Economics and MMORPG
A Slate article on that paper on EverQuest economics: Fantasy Economics – Why economists are obsessed with online role-playing games. By Robert Shapiro
I’ve read it before, but it’s nice to see a professional economist give a summary and point out some interesting tidbits. One is that, given the exchange rate between EQ platinum pieces and real dollars (derived from EBay sales of items and characters), the per capita income in EQ is about the same as in China or India.
The main thing, though, is that market economics can arise from a minimal set of rules. The caveats are that the players in EQ come from a capitalist tradition, and will want to replicate markets in the virtual world; and that the “government” in the form of Sony game designers have imposed an initial equality on all players. Markets are more free if there’s greater equality — the real world government’s market interventions tend to be designed to address particular forms of inequality. Genuine equality may then lead to the libertarian ideal of limited government.
It should be noted that some inequalities are structural to the markets themselves, e.g., the market for lemons and the implications of asymmetric information. The EQ market place is probably simple enough not to have market failure situations. Government intervention in the market can also be motivated by social policy aims, e.g., everyone should have a house of their own, hence the tax deduction on mortgage interest. In this case, it may be useful to show what kind of cost this has on the economy (so such policy decisions can be made more democratically) though that may be difficult, if not impossible.
This aside, experiments, inadvertent or not, are simplifications that allow you to derive insights on the real world.