From Scientific American online, “What Can Virtual-World Economists Tell Us about Real-World Economies?“:
Eyjólfur Guðmundsson is the only economist on Earth who spends his days studying the fluctuating cost of warp-disruption batteries and T2 light drones. That’s because he’s the world’s first virtual-world economist.
This past August, Guðmundsson took up residence in EVE Online, a massively multiplayer online game, to report on its economy, research its society and coordinate with academic institutions on their entrance into virtual worlds.
Think Alan Greenspan–only in Battlestar Galactica. In EVE Online players buy, sell, trade, earn, steal and otherwise work to accumulate interstellar kredits (ISKs)–a currency that, officially at least, is only valuable inside EVE.
The article includes quotes from George Mason University economist Tyler Cowen, who says he is “skeptical about using virtual worlds to do economics, at least as it is now.” He says the simulations don’t much resemble the controlled laboratory work that experimental economists do, so he doesn’t quite see how economic analysis of virtual worlds will be useful. Cowen sums up, “Whatever result you get is interesting, but you don’t know what to make of it. You’re stuck.” (Though I recall just a week or two ago, Cowen offered praise for one of Edward Castronova’s books on virtual economies. Link here.)
I think Cowen is underestimating the creativity of young economists to apply their tools and training to new problems. Of course the economics profession — naturally dominated by, shall we call them, a group of very experienced economists — may be slow to recognize the value of work in virtual economies, so I wouldn’t try to make tenure on a handle of Everquest and EVE Online papers, no matter how clever they are.
FORGING NEW LINKS: The SciAm article may be the first to both mention Battlestar Galactica and cite a paper by Vernon Smith (with colleagues Stephen Rassenti and Bart Wilson) on demand-side participation in electric power markets.