Virtual World Economy

When I first saw a 68 page article in the reading, I was a bit taken aback, but I found this article to be incredibly interesting, maybe even the most interesting one we've had all semester. An analysis of a video game world from an economic viewpoint? Very cool.

Castronova writes first about the same things we've already said about virtual worlds, that they are popular and that a lot of people's time is spent in them. But he goes on to explain more than the other articles do. He describes the interesting trade dynamics of Norrath (and most other MMORPG VWs). A player can either trade goods with player characters (PCs) or non-player characters (NPCs). Both have their advantages. PC trades allow you to get more money for sold items that are in demand and better items for cheaper. NPC trades offer a fixed price, regardless of demand. They also never run out of items or refuse to buy any more of a particular item. Castronova equates selling loot to NPCs to being paid for work.

A good many other interesting observations are made in Appendix A. He talks about the potential of VWs as a place to do research that would be impossible in the world due to it being immoral or infeasible. A few of these topics are the idea of Utopia, cultural norms, and emergence of social organization. Because people are paying real world money to play this game (and spending hours online), presumably, Norrath is a civilization very similar to the ideal society that people desire to be in. By this logic, Norrath could be considered a Utopia of sorts. He postulates that it is not equality of outcome that is important, but equality of potential. Each player starts out even and their success is nearly directly proportional to the effort they put into the game. Social and cultural norms also are interesting to look at. Why is it that new players are looked down upon? How are female avatars treated compared to male avatars? Lastly and perhaps most interestingly, how does social and cultural organization arise? Norrath provides the unique opportunity of providing 40 identical worlds that all developed independently. However, certain things are common in each world. There are social factions. People work together with strangers. The majority of players go to one central location to strike up trades (with one single world location as the favored trade location of all the servers). How do these things arise simultaneously?

Do you think that virtual worlds can/should be used in formal academic studies to further our understanding of human nature? Would you consider results obtained in this way to be valid?