A proposal; has anyone done this?

I am a writer, working on my first book, which is in support of the occupy movement. In thinking about our economy and how it might better work, i have come to think quite a bit about economics, and how it is studied. The absence of the ability of economists to test their theories under laboratory conditions seems to me to be a major problem in determining which economic ideas actually function, and I feel I have come up with an innovative solution to this problem.


Please read the article here, on gamasutr, "A virtual economic theory how mmos"

Excerpt "Economic theory is based on the notions of Perfect Market Competition, the ideal conditions for economic behavior that, sadly, elude us in the real world.
However, in virtual worlds, many of the otherwise untenable features manifest themselves: there tend to be no barriers to entry, as every player has the same intrinsic capability to engage in any of the game's internal economic activities (harvesting, crafting, trading, etc.); factors of production tend to be highly mobile in most games (once you can craft something, you can do so anywhere, at any time, without an investment in capital); products are homogeneous (all healing potions are exactly the same; all crafted Scorpion Harnesses are identical); and there are constant returns to scale (no matter how many potions you make, it still costs the same to produce each one).
This means that many of the core theories of economics, those of supply, demand, marginal revenue and the like, can be applied fairly directly to MMORPG virtual economies. "

The idea; My proposal is to make a free to play MMO (funded by economic research groups) for the express purpose of using the servers to "field test" economic theories.

At present, one of the major stumbling blocks of economists is that they have no laboratories with which to test their ideas. An economist cannot simply ask two countries to pass a sales tax in one and a value added tax in the other, and see what the effects are. Obviously, the governments in question will balk at the suggestion. In lue of this, economists use models, and hope their models are accurate. But what if they had two servers, with fully functional economies, and the ability to alter any and all aspects of these, other then the players reactions, at your discretion? It would be the easiest thing in the world to add a 5% purchase tax on one server, and a 5% of value production tax on crafting to another. Then, see what happens.

With four servers, you could have a sales tax distributed equally be email, a sales tax distributed as PvP reward, a production tax by email on a third, and a production tax by PvP on the fourth. It would be relatively easy then to see the effects of progressive vs regressive taxation upon an economy. So much could be learned this way; what effect does it have if cost of production change, is demand infinite, do markets for consumables and durable good function under different rules, how does the distribution of sellers over an area effect prices (stall vendors vs auction house)? Stock markets could be simulated by investments in guild wars, rewarded by how much each guild accomplished. But most importantly, every conceivable value would be pre-tracked, with no possibility of data loss, and all economic actors would have full information, as the abilities of any item are generally displayed with that item.

Obviously, the MIMO money system would have to be replaced with a reserve currency (I was thinking X currency per player level. So with 5 players, levels 20, 25, 25, 30, and 50, X=1,000 gold, the total currency on server would be 150,000 gold. This would start in an NPC vendor bank, to which the players could sell drops in exchange for the currency, exactly as normal.) The obvious problem of bank runs would in itself be a good test.

I have several other ideas related to in game mechanics ( a skill system based partially on innate skills, partially on weapons, and partially on “orbs” that are trade-able and universal between characters, which could serve as a default currency in the event of currency collapse.)

Example ; A mage has a spell Bolt, a staff with one “space” on it, and a rank 1 fire orb. She can put the orb in the staff, equip the staff, and cast fire bolt 1. The skill would add (or multiply) its damage value to the orbs damage (possibly including some effect/multiplier from the staff). Alternatively, a fighter might have the skill Bash, a sword, and a rank 1 fire orb. They could swing the sword, yielding sword + orb damage, or use Bash, multiplying sword + orb damage by the Bash effect. In addition, since the orbs are universal and have use value, they can serve as a backup currency in the event the vendor bank runs out of in game currency. This would necessitate orbs dropping with relative frequency, possibly 1-4% from field mobs, 3-7% from dungeon mobs, 25-60% from field bosses, and 50-80% from dungeon bosses. Ranks would of course determine the strength of the orbs attack, increasing from 1-5.

Since in game crafting is based on drops from monsters or harvesting of resources, it would be relatively easy to make it so that all equipments (except ultra rare) can be crafted, and all non usable items craft into something, thus further encouraging economic activity, due to trading of items for crafting.

In turn, papers could be published on the games web forum (I can think of no more stringent review then a thousand players wondering why healing potions suddenly take twice the resources to produce then they did last week). This would allow economists to create “teaching moments” for people normally not involved in economic theory, as well as getting a “common man” response to theories. In addition, this would give you a citable response to economic theories from people who have been functioning in them.

The problem is of course, getting started... Again we run into the same problems as the nations, most companies would not be interested in having their for profit game used as an economic testing ground. However, while economists cannot simply build a nation somewhere to use, you can most certainly build a video game somewhere to use. In addition, I am confident that since a significant number of MMO players are college age, they will be happy to find they can 1) play a fun game for free, 2) have access to the latest in economic research being produced, and 3) help economists figure out how to get our nation out of this mess and prevent another one.


In my view, all this is well worth the ability of economists to say, ”We tried that. Three weeks of data, 800 players, and 12 pages of forum ranting all say IT DOESN’T WORK.”

I don't mean to rain on your parade, especially since the idea actually has some merit. MMO's have been used to study social interaction before, although I'm not aware of any popular MMO's that have been developed explicitly for that purpose. EVE Online in particular is well known for having a very player driven economy.

However, the first problem is cost. MMO's are expensive to build and expensive to run. To put it into perspective, more than one recent MMO has cost more than $100M for development alone, and you can be sure that the companies spent tens of millions at least in advertising and marketing on top of that. However, the initial development cost of the MMO is not everything. An MMO requires powerful servers to host the game. You would be looking at thousands of dollars per month for even a relatively small MMO to cover server hardware, power costs, bandwidth costs and management time. There is a strong economic reason that nearly all MMO's have a fairly substantial subscription cost, and it's not because gamers like paying it.


If you change anything in a major MMO you will get 12 pages of forum ranting saying it doesn't work. That's just how gamers are; every single change will break the game for some people.

I'm not an economist, so the validity of my next two points could be called into question, but in my opinion, the economy of an MMO has massive differences from the economy of the real world. I would think that these differences would significantly bias any research based on the behavior of gamers.

My final question is whether something like the economy really even has "ideal" conditions. Physics experiments can be replicated in a laboratory because the laws of physics are, for the most part, constant over time (in that most of them only start to break down at the very extremes). The "laws" governing the economy are far from constant. Hundreds of years ago owning slaves was socially acceptable and the US economy was structured radically different from the way it's structured today. Thousands of years ago humans had little manufacturing technology and the economy was even more different. Tens of thousands of years ago humans were hunter-gatherers and there was no economy as we know it today. Tens of thousands of years ago the laws of physics were exactly and precisely the same as they are today. In the grand scheme of things tens of thousands of years is nothing anyway. So essentially what I'm trying to ask is whether the economy even has "laws" that could be discovered by laboratory testing.

I actually started writing a mostly text driven perl game (it was in my "teach myself perl by doing something cool" phase) where I had databases loaded up with government data, mostly from bls.gov and census.gov. I won't really reveal the guts of it because it's still something I might revive one day but it is not exactly light years away from your concept. While you envision more complex calculations and I was going more for a regional roleplay I don't think you need vast resources to prototype.