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There are a lot of unique ways that people have learned to utilize video games over the years. They’ve served as motivational tools, high-profile competitions … a model from which to study complex economic scenarios. Ok, that last one probably needs a little explanation.

Research on a chalkboardMany persistent online games have auction houses, which allow players to buy and sell in-game items. Of course, different games add varying levels of complexity to this through the process of acquiring the items in the first place. In some cases, the best items require a pretty significant time investment, just like excelling in a profession in the real-world can take a lot of time. In some online games, that is taken to such a scale that it allows for effective economies to form. For example, the space-themed Eve Online has more than 400,000 players. As Washington Post columnist Brad Plumer noted, that’s more people than the population of Iceland.

In fact, the complexity of these virtual economies has expanded so much that game designers have had to turn to economists for help. Balancing game mechanics is a huge part of maintaining a multiplayer game. A specific character type or profession can’t have huge advantages over another kind of character. It leads to a lot of not-so-fun scenarios like players becoming frustrated because their favorite class isn’t enjoyable to play. Likewise, the economy of a game world needs a few checks and balances so that both new and old players can enjoy the intricacies of in-game trading.

Curiously, though, it isn’t just game designers learning from economists. In fact, the two professions have formed a symbiotic relationship.

“Just as video game designers are in dire need of economic advice, many academic economists are keen on studying video games,” Plumer wrote. “A virtual world, after all, allows economists to study concepts that rarely occur in real life, such as non-fractional-reserve banking, a popular libertarian alternative to the current banking system that cropped up in Eve Online. The data is richer. And it’s easier to run economy-wide experiments in a video game — experiments that, for obvious reasons, can’t be run on countries.”

Auction House

When worlds collide

Economic theory and video games have not traditionally been associated with one another, but some developers have even taken the step of hiring their own in-house economy experts. For example, Yanis Varoufakis detailed his transition from economics professor to video game consultant in a blog post earlier this year.

“I have been following your blog for a while … Here at my company we were discussing an issue of linking economies in two virtual environments (creating a shared currency), and wrestling with some of the thornier problems of balance of payments, when it occurred to me ‘this is Germany and Greece’, a thought that wouldn’t have occurred to me without having followed your blog,” Valve co-founder Gabe Newell explained in an email to Varoufakis. “Rather than continuing to run an emulator of you in my head, I thought I’d check to see if we couldn’t get the real you interested in what we are doing.”

Varoufakis also highlighted the value that video game environments provide for studying the complexities of economies. Virtual environments are able to provide infinitely more data, and, more importantly, they allow researchers to control the underlying settings. That way, experts can develop a model that follows closely to real-world rules, and then alter things slightly to test the impact of different settings.
Real World Economics of MMO RPG's

Can video games explain social behavior?

While there has been significant debate over what effect video games have on behavior, some innovative research has been directed at figuring out whether online games have anything to tell us about the way people interact. Social science research often runs into one big roadblock: As soon as people know they’re being observed, they’re likely to behave differently than they otherwise would. Also, it’s generally considered impolite (and unethical) to go around observing people in the real world without their consent.

Video game worlds offer a few unique advantages when it comes to social science research. As Rick Nauert, senior editor for PsychCentral, noted, the data from video game interactions is always available. This means that different researchers can look at the exact same data in the same context. This could dramatically improve repeatability of social sciences experiments. The anonymity of online games also gets past some of the privacy issues that would be created in real-world studies.

Nauert highlighted a study that looked at human behavior by collecting vast amounts of data from EverQuest 2. We’re willing to bet the game’s developers didn’t foresee their product being used to inspire the “next step in the evolution of social science research.” However, the countless player conversations and actions in the game amounted to more than 60 terabytes of valuable information for researchers to analyze.

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