Interview w/Edward Castronova

scubacuda writes "/.ers interested in the recent editorial on real $ in MMORPGs might also be interested in a GrepLaw interview I just conducted with Edward Castranova (expert witness in the recent Black Hat Hacker Court) about how his work on synthetic economies affects larger law and policy issues on the Internet. Ted has some interesting thoughts, particularly how online game-based economics (Star Wars Galaxies, EverQuest, Lineage, etc.) will eventually serve as the bases for "real governments." Should mainstream economics journals take his work on gender and virtual economies seriously, Ted promises to eat his virtual hat."

Comments

In other news...

[Anonymous Coward]

"with", "slashdot" and "money" are all good words to abbreviate using symbols when you're in a hurry to submit a story. Good to know.

Wikipedia entry on synthetic economies

[scubacuda]

From Wikipedia:

Synthetic economies perform useful resource-allocation and entertainment roles within MUDs. They also interact with the Earth economy. US dollar markets for synthetic-economy goods, currency, and services may be observed at online auction sites such as Ebay (search "Ultima Online", or "DAoC" for Dark Age of Camelot) and PlayerAuctions.com (search "EQ" for EverQuest).

According to standard conceptions of economic value (see the subjective theory of value), the goods and services of synthetic economies are endowed with real value. The value of a good is determined by its users, and is measured by their willingness to give up resources to obtain it. MUD users are willing to devote both time and Earth currency to obtaining synthetic goods, making these digital assets as real as any assets on Earth.

Re:Wikipedia entry on synthetic economies

[Saeger]

The value of a good is determined by its users

In the case of a game, goods only have value if the creators made the choice to make virtual goods artificially scarce, since that's what people are used to in the real world at the present point in time.

What would be interesting is to see a game model a post-nanotech economy of abundance, where any object can be copied almost as easily and cheaply as data. What would be valuable then would be the fundamental scarcities: space, energy, time, and intelligence.

So in this game an instance of an object itself doesn't have much value (hey, like an mp3), but the entity (NPC AI or human) who is capable of providing the service of designing newer and better objects and experiences, is. I suppose the rest of the game would be territorial fights over the best gameworld realestate, and competing to create the best things.

some scenarios: 1) "Hey, 3 wenches and 50 acres of land for anyone who kidnaps the player known as 'FrankLloyWright' to do killer architecture for our glorious l33td00ds-with-big-guns Kingdom!"

2) "Damn! The chinese are stealing more than their fair share of the solar slice! Destroy 1% of their panels in the mercury orbit. Why can't we all just get along?"

3) "Those evil arabs are squatting on large hydrocarbon deposits! they're evil, and it's manifest destiny for us to take it! We'll use the hydrogen in our fuelcells, and the carbon to build yet another space elevator!"

Man, this post just didnt come out the way I wanted it to, and 3 beers doesn't count as a PUI (Posting Under the Influence). :)

--

Aw mom, I don't want to play EQ!

[Sage Gaspar]

I have mixed reactions about analyzing MMORPGs as microcosms of the real world. First thing, half of the people playing them are below the age of 25 and a significant amount below 18, and almost all are drawn from middle to upper class backgrounds. The account names given with the credit card numbers might say otherwise (how often do kids under 13 check the "I'm a kid under 13" box?), but I'm not buying it. Secondly, the MMORPG market is still one specific sector of gamers, despite their success. The pool of players behind the characters does not include a proportionate amount of elderly people, non-technophiles, and the less nerdy. Yes, there are a lot of examples to the contrary, but in general you're drawing your players from the nerdy youths of the populace. So any speculations made about society based on MMORPGs can only really be used to accurately predict how a stereotypically (and in reality) more socially inept and fiscally sound portion of the population will react in a given situation. Additionally, I would hate to see MMORPGs turned into work. They're already moving that way with account and character selling, plus the leveling treadmill already in place to hook in addicts. I can see this going in a bad direction. "Billy, your sister made $500 selling her Dark Elf Cleric on EQ2 last week! Why aren't you working as hard as she is?" "Aw, mom, I just want to go outside and play! Don't make me go on EverQuest again!"

Re:Aw mom, I don't want to play EQ!

[Dachannien]

They're not microcosms of the *entire* real world. But they are microcosms of a part of society - the part that isn't all that far removed from the readers of Slashdot. To ignore the opportunity to study a socially semi-isolated population altogether, given the proper caveats, would be silly.

Besides, the differences between the general populace and that represented in MMOGs is already known.

Re:Aw mom, I don't want to play EQ!

[Swanktastic]

I have mixed reactions about analyzing MMORPGs as microcosms of the real world.

I think you're absolutely right about this. Just about the most important discovery you could ever make about synthetic economies is that a principal that applies in the real world also applies to these possible microcosms... On the other hand, you couldn't EVER extrapolate what you learned from say SWG's economy to our real economy because there's such a statistical bias in the sample/population.

Add to this the fact that economists nailed down just about every single aspect relating to an economy as simple as those existing in MMORPG's. There are NONE of the elements that make an economy complex beyond what you learn in Econ 101. Essentially what you have is a pre-medieval market system that facilitates the exchange of goods and services. 18th Century Economists had this stuff licked.

Granted, it's a curiousity that, yes, some economic principles exhibit themselves in these online worlds, but how great could these principles really be if they didn't? I mean this kind of research is about as groundbreaking as going into an elementary school and finding that the resale value of Lunchables fluctuates based on when kids get their allowance.

None have worked

[mao che minh]

After three years of playing different MMOGs, if there is any one thing that I am certain of it is that all virtual economies are faulted by a common flaw: programs and systems have flaws that can and will be exploited, and that the artificial adjustments demanded to repair them never work, because at the very moment an artificial adjustment is required the naturalality of the economy ceases.

For an example, just look at the dismal failure that each "fix" was to Ultima Online's economy. As soon as the developers started "fixing" things, the economy ceased being a natural evolution, and instead a predictable system that the cheaters began to utilize. Anyone that did not make full use of each new exploit could not compete. Everyone left, and all UO is left with is about thirty or so thousand people engaged in an never ending cycle of beating the system. If Origin had just started booting the cheaters than they would still have a viable product.

Re:None have worked

[Uncle Ira]

That's a good point, but don't overlook the fact that real-wold economies also have flaws that can and will be exploited. Anyone that has made use of a tax loophole or laundered money is filling the role of the "cheaters" in your example.

Taking your example further, you could say that our "developers" (economists and policymakers) are making changes to the system as well as "booting" the most flagrant cheaters- that's what prison sentences are for.

Science, unfortunately, disagrees with this guy.

[Anonymous Coward]

His assertion that gender identity is a "choice" rather than an endowment is neatly contradicted by the relevant scientific disciplines. GENDER IDENTITY IS NOT A CHOICE. Gender EXPRESSION is a choice; nevertheless, you cannot "choose" if you want to feel like a man or a woman.

I am transsexual myself. I am a registered SlashDot user, but because of the widespread public prejudices and misconceptions (e.g. that we are all gay, cross-dressers, "faggots", "sinners", etc.) I am posting anonymously.

Gender identity is fixed in the brain (specifically, in the hypothalamus) prior to birth, or at some point in the very first years of life. (I'm talking maybe the first three or four, not the first twenty or thirty.) Scientists studying the brains of deceased transsexuals have found that male-to-female transsexuals possess FEMALE brain structures. Likewise, female-to-male transsexuals possess MALE brain structures. These structures are intrinsic to the makeup of the brain itself-- and cannot be altered. They were present regardless of whether or not the subject underwent any sort of transgendered therapy-- e.g. taking hormones, having a "sex change", etc. Again, these structures are fixed and unchangeable. The position of anyone who feels that gender identity (for example, in the case of transsexuals) can be "changed" (excepting through extreme brainwashing) is as untenable and scientifically bogus as those who feel that gay people can be "cured" of their sexual orientation. Incidentally, please note that sexual orientation and gender identity are different things altogether. Transexuals can be gay (or lesbian), straight, bi, or even asexual, just like anyone else. Think of sexual orientation as the "x axis" and gender identity as the "y axis". You can be at any point in that system.

The only "choice" a transsexual has is whether or not they choose to act on their inner needs and undergo "transition". Gender identity, in no cases (whether a transsexual or a "normal" person) is a choice. You can no more "choose" to be male or female inside (i.e. in your brain, where gender feelings originate) than you can "choose" to be smart, or dumb, or right-handed, or left-handed. It's something you're born with. So, yes, gender identity IS an endowment. However, it doesn't necessarily always coincide with one's genitalia.

In case you doubt me, please read the following entries from reputable scientific journals:

ARTICLE #1
ARTICLE #2

This is NOT a matter of "opinion". You cannot "feel" that atoms don't exist. You cannot "feel" that 2 + 2 makes 27.5. You likewise cannot "feel" that gender identity is a choice. It is simply not so. Science has demonstrated this quite clearly.

Re:cash in games

[Melchior_of_wg]

Variants of this has actually been tried out, with varying results. Note that you have to be *really* careful at what you are actually selling. I can give some examples and reasons why they are good/bad. The general feeling I've got after years of playing and talking about this is that a lot of consumers despite it because it goes against the reasons they play games in the first place. You generally don't want games to be influenced by RL, because, well, they are games.

Project Entropia
Real money could be converted to game money and back. Upsides: System made to prevent/lessen cheating. Game money was more important. Downsides: Bugs hit MUCH harder. Could be very costly. General feeling that the devs made the game steal your money.

Tibia
Normally free to play, but you can pay for permium account upgrades. With this, you got access to more spells, areas and such. Upsides: You still had to work for the items, which mostly removed the unfairness. Downsides: Still sepparation between haves and havenots.

Achaea
Normally free to play, but you could purchase 'credits' for real money. Credits could be used to train skills, get really good weapons, houses and similar. They could also be sold to other players. Upsides: Havenots could spend ingame time to get things to trade for credits. Downsides: Made some people overly powerful quickly.