The Galactic Banks Refuse To Deal in Such Fiddling Small Change

[phantom power]

Testing hypotheses in economics isn't usually easy. MMPORG economies offer new testbeds.

From an economics nerd perspective, Brad Plumer’s piece over at Ezra’s joint on the team of Icelandic economists studying the inner workings of EVE Online’s player-based economy is a rather nifty read, as online massive multiplayer economies have gotten far more complex, and economics has gotten far more digital and networked, the crossroads of the two were destined to meet.

Eyjólfur Guðmundsson is just that economist. Working for the Icelandic company CCP Games, he oversees the virtual economy of the massively multiplayer video game Eve Online. Within this world, players build their own spaceships and traverse a galaxy of 7,500 star systems. They buy and sell raw materials, creating their own fluctuating markets. They speculate on commodities. They form trade coalitions and banks.

It’s a sprawling economy, with more than 400,000 players participating in its virtual market — more people, in fact, than live in Iceland. Inflation, deflation and even recessions can occur. Which is why, from his office in Reyjkjavik, Guðmundsson leads a team of eight analysts poring over reams of data to make sure everything in Eve Online is running smoothly. His job bears more than a passing resemblance to that of Ben Bernanke, who oversees the U.S. economy from the Federal Reserve.

“For all intents and purposes, this is an economy that has activity equal to a small country in real life,” Guðmundsson says. “There’s nothing ‘virtual’ about this world.”

And as these systems become more complex, they approach the scale necessary to serve as experiments in macroeconomics that model how the real world works, and these games are getting more and more academic study. More than anything however, it’s insight into the heart of economics: people. And people do stupid things when money is involved, frankly.

http://www.balloon-juice.com/2012/10/01/the-galactic-banks-refuse-to-deal-in-such-fiddling-small-change/

[tama]

1. This should be in economy group

Netgame currencies and BITCOIN etc. are very important test drives for researching and creating alternative more sustainable and equal monetary system to replace the current FIAT currencies, which are in essence Ponzi schemes.

[Occulus]

2. "And people do stupid things when money is involved, frankly."

That's what caused me to almost fail Econ 101.

The instructor was one of those "economists". You know the type: invisible hand, free market, blah blah blah, but what really frosted my ass was her constant contention that "people will always make rational economic choices". Her words, not mine. Virtually everything she taught bore no resemblance at all to anything remotely like reality.

She also moved her head the way a mourning dove does when it walks with every word she spoke. Creeeeepy.

[littlemissmartypants]

3. This post is too cool

to keep it hiding back here in geek corner. Send it up front. I think it will fly. Thanks for posting. Thank you. LMSP

[drm604]

4. K&R

Very interesting!