by mhoye at 12:46 PM on October 1, 2012


Isn't EVE one of Iceland's top industries now? I thought I'd read that somewhere.
posted by radwolf76 at 12:48 PM on October 1, 2012 [2 favorites]


The shenanigans are the things that make eve worths studying. You can get away with activity in Eve's economy that would get you murdered or thrown in prison in real life.

But that's exactly what makes it useless. Eve Online and other virtual worlds can never be like a real economy because the incentives can never be the same. Real economies involve decisions that literally affect life or death, decide livelihoods, mean the difference between plenty or destitution, etc. With those incentives removed, the behavior of people is going to be drastically different to the point that these virtual worlds are useless to try and learn anything about how the real economy functions.
posted by Sangermaine at 12:55 PM on October 1, 2012 [2 favorites]


and video game communities give us a chance to do all that

Anyone who has played Simcity should know what endless tax cuts and lack of investment in infrastructure results in and yet here are - 20+ years of Simcity and none the smarter.
posted by Pogo_Fuzzybutt at 12:58 PM on October 1, 2012 [7 favorites]


given the semi-regular mefi posts on some shenanigans that go on in EVE online, I'm not sure how anyone could consider it a legitimate place to research/study anything, other than maybe trolling. Blizard might have a better platform for such research, but given the ever increasing add-on/expansion, rare drops, "xxx got nerfed in latest patch", well ..

i'm still waiting for the wall street patch that will prevent shenanigans irl.
posted by srboisvert at 1:00 PM on October 1, 2012 [2 favorites]


With those incentives removed, the behavior of people is going to be drastically different to the point that these virtual worlds are useless to try and learn anything about how the real economy functions.

But maybe the behavior of people in these games would be really useful when trying to model, understand, and influence the behavior of other things that don't care about life or death or livelihoods, or plenty or destitution, such as psychopaths, politicians, and incorporated business entities.
posted by jsturgill at 1:01 PM on October 1, 2012 [1 favorite]


Interesting. I only have experience with two games with economic systems: Diablo III and Guild Wars 2. The former has runaway inflation, but the latter doesn't seem to have any at all. I wasn't aware ArenaNet had hired an economist to manage their system until reading this article. Gold sinks in GW2 seem very well tuned.
posted by Thoughtcrime at 1:15 PM on October 1, 2012


Sangermaine: "But that's exactly what makes it useless. Eve Online and other virtual worlds can never be like a real economy because the incentives can never be the same. Real economies involve decisions that literally affect life or death, decide livelihoods, mean the difference between plenty or destitution, etc."

Eh, I disagree with you there. Our service economy is based not on people deciding whether to buy food or not, but on whether to go shopping on black friday or not.
posted by rebent at 1:34 PM on October 1, 2012


Oh also,
Varoufakis, for his part, has run into a slightly different dilemma. Whenever he tries to run randomized control trials on, say, different pricing strategies for Valve, the players will rapidly catch on and spread the word on online message boards. “They very quickly suss out what we’re doing,” he says. But, he adds, Valve’s customers often enjoy reading about his experiments after the fact.
I would be very interested if someone could link to some of these so I could read about them too!
posted by rebent at 1:35 PM on October 1, 2012


Eve Online and other virtual worlds can never be like a real economy because the incentives can never be the same. Real economies involve decisions that literally affect life or death, decide livelihoods, mean the difference between plenty or destitution, etc. With those incentives removed, the behavior of people is going to be drastically different to the point that these virtual worlds are useless to try and learn anything about how the real economy functions.

Then you can study how an economy would function without those incentives, something that would be impossible in the real world.
posted by empath at 1:38 PM on October 1, 2012 [1 favorite]


With those incentives removed, the behavior of people is going to be drastically different to the point that these virtual worlds are useless to try and learn anything about how the real economy functions.

You have the wrong comparison point. Video game players are strongly motivated to do well by whatever the terms of their game are; they can invest hundreds of their hours into playing, and it can form an important role in their life. Look at the response to the death of EVE diplomat Vile Rat in the consulate incident in Libya last month -- an outpouring of real-world grief, and a six-figure fundraiser for his family. In many cases, there is an actual money-to-game transaction possible, although it is sometimes on the black or grey market. Certainly this is less motivation than people face in real life situations, but these are not low stakes for the players involved.

The appropriate comparison is to other tools of academics; most typically these are models and games. Models are mathematical abstract creations, using some basic assumptions about people that usually include rational self-interest (and the last 20 years of economics has been about exposing the flaws in that). Games are most typically played by a small number of college undergrads, and have even less real world application. The players know they are playing a game for economics research (although it is sometimes possible to disguise the true aim of the study) and the stakes are necessarily low -- between academic ethics and academic budgets, it's very difficult to play these kinds of experimental games for real stakes.

To pick a totally random example that came to the top of my head, Dan Ariely's paper on the value of free goods had three studies; a hypothetical game played purely on paper by 60 students, and two real-world games played by around 600 people total, all MIT students, for the stakes of a Hershey's Kiss and a Lindt truffle. That's better than many studies do (in part because he does behavioural economics, where the difference between real-world and hypothetical on-paper behaviour is really important). But it's not hard to think that making a resource free in EVE that represents hours of player time to mine would have much higher stakes to the participants than the choice of which mini-chocolate to get.

And it should go without saying, but the point of doing experiments at all, whether on equations or on undergrads or via a computer game, is because we only get one shot with the real world.
posted by Homeboy Trouble at 1:39 PM on October 1, 2012 [5 favorites]


Video game players are strongly motivated to do well by whatever the terms of their game are;

I think that's perhaps overly simplistic, as in many cases, such as in Eve, what constitutes 'winning' isn't very clear. Goonswarm managed to become so 'successful' because they decided to play a different game than most players were, one focused on 'griefing' instead of making money or holding territory. That they ended up becoming a huge power bloc was almost accidental. I honestly think people could make an entire academic career out of studying them.
posted by empath at 1:47 PM on October 1, 2012


I think that's perhaps overly simplistic, as in many cases, such as in Eve, what constitutes 'winning' isn't very clear. Goonswarm managed to become so 'successful' because they decided to play a different game than most players were, one focused on 'griefing' instead of making money or holding territory. That they ended up becoming a huge power bloc was almost accidental. I honestly think people could make an entire academic career out of studying them.

You raise a great point. I admit I don't know a lot about Eve other than the occasional fascinating post to the blue here. From my limited understanding, the Goons were always doing some of the work to be successful in the traditional way, in that it's presumably hard to grief when all you have is the entry-level pipsqueak spaceship.

And groups organizing themselves to achieve aims other than the most traditional ones are hardly unrelated to the real world; a lot of collusion in the past going back to the guild system has focused on keeping the wrong sort of people out of a field, rather than on expanding it or making money. The modern GOP (and a lot of historical left-wing parties elsewhere) seems to be concerned more with ideological purity than actually winning the election, which would be the stated aim. Google is a commercial entity, but they do a lot of stuff like robot cars that is not really part of their business model, at least as far as we know. I agree that the alliance behaviours in Eve would make a great research topic.

Nevertheless, most games of this sort don't feature this sort of metagame so heavily, and would be a better place to look at simpler, player-level interactions.
posted by Homeboy Trouble at 2:16 PM on October 1, 2012 [2 favorites]


You can get away with activity in Eve's economy that would get you murdered or thrown in prison in real life.

Or in control of the lobbyists that buy the entire political system...
posted by BrotherCaine at 5:48 PM on October 1, 2012


the Goons were always doing some of the work to be successful in the traditional way, in that it's presumably hard to grief when all you have is the entry-level pipsqueak spaceship.

Actually, one of their favorite tactics was to build the cheapest possible ship, do a suicide run at the victim, then respawn and do it again. It didn't do much to the victim's ship, but it caused terrible lag.
posted by LogicalDash at 5:49 PM on October 1, 2012 [1 favorite]


"I say, as long as we're getting paid to do Economics and have contributed nothing with it in 50 years, we might just as well get paid to play video games."

Beats digging ditches.
posted by Twang at 6:23 PM on October 1, 2012


I honestly think people could make an entire academic career out of studying them.

Or in control of the lobbyists that buy the entire political system...
I've been waiting for someone to notice the similarities between their general mindset and those of the various power factions that are fucking us over, the banksters and Family/Fellowship types. I wish there were some kind of name for whatever that pathology is.
posted by This, of course, alludes to you at 8:44 PM on October 1, 2012


Eve Online isn't really a libertarian simulation, since the company is controlling the currency. Absolute control.
posted by wuwei at 12:28 AM on October 2, 2012


Eve Online isn't really a libertarian simulation, since the company is controlling the currency. Absolute control.

I reckon Eve is actually a pretty decent simulation of a genuine libertarian society: after the inevitable concentration of practically all wealth and power in the hands of a few is complete, those few face the same problems of maintaining control as the state that they have replaced. To prevent the frustrations of the people finding a focus in its own institutions, the post-libertarian pseudo-state designs a fantasy economy, under its complete control, based on the exchange of things that carry purely symbolic value but that nevertheless require real labour to produce. In the absence of democratic legitimacy or a monopoly on violence (universal high-sec space would make the game unfun), the private state must find another way to obtain the consent of the governed. Fortunately, it finds that people are willing to sell themselves into virtual slavery for the chance to own these symbols, or even to gain the right to work to produce them.

That's what libertarianism is about, right?
posted by A Thousand Baited Hooks at 4:16 AM on October 2, 2012 [4 favorites]


That's one of the best comments I've ever read on metafilter.
posted by wuwei at 2:33 AM on October 4, 2012


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