Testing economic systems in MMOs

Discourse Society
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Economic theories and interventions should be tested. Testing them proves to be difficult, since it’s hard and ethically problematic to make controlled trials. That’s why economists so far have resorted to mathematical models, analysis of historical data, or examination of currently existing systems. With contemporary information technologies mathematical models can be simulated in great detail. Big data and big analytics allow a more detailed and comprehensive economic analysis. Finally, the internet recently enabled the creation of MMOs like World of Warcraft, Eve Online and virtual worlds such as Second Life, which are complex enough to have their own (virtual) economies. Examining the economies of these MMOs in detail could probably reveal interesting insight. However, there is an even more promising approach that could be taken: Integrating such MMOs with specific economic systems in order to test their behaviour.

The MMO as economics lab

The basic idea is simple: The MMO serves a simultaneous dual role as “regular” game and as economic simulation with real human participants. Economic experiments can be made within the MMO setting via defining and intervening into the in-game economy of the MMO. For example, different taxation schemes, virtual currencies, basic incomes, and reputation systems could be tested in an appropriate MMO. It wouldn’t be hard to collect all salient data from such a game – at least much easier than getting similar data from the “real world” economy.

Requirements for “lab MMOs”

A crucial requirement for such MMOs to be used as labs is that the developers of that game agree as testing platform for economic theories, systems, and interventions. At the same time, the user base needs to be large enough to generate statistically significant data. Both of these requirements may be mutually conflicting, since games that are set up to act as scientific experiments may not be the most fun games to play. However, it may be the case that the experimental character of these games may attract particular target audiences, or may even make such games more attracting to the general audience.

Obviously any “lab MMO” should enable economic activities within its own world. A system that allows for trade of in-game objects would be a modest basis for an in-world economy. Internal virtual currencies, or even taxation schemes would add the necessary complexity that allowed the MMO to be used for sophisticated economic questions. Additional systems like reputation systems could be used to simulate possible reputation economies.

The ideal lab MMO

Ideally, one would want to be able to compare various parameters of different economic system simultaneously by letting them compete with one another in the same MMO. It would be very enlightening, if the MMO was big enough to enable the creation of large virtual states, each with its own economic system, which competed with each other for resources, active members, and various in-game scores and achievements.

In order to test novel economic systems a futuristic, or fantastic setting would be preferable to a historical setting. A contemporary setting would also be an interesting option, if most things are the same as in our world, but some parameters are changed.

The higher the complexity of the in-game world and the closer it resembles the possibilities in our current economy, the better. Incorporated companies, stock markets, simulated (or actual) cryptocurrencies, decentralized autonomous companies, and similar entities could create a fascinating playing field – at least for those who dare to deal with that complexity in a game setting.

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This is an idea I’ve been pondering at times as well and it’s probably a good way to get an idea of how well different systems might work. However, I don’t think creating a completely new game from scratch would work well. You’d need a game with a functional economy similar to what we use currently and then introduce the experimental system and then work with the players who’re interested in trying it out. If the system starts getting users who’re able to compete with the rest of the economy, you’ll know you’re on to something there.

The problem would be persuading an existing MMO company to integrate the new system to the game. I suspect it’d be relatively expensive.

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Which current games most closely match your current requirements?

I immediately think of EVE, and, as a model of marginal cost society, Runescape’s odd inflation: where raw materials are worth many times the finished good they are turned into.

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If I was an avid player of MMOs, I would be better able to answer this question. As things stand now, I am mostly familiar with Second Life, and not so much with other MMOs. One thing that’s interesting about Second Life is that players can create complex in-game objects rather freely and sell them to other players. The fun thing is that the world virtual world is effectively made up of these in-game objects, including buildings and player’s avatars. Testing out different economic systems in Second Life would be really interesting.

However, it would be even more interesting, if players could export in-game objects out of the game, and import external objects into the game. That would create a whole new layer of dynamism. Imagine a game in which you could create 3d objects, and other people could use those 3d objects in other games or even in the real world by materializing them with 3d printers.

Anyway, I wished there was a way to create an compelling economy simulation game as MMO. One in which there is an actual economy created and driven by the players themselves, rather than by a fixed game setting. A game like that could both be very fun to play and very useful for studying (alternative) economic systems in action.

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From what I know, EVE Online is probably one of the best fits for this. While players can’t make blueprints themselves the way it’s possible in Second Life, they pretty much have to cooperate if they want to build the bigger and better stuff. It’s not available in any other way but by players making it and it’s not practically possible for a single player to do it all.

Come to think of it, EVE Online is good model for a world with scarcity while Second Life is more like a world of abundance. In EVE you don’t get things for free while Second Life is quite playable even if you don’t want to work to get stuff.

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