Undercover Economist

Ed Castronova writes to inform me that:

With generous support from the MacArthur Foundation, we have created a fun game environment and used it to conduct a month-long experiment. Our experimental question (kept secret up to now) was: Are fantasy game players economically “normal”? Or on the contrary, when they make themselves into elves and dwarves and hobbits, do they stop taking economic decisions seriously? We created two virtual worlds, one an exact copy of the other, except that in the experimental world the price of a simple healing potion was twice as high as in the control. If people are taking prices seriously in this fantasy environment, they should buy fewer of the potions when potions are more expensive.

At stake here is the entire idea of using virtual worlds as a Petri dish. If fantasy gamers behave in ways that violate our most basic assumptions of economic normalcy, then it makes no sense to use virtual worlds to study large-scale economic behavior. If, conversely, fantasy gamers seem to be normal economic agents, then perhaps some of the behavior in virtual worlds does indeed generalize to the real world. If so, then we can consider using virtual worlds to conduct controlled experiments at the macro scale of society, where our most pressing problems seem to live (natural resource management, intercultural mistrust, information security, disease).

The initial findings of the Arden experiment will be released during the International Communications Association meetings in Montreal next weekend. The session we’re part of is this one:

“High Density Session: The Web 1.0, 2.0, and Beyond”
Time: Sat May 24, 3:00 – 4:15pm
Place: Le Centre Sheraton / Drummond West

See the entire schedule for Saturday here:
http://convention3.allacademic.com/one/ica/ica08/index.php?click_key=3&cmd=Multi+Search+View+Program+Load+Scheduled+Times&schedule_day=2008-05-24+00%3A00%3A00&PHPSESSID=e76b3aa3a0d5c7b574ab10b60c31733e

I would be mightily surprised if the answer is not “yes”, but let’s see. And the question strikes me as foundational. More on Castronova here and here and especially (in this context) here. More information when I know it.