The Economics of Video Game Economies
An interesting article, I suggest reading the whole thing;
http://www.washingtonpost.com/blogs/...f-video-games/
Quote:
Inflation can be a headache for any central banker. But it takes a certain type of economist to know what to do when a belligerent spaceship fleet attacks an interstellar trading post, causing mineral prices to surge across the galaxy.
Eyjólfur Guðmundsson is just that economist. Working for the Icelandic company CCP Games, he oversees the virtual economy of the massively multiplayer video game Eve Online. Within this world, players build their own spaceships and traverse a galaxy of 7,500 star systems. They buy and sell raw materials, creating their own fluctuating markets. They speculate on commodities. They form trade coalitions and banks.
It’s a sprawling economy, with more than 400,000 players participating in its virtual market — more people, in fact, than live in Iceland. Inflation, deflation and even recessions can occur. Which is why, from his office in Reyjkjavik, Guðmundsson leads a team of eight analysts poring over reams of data to make sure everything in Eve Online is running smoothly. His job bears more than a passing resemblance to that of Ben Bernanke, who oversees the U.S. economy from the Federal Reserve.
“For all intents and purposes, this is an economy that has activity equal to a small country in real life,” Guðmundsson says. “There’s nothing ‘virtual’ about this world.”
Nowadays, many massively multiplayer online video games have become so complex that game companies are turning to economists for help. Without oversight, the games’ economies can go badly awry — as when a gambling ban triggered a virtual bank run in the online world of Second Life in 2007, with one bank alone costing players $750,000 in real-life money.
But there’s a flip side, too. Just as video game designers are in dire need of economic advice, many academic economists are keen on studying video games. A virtual world, after all, allows economists to study concepts that rarely occur in real life, such as non-fractional-reserve banking, a popular libertarian alternative to the current banking system that cropped up in Eve Online. The data is richer. And it’s easier to run economy-wide experiments in a video game — experiments that, for obvious reasons, can’t be run on countries.
That ability to experiment on a massive scale, academics say, could revolutionize economics.
“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.”
It gives some insight into the world behind some games.
CR
Re: The Economics of Video Game Economies
Actually, this gives only some insight into the economics inside the world of EVE Online, and can never be applied to any other MMO as far as I can tell, be it WoW, STO, GW2 or anything else, for that matter. They have had these "experts" studying EVE economy for years now, as well as that special guy who is employed by CCP to do exactly and only that.
Whereas I simply adore EVE's economy, which has no rival in the gaming world (not by a long shot), the very notion of comparing EVE's economy model with real economies is simply ludicrous. In contradiction to what Guðmundsson says, yeah, there are too many important completely virtual premises that make this economy model a unique complex with only marginal ties to reality. Unlimited resources (ores in asteroid belts, modules and weapons from drops) and ability of players to introduce vast quantities of cash supply that they virtually create "out of thin air".
Re: The Economics of Video Game Economies
Quote:
Originally Posted by
Voigtkampf
Whereas I simply adore EVE's economy, which has no rival in the gaming world (not by a long shot), the very notion of comparing EVE's economy model with real economies is simply ludicrous. In contradiction to what Guðmundsson says, yeah, there are too many important completely virtual premises that make this economy model a unique complex with only marginal ties to reality. Unlimited resources (ores in asteroid belts, modules and weapons from drops) and ability of players to introduce vast quantities of cash supply that they virtually create "out of thin air".
My understanding of modern economics as it works today, is that under capitalism (constant consumption required to generate growth) it does unconsciously make the assumption of unlimited resources (erroneously). When studying economics you are first given the price model to digest. Only after that is the addendum of the "scarcity of resources" or some other pseudo-gibberish tacked on. This is an attempt to suggest that the model accounts for limited and finite nature of resources on our planet (and in our current reach in the solar system), but it is only an attempt, it does not actually account for them at all. It both understates and disregards it in one quick brush-off. While it is true that in this universe unlike a virtual world we cannot will more resources into existence, we already, via the price model and a need for endless consumption, do act as if we can and that there is no limit to them.
Also we can and do generate cash "out of thin air", what else is any bank for? Cash is virtual wealth, it is not inherently valuable, it is only valuable if we collectively accept it is. It is modelled entirely from a mental abstraction generated in our minds, not from any extrapolation of the known physical universe - it is, aside from debt, probably the only part of daily life that has the potentiality for infinity. It is perfectly possible to generate it from nothing, we have been doing so for a long time already.
I don't disagree that attempting to extrapolate too heavily from EVE into the real world has the potential for Ludic fallacy though.
