Today's virtual worlds have their own virtual economies, whether you're coughing up enough gold to buy an epic mount in World of Warcraft or converting real money to Linden dollars so you can buy realistic genitalia for your Second Life avatar. EVE Online, a sci-fi online game of space warfare and commerce, may have the deepest, most complex virtual economy in the world. It's so deep, in fact, that EVE Online has a chief economist, Eyjolfur Guomundsson. What do real economists think of fake economies? Guomundsson recently talked to BusinessWeek, and he had some surprising things to say.Guomundsson has been working with EVE Online since 2004, when he was struck by the innovative idea behind the game's design — players would interact with each other to develop and trade the items they need within the game. EVE's 250,000 subscribers take part in up to one million transactions involving about 5,000 different items each day. They generate so much economic data that Guomundsson can't study it all, so he's looking for academic researchers who might be interested. You might be wondering what the chief economist of a virtual world actually does. Guomundsson described his job as having three parts: 1. Gather economic data about EVE Online, then publish that information in EVE's quarterly economic journal. 2. Talk with the game's developers about potential changes to the game and what economic fallout those changes might bring. 3. Get the academic world interested in studying EVE's virtual economy. As for what we might learn by studying these economic microcosms, he had some interesting points:
We can learn from watching the market behavior within a confined world like EVE Online and learn about how price bubbles, for instance, are formed, and what triggers them. I think if someone were to mine through our data, they would be able to find some interesting cases and examples of that. We can also see in terms of social interaction...how people form groups, and what it is that makes people work together. EVE is a harsh world of hard competition, but still people come together to work for a common cause. What is it that lets those people come together?
He also pointed out that EVE Online would make an excellent business simulation. Business students could set up and run their own corporations, and see how their decisions play out in a complex market. Image by: CCP. An Economist on the Virtual Economy. [BusinessWeek]