Castronova's Notes on Hacker Court

scubacuda writes "Cal State Fullerton's Edward Castronova (who recently wrote an excellent analysis of gender inequality between male and female Everquest avatars) has just updated his notes on 'Hacker Court', a mock trial held at Vegas' Black Hat Conference on whether virtual items destroyed during the hack of an online video game constituted real loss. 'No verdict was reached, but the jury and audience agreed that the damages were real,' says Castronova."

Comments

" Virtual Becomes Real" (repost in case of /.'ing)

[Anonymous Coward]

July 30, 2003, 11:55 pm, Caesar's Palace, Las Vegas. In a mock trial convened before U.S. Circuit Court Judge Philip M. Pro, the Hacker Court's jury accepted the proposition that the virtual items destroyed during the hack of an online video game constituted real loss. The jury hung on the question of whether a certain 'Weasel' actually conspired with a certain 'Terron' to hack into a game server and destroy items, so no verdict was reached. However, the value of the potential loss of the hack was not in dispute. A subsequent poll revealed that the overwhelming majority of the 200-strong audience of computer and networking specialists (drawn from the Black Hat conference of cybersecurity professionals) agreed with the jury's opinion regarding the existence of real value in the case. Defense counsel Jennifer Granick mounted a strong counter-argument, namely that we might, as a society, decide that it is just too difficult to classify game-related damages as real, just as we shy away from taking cases of lost sexual favors to court, even though there clearly are damages. This powerful argument suggests that losses in something we agree to call a "game" should also be free from legal oversight, even though, in fact, the distinction between game and life is arbitrary. In the end, jury and audience disagreed with this cultural stratagem, preferring instead Prosecutor Richard Salgado's argument that human activity in the allegedly virtual space is not virtual at all. It is real activity and haggles real values and thus, in principle, it deserves the full attention of policy and law.

Notes

July 28, 2003

I. Virtual worlds face court test

The Black Hat Conference of cybersecurity professionals sponsors Hacker Court, an annual mock trial. This year's moot tries the case of United States v. J.B. Weasel. Weasel is alleged to have orchestrated a hack of a game server to steal items from an enemy and reset his character to level 1. If loss of items and levels exceeds $5,000 in value, the hack constitutes a felony under Title 18 Sec. 1030 of the U.S. Code. Yours truly will testify to valuation issues. Of counsel: Richard Salgado of the Department of Justice (United States) and Jennifer Granick of Stanford Law (Weasel). Presiding: Chief U. S. District Court Judge Philip M. Pro.

Time: Wednesday, July 30 2003, 4:45 PM
Place: Caesar's Palace, Las Vegas

To me, this feels like the kind of thing people may be mentioning in footnotes 100 years from now. Results will be posted here.

II. American Economic Review makes the news

Unlike its cousins Nature, Science, and the New England Journal of Medicine, the grand poobah of economics journals, the American Economic Review, rarely sees the light of day in mainstream media. In fact, I can't remember any instance of an economics journal being mentioned in public discourse. But no more! An otherwise innocent reporter for National Public Radio asked me how economists are responding to my work, and I said that the AER had been a recent rejection. Well, he went and called the editor, David Card of UC Berkeley. The resulting interview aired Saturday morning; you can listen via web if you're really that bored. Most interesting to me was the justification Professor Card gave for the rejection. From the transcript:

"It's [the virtual world] not really much different, and it has all the same problems that we have, trying to infer anything much about the behavior we see in, you know, New York."

In other words, virtual worlds are just like our world, so, there's nothing particularly interesting about them. Unless they feature nubile anime dickgirls- then they'd be of interest to one Rob "cmdr taco" Malda. On the other hand, the reasoning given in the rejection letter from AER was that virtual worlds aren't "real" so who cares. /em looks confused.

Let's have some sympathy for the system, though. After all, people like Professor Card are ask

Re:OK....so?

[Frymaster]

How about we mock the geeks that are still crying over this?

feel free. but the exercise actually has touched on an important issue: the "value" of "virtual" items.

let's look at two theories of value, shall we?

1. labour theory of value: both adam smith and karl marx agree on how to assess value (whoda thunk?) value is represented by labour. (marx's theory is here, adam smith here) the bottom line is that the value of an object is the labour that goes into making it. raw materials are "just there" and only have value because of the labour expended to extract and refine them. add up the work hours to make something and you have its value.

   now, with virtual items this is tricky. baboo the barbarian "worked" for several hundred hours to win the +12 shears of torpiary. so, to baboo, thos shears have a "value" of 100 hours. however, some programmer wrote up those shears in 2 minutes and created a dozen of them with a keystroke. so, to the authors of the game, the shears are worth 2.01 minutes of labour.

   the bottom line is: the labour value of virtual items depend on who you are. this is totally unlike "hard" items (ie, real shears). labour value theory fails us.

2. the scarcity theory of value: this is the supply and demand stuff everyone seems enamoured with these days. you know it. now, we'll ignore things like elasticity and fungibility to keep it simple.

   to baboo, there are only 12 shears in "existance". since they are highly sought after (demand) and there are very few (supply) the value of the shears is high. however, the authors of the game can create, destroy, modify and, most importantly, duplicate these shears with near-zero effort. the supply can be upped instantly. the shears can be modified to become useless, thus reducing the demand. the authors can make as many shears for themselves as they wish...

   so, once again, the value depends on who you are. totally unlike real shears. the scarcity theory breaks down with virtual things.

so. do virtual items have value? no matter how you calculate value, the answer depends on who you are. this is a major readjustment of the whole concept of value and will need to be addressed by governments and the law as the distribution and use of virtual items (not just in the gaming world, but everywhere) becomes more prevalent.

we don't need a digital millenium copyright act, we need a digital millenium value theory. of course, coming up with that will require some knowledge of economic theory and some hard thinking - so don't expect one from your politicians anytime soon.

Which Mods didn't read or check this?

[Anonymous Coward]

... Stanford Law [tubgirl.com] (Weasel). [goatse.cx]

In other words, virtual worlds are just like our world, so, there's nothing particularly interesting about them. Unless they feature nubile anime dickgirls- then they'd be of interest to one Rob "cmdr taco" Malda.

etc

Re:OK....so?

[Arker]

What you're talking about isn't new, it's called the subjective theory of value, and the austrian school of economists worked it out a long time ago.