13 ms·

It all began with a strange email

874 points by julioc 14y ago

dwc 14y ago
Intensely interesting. I'm looking forward to more blog entries. Though not an economist, I've always lamented the way econometrics was starved of opportunities, and the way competing ideas could both thrive with no real hope of resolution.
frinxor 14y ago
Looking forward to these posts. I've remember being completely fascinated by Diablo 2's virtual economy, and saddened that I could find so little articles about it.
- CosmicShadow 14y ago
  I went to GDC this year and saw a talk by a PHD Economist who does work on video game economies and releases reports about them. It was one of the coolest talks I attended, and I spoke with him afterwards. In his talk he mentioned Habbo Hotel a lot and spoke about a few other economies and how they came to settle on some sort of currency. I just had to bring up how I first noticed a form of virtual currency in Diablo 2 as he didn't seem to mention it. I do recall that SOJ's were like the defacto unit of pricing other items. Apparently he had actually never heard about that, which surprised me greatly (perhaps because Diablo 2 was so huge, and because it was one of the only examples I personally had). Here's hoping he looks into it and writes a report about it!
steve8918 14y ago
This is truly fascinating. I remember hearing about virtual economies where money can be injected at any time through gold mining, etc, and that they were inherently unstable. Once you got the gold farming schemes that sold gold on e-bay, it created massive hyperinflation. And it totally made sense that hyperinflation would occur since the creation of virtual gold was limitless and effortless, so the gold farmers didn't care how much gold they sold it for as long as they got real money. That rendered the price of gold worthless, and it drove up the prices of virtual goods across the board. I would love to see how these problems are tackled in the virtual world.
- arohner 14y ago
  Valve's games put a cap on real prices by selling the items through Valve's store. You can buy a new gun for $2, so the price of the gun in "ebay gold" will never rise above $2. (Big simplification for TF2 players follows) Also, in TeamFortress 2 (Valve's biggest virtual economy), it's difficult to farm gold. Logged in players receive 1 gold/hr, capped at a max of 10 gold/week. It's possible to create new accounts, and run all of them concurrently, but the expected gain is fairly low, and you have to pay Valve real money for the privilege of having extra accounts. The exchange rates are also totally asymmetric. The exchange rate for money into gold is approximately $1 => 81 gold. The exchange rate for gold back into real money is ambiguous. There isn't a liquid market here. It involves finding rare in-game hats that aren't sold in the valve store, and selling them on e-bay for $100-$400. The hypothetical gun might cost $2 on the valve store, but 1 gold in game (i.e less than 1% of the store price). This strongly incentivizes players to trade in-game. It's possible to make a profit by trading with humans, but that's labor intensive (because you have to find the player and haggle), and probably seen as a positive for Valve, because the traders are providing liquidity.
  - prezjordan 14y ago
    But not every item is available in the store. The ones that aren't - unusual hats, super-rare "glitch" items, community weapons - sell for hundreds and hundreds of dollars. One such "glitch" is known as a "vintage scrap metal" which only a few exist in the game. They popped up when a user would delete their metal and ask valve to put it back, when they did, it showed up as "vintage scrap metal" with blue text. Such metal has sold for over $1,000. I feel much of the TF2 economy (these items that can't be bought in a store) is simply players holding onto the weapons and working together to sky-rocket the price. Now, people refer to a "spreadsheet" which is set by a group of individuals. Everyone follows this spreadsheet religiously. For small items, I think the TF2 economy is very neat. But for rare items? A mess.
    - arohner 14y ago
      After I wrote this last night, I'm now leaning towards the idea that the "rare item" economy is intentional, and working as designed. In effect, by making it difficult to turn virtual gold into money, and allowing rare items to sell on EBay, Valve is paying a small number of traders to provide a liquid market. I'm aware of the spreadsheet, but I think you overstate its importance. Sure, people are aware of the book value, but just like real life, people pay more or less than the book value according to their desire.
goombastic 14y ago
I guess I would be interested in a truly economics oriented game that modeled nations without it being about wars, raids, guilds, spells etc. Not sure if something like that exists though.
- akavi 14y ago
  I've heard EVE online described as such. Well, not so much spells, since it's space oriented rather than fantasy, but it does have a complicated, realistic economy with corporations, wars, and economic exploitation.
- kd0amg 14y ago
  It seems like the game would need some sort of non-utopian conflict-driven backdrop to create enough desire for whatever products for there to be an interesting economy.
  - goombastic 14y ago
    That's an interesting observation. I wonder if that's true of normal economies as well and that final agents of economy, people, would ideally want in-game/in-life situations in which they can "win" for value to be produced.
- flyinRyan 14y ago
  Second life doesn't fit the bill?
- ricree 14y ago
  A Tale in the Desert is probably the closest I know of. Its player base is limited compared to most MMOs (around 1000-2000ish, last I looked), but it's a combat free game centered around economic production. It's also a bit unusual in that it has no in game currency. The last time I played (a bit more than 5 years ago), it was largely a barter economy. However, there was a player run item exchange whose credit functioned as a defacto currency. I have no idea what the current state of the game is, but if you're curious about a non-combat economic MMO, it's worth taking a look at.
xb95 14y ago
I worked at CCP when they hired Eyjólfur. He came in without really knowing a lot about the game world and made it his first job to learn as much as he could about how the world actually worked. Given that I was a foreigner who was working and living in Iceland, I didn't have much of an evening social life. I was also one of the relatively few employees (sadly) that were really active in the game in the advanced levels of play -- 0.0, empire wars, etc. Eyjólfur spent a bunch of evenings sitting with me while I played internet spaceships. He asked tons of questions and really got to learn the universe, or at least my corner of it. It was really interesting to work with him and hear him talk about his thoughts as he was putting them together. CCP used to publish the Quarterly Economic Newsletter, like this: http://cdn1.eveonline.com/community/QEN/QEN_Q3-2010.pdf http://cdn1.eveonline.com/community/QEN/QEN_Q3-2010.pdf They've since stopped doing that, but you can see from that example that it used to be a fantastic resource. If you wanted to know the nitty-gritty details about the universe of EVE Online, the QEN was hard to beat.
- creamyhorror 14y ago
  [edit: reposted as top-level comment; I apologize for the repetition] CCP's economist's reports are the real deal. The EVE game economy is I dare say more developed and complex than most other games' - it has many kinds of input factors and stages of production, and many of the production facilities/resources are player-controlled and their fate determines on political maneuvering, war and sabotage between player corporations (guilds). The price of most items in EVE (ships, weapons, components, structures) is determined by the state of production and speculation in the economy, so CCP has to consider the economic impact of nearly every single change they make to the game world. If any of you folks are interested in reading about a truly fascinating, active digital economy, you have to read the EVE economic reports and other investigations of EVE. It's like reading about mining, manufacturing and stock markets - against a background of eternal war between corporations - in far-future space. edit: links to additional content ----- http://pc.gamespy.com/pc/eve-online/855380p1.html http://pc.gamespy.com/pc/eve-online/855380p1.html >>> EVE Online was developed to have a very dynamic economy from the very beginning. It was decided that "time" would be treated as a valuable player resource: for that reason, raw materials were spread all over the galaxy map, which takes hours to traverse. This created regional pricing. Interestingly, there were no trade hubs built into the core game design -- players gradually settled into certain areas and made their own pockets of population where trade thrived. >>> Gudmundsson had some fun examples of how intelligent virtual economies can be. He showed a graph displaying the prices of a mineral in the game known as Zydrine. Zydrine is hard to find in the EVE universe, but players had discovered that killing a certain class of drone often leaves behind Zydrine in the wreckage. This hole in the market led to lots of drone-farming, and subsequently the price started to drop. Drastically. The developers decided to tweak the drop rate and this change rolled out onto the test server, unannounced, and mixed in with all sorts of other tweaks. Still, clever players noticed the change. Word got out. And suddenly, even though nothing had yet been done on the live server, prices for Zydrine spiked dramatically. Markets make for great predictors of future events! ---- http://blogs.wsj.com/economics/2010/06/21/real-economist-takes-lessons-from-virtual-world/ http://blogs.wsj.com/economics/2010/06/21/real-economist-tak... >>> One of his team’s first big findings is somewhat sensitive. Confirming decades of gender research by economists, sociologists and anthropologists, Mr. Turpeinen’s group found that the same biases that have historically favored men in the real world exist in a virtual economy. Their research demonstrates that both women subscribers and female avatar characters operated by male subscribers in EVE are biased toward a slightly lower chance of success in competition with their male counterparts.
zackbelow 14y ago
This is awesome.
sp332 14y ago
Which two economies were being merged?
- lwat 14y ago
  I'm guessing TF2 and Dota 2?
petitmiam 14y ago
Fascinating read, just like many of the other Valve blogs. Though, I do wish this guy could explain why real-world money Steam games in the US are often half the price of those in Australia/Europe.
- objclxt 14y ago
  Advertised prices in $ exclude sales tax, because for most states it isn't levied on digital downloads. However, VAT in EU countries (don't know about Australia) is included in the price. This causes a fairly substantial discrepancy, as VAT can be rather high (in the UK, 20%). Other discrepancies can usually be put down to exchange rate fluctuations, which with the recent financial issues in Europe have been somewhat unstable.
  - neotek 14y ago
    Regarding Australia, our GST is a flat 10%, and the AUD is near parity with the USD (and has been above parity for most of the last 12 months). The price discrepancy is far greater than it should be if those were the only factors. The Australian Competition and Consumer Commission, an independant regulatory body in Australia that oversees the Trade Practices Act (among other things), is in the process of inquiring into the so-called "Australia Tax" to find out why companies like Apple and Valve charge far more for software sold in Australia than in other countries despite the low true cost difference.
    - inopinatus 14y ago
      The ACCC is pissing in the wind. It's just a matter of geographic price segmentation to maximise revenue. End of story. Also, end of legal challenge: * there's no violation of free trade agreements, which are about governments dropping barriers like tariffs and quotas and confer neither rights to individuals nor obligations on businesses, and * there's no violation of individual rights, because country-of-residence is not a protected class, unlike gender/orientation/skin colour/race/disability.
  - cube13 14y ago
neilk 14y ago
Complete tangent, but I noticed that on Yanis Varoufakis' blog, the current entry is his interview with Max Keiser. http://yanisvaroufakis.eu/2012/06/15/ponzi-austerity-interviewed-on-the-keiser-report/ http://yanisvaroufakis.eu/2012/06/15/ponzi-austerity-intervi... What's the connection? Max Keiser sounds exactly like the defective turrets from Portal 2. Coincidence?!
katsaroles 14y ago
A bit of a background: Varoufakis is something of a celebrity in Greece for being one of the first and the most vocal economists to speak out against the European strategy for resolving the Greek sovereign debt crisis. His predictions have proven to be tragically spot on so far, although it remains to be seen whether his proposal for renegotiating the European bailouts, a proposal that the left-wing SYRIZA political party (which has about 50% chance of winning in the Sunday elections and has allegedly asked Varoufakis to be its economic advisor) has stood behind, is actually a realistic one. He fled to the US and Valve after the doctoral program in Economics he had built in the University of Athens was dismantled during the crisis and after he started receiving death threats by people who weren't particularly thrilled with his opinions.
- deleted 14y ago
  [deleted]
- msfd 14y ago
  You seem to know a little bit about this gentleman than I (and the rest of HN probably) know, could you tell us more about his (correct) predictions ?
  - starpilot 14y ago
    I found this snippet from 24 May on BusinessWeek: http://www.businessweek.com/articles/2012-05-24/greeces-brain-drain-has-begun http://www.businessweek.com/articles/2012-05-24/greeces-brai... > By the end of 2011, Yanis Varoufakis was a celebrity. The director of the Ph.D. program in economics at the University of Athens, Varoufakis had been arguing for two years that Greece was insolvent and the country should default while staying in the euro region ... In 2006, Varoufakis gave a talk in Athens predicting a financial crisis that would start in U.S. real estate, move through Wall Street, and on to Greece.
  - antman 14y ago
    I have attended one lecture-seminar-debate for economists. He was a spokesman and his ideas can be summarized in 2010 here [1]. His work regarding european crisis [2] [1]:http://yanisvaroufakis.eu/2010/12/17/the-modest-proposal-in-600-words/ http://yanisvaroufakis.eu/2010/12/17/the-modest-proposal-in-... [2]:http://yanisvaroufakis.eu/euro-crisis/ http://yanisvaroufakis.eu/euro-crisis/
DanielBMarkham 14y ago
Four years ago one of my first startup ideas I pursued was setting up an arbitrage between virtual economies. I believed then (and still believe) that it is a huge chunk of the future. Everything that is tangible now will become software and intangible in the future. That means the virtual economy is set to eclipse the current one. I spoke with some somewhat famous startup-type people; several I met on HN. None of them seemed interested in my pitch (I was looking for a cofounder). One basically said "I've already got my FU money. This just doesn't excite me that much." I'm looking for some cool things to happen in this space over the next decade. When I was kicking this around we had all sorts of things we wanted to try. It'll be interesting to see if any of them come to fruition. One of the key questions in this space is whether it's even possible to manage virtual economies as this guy wants to do, or it there's always some level of abstraction that's remains out of reach. My money says the thrill of being able to finally experiment will be short-lived. Odds are each economy we create with gaming rules will simply be a small subset of a much larger informal economy. Cool stuff.
- unimpressive 14y ago
  Interesting. I have some questions. (If you don't mind answering.) > Everything that is tangible now will become software and intangible in the future. When you say this what exactly do you have in mind? Virtual reality? Living substances made through bio-hacking? > or it there's always some level of abstraction that's remains out of reach. What sort of abstraction do you feel would be prohibitive in this environment? > That means the virtual economy is set to eclipse the current one. In what capacity? Like bitcoin, or like for the win[0]? [0]: http://en.wikipedia.org/wiki/For_the_win http://en.wikipedia.org/wiki/For_the_win Thanks in advance.
  - DanielBMarkham 14y ago
    Manufacturing of tangible goods will become a commodity as 3-D printing becomes mainstream. In addition, many services that were verbally or physically contracted will be handled completely in virtual reality. Think home robots cutting hair, or auto-drive cars. And as you point out, that's not even touching bio-hacking, which is also converging to digital/created lifeforms. Call me cynical, but this article struck me as nerd candy. It's a totally-awesome idea: we finally get to really measure and experiment with economies! But in my research several years ago I was already uncovering hundreds of millions of dollars in a virtual goods black-market. People will take a character of yours and spend all of their time leveling him up and getting lots of goodies. Then you log in and take over. You pay them through some back channel. Or you leave an item where somebody else can pick it up, etc. No matter how you design a virtual world, there are plenty of ways to make economic transactions outside the walls. The illusion that you somehow have a god-like view and can see and observe everything of important is just that, an illusion. But I'm willing to wait a few decades for the economists to figure that one out :) The virtual economy will merge along multiple different lines. I don't think there's any one answer here. There's no reason your WoW character can't be traded for BitCoin and used as a downpayment on a VR piece of real-estate that you then later sell at a profit for options on a futures market in some rare item coming out in a game next year. Thinking in a linear fashion can really handicap the possible solution sets out there.
dkarl 14y ago
an economy where we do not need statistics since we have all the data! I simultaneously feel his elation and am mystified. If you have such a quantity of data that you must relate to it via statistics, how is that better than only having the statistics? Is it because you can define and calculate your own creative statistics, or...?
- creamyhorror 14y ago
  Off the top of my head: you no longer need to sample to obtain your statistics, and you can obtain good statistics on virtually everything and every sub-component of the economy, sliced every which way, as many times as you like -- which is much harder in the real world. You can't just go out and gather information on sales of all red, oblong widgets in shops owned by couples aged 50-60 with one dog and one cat -- but you can in a game economy. Basically it's a huge data laboratory where you are able to record every transaction in the world, and work from there. That's massively useful to economists, because they can now test a far wider range of hypotheses and, furthermore, eliminate them much more quickly.
  - yk 14y ago
    Even the real data should contain noise, compared to a true hypothesis. For example, you could predict that a certain (for the purpose of the example, small) percentage of all players will buy a certain ship. But many of them just stop playing by chance, then your prediction fails even if the underlying theory is correct. [1] I believe the main advantage is, that you can get rid of sampling bias. So you can look at the entire economy, not only on the part which is willing to answer a poll. For a nice real world example see [2]. [1] https://en.wikipedia.org/wiki/False_negatives#Type_I_error https://en.wikipedia.org/wiki/False_negatives#Type_I_error [2] http://neuroanthropology.net/2010/07/10/we-agree-its-weird-but-is-it-weird-enough/ http://neuroanthropology.net/2010/07/10/we-agree-its-weird-b...
    - lotharbot 14y ago
      > "But many of them just stop playing by chance" I suspect this will be one of the significant weaknesses in trying to translate anything learned in a game economy into real economies. You have much better data in a game economy, but people do grow bored or decide they're just not good enough, and move on. Or people decide they've taken a stupid path and reset their account, and build from scratch. In real life, most people try to keep living even if they're at the bottom end of the economy and don't have the means to change that. This strikes me as a fundamental difference between the virtual and the real.
creamyhorror 14y ago
Among virtual economies, EVE Online's economy is the real deal. The EVE game economy is I dare say more developed and complex than nearly any other games' - it has many kinds of input factors and stages of production, and many of the production facilities/resources are player-controlled and their fate determines on political maneuvering, war and sabotage between player corporations (guilds). The price of most items in EVE (ships, weapons, components, structures) is determined by the state of production and speculation in the economy, so CCP has to consider the economic impact of nearly every single change they make to the game world. (They hired their in-house economist in 2008 IIRC.) If any of you folks are interested in reading about a truly fascinating, active digital economy, you have to read the EVE economic reports and other investigations of EVE. It's like reading about mining, manufacturing and stock markets - against a background of eternal war between corporations - in far-future space. EVE Quarterly Economic News, by CCP's economist Eyjólfur Guðmundsson (link courtesy of xb95): http://cdn1.eveonline.com/community/QEN/QEN_Q3-2010.pdf http://cdn1.eveonline.com/community/QEN/QEN_Q3-2010.pdf edit: links to additional content ----- http://pc.gamespy.com/pc/eve-online/855380p1.html http://pc.gamespy.com/pc/eve-online/855380p1.html >>> EVE Online was developed to have a very dynamic economy from the very beginning. It was decided that "time" would be treated as a valuable player resource: for that reason, raw materials were spread all over the galaxy map, which takes hours to traverse. This created regional pricing. Interestingly, there were no trade hubs built into the core game design -- players gradually settled into certain areas and made their own pockets of population where trade thrived. >>> Gudmundsson had some fun examples of how intelligent virtual economies can be. He showed a graph displaying the prices of a mineral in the game known as Zydrine. Zydrine is hard to find in the EVE universe, but players had discovered that killing a certain class of drone often leaves behind Zydrine in the wreckage. This hole in the market led to lots of drone-farming, and subsequently the price started to drop. Drastically. The developers decided to tweak the drop rate and this change rolled out onto the test server, unannounced, and mixed in with all sorts of other tweaks. Still, clever players noticed the change. Word got out. And suddenly, even though nothing had yet been done on the live server, prices for Zydrine spiked dramatically. Markets make for great predictors of future events! ---- http://blogs.wsj.com/economics/2010/06/21/real-economist-tak.. http://blogs.wsj.com/economics/2010/06/21/real-economist-tak.... >>> One of his team’s first big findings is somewhat sensitive. Confirming decades of gender research by economists, sociologists and anthropologists, Mr. Turpeinen’s group found that the same biases that have historically favored men in the real world exist in a virtual economy. Their research demonstrates that both women subscribers and female avatar characters operated by male subscribers in EVE are biased toward a slightly lower chance of success in competition with their male counterparts.
mrose 14y ago
Maybe it's getting late, but I think i could really use an upvoted tdlr for this...
- bmelton 14y ago
  This isn't Reddit, and that sort of behavior here is actively discouraged.
  - mrose 14y ago
    My comment was sincere and I stand by it. The article was quite long and I've often seen similar summary comments for such articles here on HN. I think for really in depth articles it helps to have a good overview before commiting time and diving in (something more than an obscure title and the valve.com domain). In this case, I was initially under the impression that it was part of an ARG, a topic I am very interested in. I should also note that I don't see anything in the guidelines about asking for a summary.
    - bmelton 14y ago
      I don't disbelieve your sincerity, but was simply stating that we discourage the notion of of "TL;DR" here, as a community, whether or not it's in the guidelines. It's also not in the guidelines (as far as I can tell by skimming) that your comments should further the conversation, but that is another ideal to which the community at large has agreed to aspire. We collude to keep comments on topic and interesting, because that's what the community wants and needs. I wasn't casting judgement on your post but, as I noticed you were new, thought I'd offer it as advice. On a personal note, especially with articles like this, if you are interested in the topic at hand, read the article. There really isn't any good substitute.
- pbhjpbhj 14y ago
  Valve hired a well-known economist. Symbiosis occurred.
- deleted 14y ago
  [deleted]
sams99 14y ago
If anyone from valve is listening, would really appreciate it if you added commenting support to your blog, I am looking forward to this series of articles, it is a very interesting and unique space.
- juan_juarez 14y ago
  Have you ever read the WoW forums (or any other official game forum)? The signal to noise ratio is absolute crap. The first few pages would be people saying "first!" and it goes downhill & off-topic from there. We're talking about a site with 10M subscribers, all of them focused on a single piece of official correspondence, wanting their chance to get attention. It would be absolutely useless & provide zero opportunity for intelligent dialog. If anyone from Valve is listening and wants to open discussion, they would do better to interact with 'higher quality' communities directly.
lhnn 14y ago
>the notion that a computer game company has surreptitiously and quite spontaneously created virtual economies that it comprehends as ‘economies’ (which deserve study and regulation) was enough to write back instantly Does this man believe we should have legal regulation of game economies? Oh wow.
- ezy 14y ago
  I think he's referring to the regulatory control Valve exerts over the virtual world.
- swombat 14y ago
  Do you believe we shouldn't? Assume an economy can be sized... so it's a $100m economy, or a trillion-$ economy, etc. Connecting economies together obviously causes them to impact each other. So long as games are connected just to the US economy, and it is much, much larger than any game economy, the impact on the "real" economy is nil. What about a much smaller real economy? Connect an economy the size of Eve or WoW to one the size of Zimbabwe. Suddenly, events in the game can have very real macro-economic effects on the "real economy". For example, uncontrolled creation of "wealth tokens" can lead to inflation, and contaminate the real world just in the same way as currency fluctuations impact the real world. Banks can create money, and they are regulated. If virtual economies can create money on a scale large enough to disrupt the real economy, shouldn't they be regulated too? I'm not saying the answer is obviously one way or the other, but to dismiss the question with an "Oh wow" seems very short-sighted.
  - nemo1618 14y ago
    That's a good point. I hadn't really thought about virtual economies like WoW or Eve as similar to the Fed in that they can essentially print money.
    - saraid216 14y ago
      Only for their given domain. Blizzard and CCP are free to make as much gold and ISK as they want (and they do; it's a faucet-drain economy, and the faucet does not get shut off). But the quantity and buying power of said currencies change its value in relation to real world money. So saying they can print money is not really true; they can control the value of a particular good that isn't intended to be a good.
Joss451 14y ago
For the sake of Pete, someone remove the parens from this man's keyboard.
pilsetnieks 14y ago
Reminds me of Neal Stephenson's Reamde and the T'Rain geology
wglb 14y ago
An interesting resonance with Charls Stross's Halting State.
stretchwithme 14y ago
An economist finally admits it why they fail so much. "let’s face it: Econometrics is a travesty! While its heavy reliance on statistics often confuses us into believing that it is a form of applied statistics, in reality it resembles computerized astrology" "the reason for this unavoidable failure? None other than our inability to run experiments on a macroeconomy" The theories are never tested. They just get implemented. A thousand other things are happening at the same time and its impossible to get anything approaching the clarity of a double blind experiment. But the adherents act as if they've got exactly that.
- tatsuke95 14y ago
  >"An economist finally admits it why they fail so much." What do you mean by "so much"? Because they can't accurately, regularly predict the future? I think you'll find that, in reality, economists know their fallibility and limitations. It's the proletariat that doesn't understand the under-pinnings and assume economists should be 100% accurate when they make predictions, and are upset when they are not.
  - stretchwithme 14y ago
    We're not in the current crisis because the people expect 100% accuracy from economists. Its that economists have bad theories. Most economists fail to offer theories that accurately describe reality. Keynesian is the current disaster. And politicians can only pick from the available theories and tend to pick the most shortsighted of policies, as they are trying to get re-elected. Its not that a bunch of unforeseen events have occurred. Its that theories being followed are bad. They ignore many very real things. And the consequences that most economists have been denying all along are happening. For example, they analyze the multiplier effect government spending but ignore the effects of removing those resources from other parts of the economy. They don't analyze what happens where the resources are being taken away. But those resources are real things that people no longer have and cannot use.
Tichy 14y ago
What games does Valve have that have virtual economies?
- tvorryn 14y ago
  Team Fortress 2 and DOTA 2 are the ones I know of. http://en.wikipedia.org/wiki/Team_Fortress_2#Free-to-play http://en.wikipedia.org/wiki/Team_Fortress_2#Free-to-play http://en.wikipedia.org/wiki/Dota_2#Free-to-play http://en.wikipedia.org/wiki/Dota_2#Free-to-play
  - chmike 14y ago
    One can exchange items, but not sell them. There is no money account in TF2. So I don't see any relation with a real life economy.
nmutua 14y ago
i think the gaming sector with its virtual economies is a very good representive for "real" economies. in both economies it's all about feeling, very irrational. many panics and hypes. it's a bold move by valve to hire an economist-in-residence. they are going for the big shot

874 points by julioc 14y ago

dwc 14y ago

Intensely interesting. I'm looking forward to more blog entries. Though not an economist, I've always lamented the way econometrics was starved of opportunities, and the way competing ideas could both thrive with no real hope of resolution.

frinxor 14y ago

Looking forward to these posts. I've remember being completely fascinated by Diablo 2's virtual economy, and saddened that I could find so little articles about it.

CosmicShadow 14y ago
I went to GDC this year and saw a talk by a PHD Economist who does work on video game economies and releases reports about them. It was one of the coolest talks I attended, and I spoke with him afterwards. In his talk he mentioned Habbo Hotel a lot and spoke about a few other economies and how they came to settle on some sort of currency. I just had to bring up how I first noticed a form of virtual currency in Diablo 2 as he didn't seem to mention it. I do recall that SOJ's were like the defacto unit of pricing other items. Apparently he had actually never heard about that, which surprised me greatly (perhaps because Diablo 2 was so huge, and because it was one of the only examples I personally had). Here's hoping he looks into it and writes a report about it!

steve8918 14y ago

This is truly fascinating. I remember hearing about virtual economies where money can be injected at any time through gold mining, etc, and that they were inherently unstable. Once you got the gold farming schemes that sold gold on e-bay, it created massive hyperinflation. And it totally made sense that hyperinflation would occur since the creation of virtual gold was limitless and effortless, so the gold farmers didn't care how much gold they sold it for as long as they got real money. That rendered the price of gold worthless, and it drove up the prices of virtual goods across the board. I would love to see how these problems are tackled in the virtual world.

arohner 14y ago
Valve's games put a cap on real prices by selling the items through Valve's store. You can buy a new gun for $2, so the price of the gun in "ebay gold" will never rise above $2. (Big simplification for TF2 players follows) Also, in TeamFortress 2 (Valve's biggest virtual economy), it's difficult to farm gold. Logged in players receive 1 gold/hr, capped at a max of 10 gold/week. It's possible to create new accounts, and run all of them concurrently, but the expected gain is fairly low, and you have to pay Valve real money for the privilege of having extra accounts. The exchange rates are also totally asymmetric. The exchange rate for money into gold is approximately $1 => 81 gold. The exchange rate for gold back into real money is ambiguous. There isn't a liquid market here. It involves finding rare in-game hats that aren't sold in the valve store, and selling them on e-bay for $100-$400. The hypothetical gun might cost $2 on the valve store, but 1 gold in game (i.e less than 1% of the store price). This strongly incentivizes players to trade in-game. It's possible to make a profit by trading with humans, but that's labor intensive (because you have to find the player and haggle), and probably seen as a positive for Valve, because the traders are providing liquidity.
- prezjordan 14y ago
  But not every item is available in the store. The ones that aren't - unusual hats, super-rare "glitch" items, community weapons - sell for hundreds and hundreds of dollars. One such "glitch" is known as a "vintage scrap metal" which only a few exist in the game. They popped up when a user would delete their metal and ask valve to put it back, when they did, it showed up as "vintage scrap metal" with blue text. Such metal has sold for over $1,000. I feel much of the TF2 economy (these items that can't be bought in a store) is simply players holding onto the weapons and working together to sky-rocket the price. Now, people refer to a "spreadsheet" which is set by a group of individuals. Everyone follows this spreadsheet religiously. For small items, I think the TF2 economy is very neat. But for rare items? A mess.
  - arohner 14y ago
    After I wrote this last night, I'm now leaning towards the idea that the "rare item" economy is intentional, and working as designed. In effect, by making it difficult to turn virtual gold into money, and allowing rare items to sell on EBay, Valve is paying a small number of traders to provide a liquid market. I'm aware of the spreadsheet, but I think you overstate its importance. Sure, people are aware of the book value, but just like real life, people pay more or less than the book value according to their desire.

goombastic 14y ago

I guess I would be interested in a truly economics oriented game that modeled nations without it being about wars, raids, guilds, spells etc. Not sure if something like that exists though.

akavi 14y ago
I've heard EVE online described as such. Well, not so much spells, since it's space oriented rather than fantasy, but it does have a complicated, realistic economy with corporations, wars, and economic exploitation.
kd0amg 14y ago
It seems like the game would need some sort of non-utopian conflict-driven backdrop to create enough desire for whatever products for there to be an interesting economy.
- goombastic 14y ago
  That's an interesting observation. I wonder if that's true of normal economies as well and that final agents of economy, people, would ideally want in-game/in-life situations in which they can "win" for value to be produced.
flyinRyan 14y ago
Second life doesn't fit the bill?
ricree 14y ago
A Tale in the Desert is probably the closest I know of. Its player base is limited compared to most MMOs (around 1000-2000ish, last I looked), but it's a combat free game centered around economic production. It's also a bit unusual in that it has no in game currency. The last time I played (a bit more than 5 years ago), it was largely a barter economy. However, there was a player run item exchange whose credit functioned as a defacto currency. I have no idea what the current state of the game is, but if you're curious about a non-combat economic MMO, it's worth taking a look at.

xb95 14y ago

I worked at CCP when they hired Eyjólfur. He came in without really knowing a lot about the game world and made it his first job to learn as much as he could about how the world actually worked. Given that I was a foreigner who was working and living in Iceland, I didn't have much of an evening social life. I was also one of the relatively few employees (sadly) that were really active in the game in the advanced levels of play -- 0.0, empire wars, etc. Eyjólfur spent a bunch of evenings sitting with me while I played internet spaceships. He asked tons of questions and really got to learn the universe, or at least my corner of it. It was really interesting to work with him and hear him talk about his thoughts as he was putting them together. CCP used to publish the Quarterly Economic Newsletter, like this: http://cdn1.eveonline.com/community/QEN/QEN_Q3-2010.pdf http://cdn1.eveonline.com/community/QEN/QEN_Q3-2010.pdf They've since stopped doing that, but you can see from that example that it used to be a fantastic resource. If you wanted to know the nitty-gritty details about the universe of EVE Online, the QEN was hard to beat.

creamyhorror 14y ago
[edit: reposted as top-level comment; I apologize for the repetition] CCP's economist's reports are the real deal. The EVE game economy is I dare say more developed and complex than most other games' - it has many kinds of input factors and stages of production, and many of the production facilities/resources are player-controlled and their fate determines on political maneuvering, war and sabotage between player corporations (guilds). The price of most items in EVE (ships, weapons, components, structures) is determined by the state of production and speculation in the economy, so CCP has to consider the economic impact of nearly every single change they make to the game world. If any of you folks are interested in reading about a truly fascinating, active digital economy, you have to read the EVE economic reports and other investigations of EVE. It's like reading about mining, manufacturing and stock markets - against a background of eternal war between corporations - in far-future space. edit: links to additional content ----- http://pc.gamespy.com/pc/eve-online/855380p1.html http://pc.gamespy.com/pc/eve-online/855380p1.html >>> EVE Online was developed to have a very dynamic economy from the very beginning. It was decided that "time" would be treated as a valuable player resource: for that reason, raw materials were spread all over the galaxy map, which takes hours to traverse. This created regional pricing. Interestingly, there were no trade hubs built into the core game design -- players gradually settled into certain areas and made their own pockets of population where trade thrived. >>> Gudmundsson had some fun examples of how intelligent virtual economies can be. He showed a graph displaying the prices of a mineral in the game known as Zydrine. Zydrine is hard to find in the EVE universe, but players had discovered that killing a certain class of drone often leaves behind Zydrine in the wreckage. This hole in the market led to lots of drone-farming, and subsequently the price started to drop. Drastically. The developers decided to tweak the drop rate and this change rolled out onto the test server, unannounced, and mixed in with all sorts of other tweaks. Still, clever players noticed the change. Word got out. And suddenly, even though nothing had yet been done on the live server, prices for Zydrine spiked dramatically. Markets make for great predictors of future events! ---- http://blogs.wsj.com/economics/2010/06/21/real-economist-takes-lessons-from-virtual-world/ http://blogs.wsj.com/economics/2010/06/21/real-economist-tak... >>> One of his team’s first big findings is somewhat sensitive. Confirming decades of gender research by economists, sociologists and anthropologists, Mr. Turpeinen’s group found that the same biases that have historically favored men in the real world exist in a virtual economy. Their research demonstrates that both women subscribers and female avatar characters operated by male subscribers in EVE are biased toward a slightly lower chance of success in competition with their male counterparts.

zackbelow 14y ago

This is awesome.

sp332 14y ago

Which two economies were being merged?

lwat 14y ago
I'm guessing TF2 and Dota 2?

petitmiam 14y ago

Fascinating read, just like many of the other Valve blogs. Though, I do wish this guy could explain why real-world money Steam games in the US are often half the price of those in Australia/Europe.

objclxt 14y ago
Advertised prices in $ exclude sales tax, because for most states it isn't levied on digital downloads. However, VAT in EU countries (don't know about Australia) is included in the price. This causes a fairly substantial discrepancy, as VAT can be rather high (in the UK, 20%). Other discrepancies can usually be put down to exchange rate fluctuations, which with the recent financial issues in Europe have been somewhat unstable.
- neotek 14y ago
  Regarding Australia, our GST is a flat 10%, and the AUD is near parity with the USD (and has been above parity for most of the last 12 months). The price discrepancy is far greater than it should be if those were the only factors. The Australian Competition and Consumer Commission, an independant regulatory body in Australia that oversees the Trade Practices Act (among other things), is in the process of inquiring into the so-called "Australia Tax" to find out why companies like Apple and Valve charge far more for software sold in Australia than in other countries despite the low true cost difference.
  - inopinatus 14y ago
    The ACCC is pissing in the wind. It's just a matter of geographic price segmentation to maximise revenue. End of story. Also, end of legal challenge: * there's no violation of free trade agreements, which are about governments dropping barriers like tariffs and quotas and confer neither rights to individuals nor obligations on businesses, and * there's no violation of individual rights, because country-of-residence is not a protected class, unlike gender/orientation/skin colour/race/disability.
- cube13 14y ago

neilk 14y ago

Complete tangent, but I noticed that on Yanis Varoufakis' blog, the current entry is his interview with Max Keiser. http://yanisvaroufakis.eu/2012/06/15/ponzi-austerity-interviewed-on-the-keiser-report/ http://yanisvaroufakis.eu/2012/06/15/ponzi-austerity-intervi... What's the connection? Max Keiser sounds exactly like the defective turrets from Portal 2. Coincidence?!

katsaroles 14y ago

A bit of a background: Varoufakis is something of a celebrity in Greece for being one of the first and the most vocal economists to speak out against the European strategy for resolving the Greek sovereign debt crisis. His predictions have proven to be tragically spot on so far, although it remains to be seen whether his proposal for renegotiating the European bailouts, a proposal that the left-wing SYRIZA political party (which has about 50% chance of winning in the Sunday elections and has allegedly asked Varoufakis to be its economic advisor) has stood behind, is actually a realistic one. He fled to the US and Valve after the doctoral program in Economics he had built in the University of Athens was dismantled during the crisis and after he started receiving death threats by people who weren't particularly thrilled with his opinions.

deleted 14y ago
[deleted]
msfd 14y ago
You seem to know a little bit about this gentleman than I (and the rest of HN probably) know, could you tell us more about his (correct) predictions ?
- starpilot 14y ago
  I found this snippet from 24 May on BusinessWeek: http://www.businessweek.com/articles/2012-05-24/greeces-brain-drain-has-begun http://www.businessweek.com/articles/2012-05-24/greeces-brai... > By the end of 2011, Yanis Varoufakis was a celebrity. The director of the Ph.D. program in economics at the University of Athens, Varoufakis had been arguing for two years that Greece was insolvent and the country should default while staying in the euro region ... In 2006, Varoufakis gave a talk in Athens predicting a financial crisis that would start in U.S. real estate, move through Wall Street, and on to Greece.
- antman 14y ago
  I have attended one lecture-seminar-debate for economists. He was a spokesman and his ideas can be summarized in 2010 here [1]. His work regarding european crisis [2] [1]:http://yanisvaroufakis.eu/2010/12/17/the-modest-proposal-in-600-words/ http://yanisvaroufakis.eu/2010/12/17/the-modest-proposal-in-... [2]:http://yanisvaroufakis.eu/euro-crisis/ http://yanisvaroufakis.eu/euro-crisis/

DanielBMarkham 14y ago

Four years ago one of my first startup ideas I pursued was setting up an arbitrage between virtual economies. I believed then (and still believe) that it is a huge chunk of the future. Everything that is tangible now will become software and intangible in the future. That means the virtual economy is set to eclipse the current one. I spoke with some somewhat famous startup-type people; several I met on HN. None of them seemed interested in my pitch (I was looking for a cofounder). One basically said "I've already got my FU money. This just doesn't excite me that much." I'm looking for some cool things to happen in this space over the next decade. When I was kicking this around we had all sorts of things we wanted to try. It'll be interesting to see if any of them come to fruition. One of the key questions in this space is whether it's even possible to manage virtual economies as this guy wants to do, or it there's always some level of abstraction that's remains out of reach. My money says the thrill of being able to finally experiment will be short-lived. Odds are each economy we create with gaming rules will simply be a small subset of a much larger informal economy. Cool stuff.

unimpressive 14y ago
Interesting. I have some questions. (If you don't mind answering.) > Everything that is tangible now will become software and intangible in the future. When you say this what exactly do you have in mind? Virtual reality? Living substances made through bio-hacking? > or it there's always some level of abstraction that's remains out of reach. What sort of abstraction do you feel would be prohibitive in this environment? > That means the virtual economy is set to eclipse the current one. In what capacity? Like bitcoin, or like for the win[0]? [0]: http://en.wikipedia.org/wiki/For_the_win http://en.wikipedia.org/wiki/For_the_win Thanks in advance.
- DanielBMarkham 14y ago
  Manufacturing of tangible goods will become a commodity as 3-D printing becomes mainstream. In addition, many services that were verbally or physically contracted will be handled completely in virtual reality. Think home robots cutting hair, or auto-drive cars. And as you point out, that's not even touching bio-hacking, which is also converging to digital/created lifeforms. Call me cynical, but this article struck me as nerd candy. It's a totally-awesome idea: we finally get to really measure and experiment with economies! But in my research several years ago I was already uncovering hundreds of millions of dollars in a virtual goods black-market. People will take a character of yours and spend all of their time leveling him up and getting lots of goodies. Then you log in and take over. You pay them through some back channel. Or you leave an item where somebody else can pick it up, etc. No matter how you design a virtual world, there are plenty of ways to make economic transactions outside the walls. The illusion that you somehow have a god-like view and can see and observe everything of important is just that, an illusion. But I'm willing to wait a few decades for the economists to figure that one out :) The virtual economy will merge along multiple different lines. I don't think there's any one answer here. There's no reason your WoW character can't be traded for BitCoin and used as a downpayment on a VR piece of real-estate that you then later sell at a profit for options on a futures market in some rare item coming out in a game next year. Thinking in a linear fashion can really handicap the possible solution sets out there.

dkarl 14y ago

an economy where we do not need statistics since we have all the data! I simultaneously feel his elation and am mystified. If you have such a quantity of data that you must relate to it via statistics, how is that better than only having the statistics? Is it because you can define and calculate your own creative statistics, or...?

creamyhorror 14y ago
Off the top of my head: you no longer need to sample to obtain your statistics, and you can obtain good statistics on virtually everything and every sub-component of the economy, sliced every which way, as many times as you like -- which is much harder in the real world. You can't just go out and gather information on sales of all red, oblong widgets in shops owned by couples aged 50-60 with one dog and one cat -- but you can in a game economy. Basically it's a huge data laboratory where you are able to record every transaction in the world, and work from there. That's massively useful to economists, because they can now test a far wider range of hypotheses and, furthermore, eliminate them much more quickly.
- yk 14y ago
  Even the real data should contain noise, compared to a true hypothesis. For example, you could predict that a certain (for the purpose of the example, small) percentage of all players will buy a certain ship. But many of them just stop playing by chance, then your prediction fails even if the underlying theory is correct. [1] I believe the main advantage is, that you can get rid of sampling bias. So you can look at the entire economy, not only on the part which is willing to answer a poll. For a nice real world example see [2]. [1] https://en.wikipedia.org/wiki/False_negatives#Type_I_error https://en.wikipedia.org/wiki/False_negatives#Type_I_error [2] http://neuroanthropology.net/2010/07/10/we-agree-its-weird-but-is-it-weird-enough/ http://neuroanthropology.net/2010/07/10/we-agree-its-weird-b...
  - lotharbot 14y ago
    > "But many of them just stop playing by chance" I suspect this will be one of the significant weaknesses in trying to translate anything learned in a game economy into real economies. You have much better data in a game economy, but people do grow bored or decide they're just not good enough, and move on. Or people decide they've taken a stupid path and reset their account, and build from scratch. In real life, most people try to keep living even if they're at the bottom end of the economy and don't have the means to change that. This strikes me as a fundamental difference between the virtual and the real.

creamyhorror 14y ago

Among virtual economies, EVE Online's economy is the real deal. The EVE game economy is I dare say more developed and complex than nearly any other games' - it has many kinds of input factors and stages of production, and many of the production facilities/resources are player-controlled and their fate determines on political maneuvering, war and sabotage between player corporations (guilds). The price of most items in EVE (ships, weapons, components, structures) is determined by the state of production and speculation in the economy, so CCP has to consider the economic impact of nearly every single change they make to the game world. (They hired their in-house economist in 2008 IIRC.) If any of you folks are interested in reading about a truly fascinating, active digital economy, you have to read the EVE economic reports and other investigations of EVE. It's like reading about mining, manufacturing and stock markets - against a background of eternal war between corporations - in far-future space. EVE Quarterly Economic News, by CCP's economist Eyjólfur Guðmundsson (link courtesy of xb95): http://cdn1.eveonline.com/community/QEN/QEN_Q3-2010.pdf http://cdn1.eveonline.com/community/QEN/QEN_Q3-2010.pdf edit: links to additional content ----- http://pc.gamespy.com/pc/eve-online/855380p1.html http://pc.gamespy.com/pc/eve-online/855380p1.html >>> EVE Online was developed to have a very dynamic economy from the very beginning. It was decided that "time" would be treated as a valuable player resource: for that reason, raw materials were spread all over the galaxy map, which takes hours to traverse. This created regional pricing. Interestingly, there were no trade hubs built into the core game design -- players gradually settled into certain areas and made their own pockets of population where trade thrived. >>> Gudmundsson had some fun examples of how intelligent virtual economies can be. He showed a graph displaying the prices of a mineral in the game known as Zydrine. Zydrine is hard to find in the EVE universe, but players had discovered that killing a certain class of drone often leaves behind Zydrine in the wreckage. This hole in the market led to lots of drone-farming, and subsequently the price started to drop. Drastically. The developers decided to tweak the drop rate and this change rolled out onto the test server, unannounced, and mixed in with all sorts of other tweaks. Still, clever players noticed the change. Word got out. And suddenly, even though nothing had yet been done on the live server, prices for Zydrine spiked dramatically. Markets make for great predictors of future events! ---- http://blogs.wsj.com/economics/2010/06/21/real-economist-tak.. http://blogs.wsj.com/economics/2010/06/21/real-economist-tak.... >>> One of his team’s first big findings is somewhat sensitive. Confirming decades of gender research by economists, sociologists and anthropologists, Mr. Turpeinen’s group found that the same biases that have historically favored men in the real world exist in a virtual economy. Their research demonstrates that both women subscribers and female avatar characters operated by male subscribers in EVE are biased toward a slightly lower chance of success in competition with their male counterparts.

mrose 14y ago

Maybe it's getting late, but I think i could really use an upvoted tdlr for this...

bmelton 14y ago
This isn't Reddit, and that sort of behavior here is actively discouraged.
- mrose 14y ago
  My comment was sincere and I stand by it. The article was quite long and I've often seen similar summary comments for such articles here on HN. I think for really in depth articles it helps to have a good overview before commiting time and diving in (something more than an obscure title and the valve.com domain). In this case, I was initially under the impression that it was part of an ARG, a topic I am very interested in. I should also note that I don't see anything in the guidelines about asking for a summary.
  - bmelton 14y ago
    I don't disbelieve your sincerity, but was simply stating that we discourage the notion of of "TL;DR" here, as a community, whether or not it's in the guidelines. It's also not in the guidelines (as far as I can tell by skimming) that your comments should further the conversation, but that is another ideal to which the community at large has agreed to aspire. We collude to keep comments on topic and interesting, because that's what the community wants and needs. I wasn't casting judgement on your post but, as I noticed you were new, thought I'd offer it as advice. On a personal note, especially with articles like this, if you are interested in the topic at hand, read the article. There really isn't any good substitute.
pbhjpbhj 14y ago
Valve hired a well-known economist. Symbiosis occurred.
deleted 14y ago
[deleted]

sams99 14y ago

If anyone from valve is listening, would really appreciate it if you added commenting support to your blog, I am looking forward to this series of articles, it is a very interesting and unique space.

juan_juarez 14y ago
Have you ever read the WoW forums (or any other official game forum)? The signal to noise ratio is absolute crap. The first few pages would be people saying "first!" and it goes downhill & off-topic from there. We're talking about a site with 10M subscribers, all of them focused on a single piece of official correspondence, wanting their chance to get attention. It would be absolutely useless & provide zero opportunity for intelligent dialog. If anyone from Valve is listening and wants to open discussion, they would do better to interact with 'higher quality' communities directly.

lhnn 14y ago

>the notion that a computer game company has surreptitiously and quite spontaneously created virtual economies that it comprehends as ‘economies’ (which deserve study and regulation) was enough to write back instantly Does this man believe we should have legal regulation of game economies? Oh wow.

ezy 14y ago
I think he's referring to the regulatory control Valve exerts over the virtual world.
swombat 14y ago
Do you believe we shouldn't? Assume an economy can be sized... so it's a $100m economy, or a trillion-$ economy, etc. Connecting economies together obviously causes them to impact each other. So long as games are connected just to the US economy, and it is much, much larger than any game economy, the impact on the "real" economy is nil. What about a much smaller real economy? Connect an economy the size of Eve or WoW to one the size of Zimbabwe. Suddenly, events in the game can have very real macro-economic effects on the "real economy". For example, uncontrolled creation of "wealth tokens" can lead to inflation, and contaminate the real world just in the same way as currency fluctuations impact the real world. Banks can create money, and they are regulated. If virtual economies can create money on a scale large enough to disrupt the real economy, shouldn't they be regulated too? I'm not saying the answer is obviously one way or the other, but to dismiss the question with an "Oh wow" seems very short-sighted.
- nemo1618 14y ago
  That's a good point. I hadn't really thought about virtual economies like WoW or Eve as similar to the Fed in that they can essentially print money.
  - saraid216 14y ago
    Only for their given domain. Blizzard and CCP are free to make as much gold and ISK as they want (and they do; it's a faucet-drain economy, and the faucet does not get shut off). But the quantity and buying power of said currencies change its value in relation to real world money. So saying they can print money is not really true; they can control the value of a particular good that isn't intended to be a good.

Joss451 14y ago

For the sake of Pete, someone remove the parens from this man's keyboard.

pilsetnieks 14y ago

Reminds me of Neal Stephenson's Reamde and the T'Rain geology

wglb 14y ago

An interesting resonance with Charls Stross's Halting State.

stretchwithme 14y ago

An economist finally admits it why they fail so much. "let’s face it: Econometrics is a travesty! While its heavy reliance on statistics often confuses us into believing that it is a form of applied statistics, in reality it resembles computerized astrology" "the reason for this unavoidable failure? None other than our inability to run experiments on a macroeconomy" The theories are never tested. They just get implemented. A thousand other things are happening at the same time and its impossible to get anything approaching the clarity of a double blind experiment. But the adherents act as if they've got exactly that.

tatsuke95 14y ago
>"An economist finally admits it why they fail so much." What do you mean by "so much"? Because they can't accurately, regularly predict the future? I think you'll find that, in reality, economists know their fallibility and limitations. It's the proletariat that doesn't understand the under-pinnings and assume economists should be 100% accurate when they make predictions, and are upset when they are not.
- stretchwithme 14y ago
  We're not in the current crisis because the people expect 100% accuracy from economists. Its that economists have bad theories. Most economists fail to offer theories that accurately describe reality. Keynesian is the current disaster. And politicians can only pick from the available theories and tend to pick the most shortsighted of policies, as they are trying to get re-elected. Its not that a bunch of unforeseen events have occurred. Its that theories being followed are bad. They ignore many very real things. And the consequences that most economists have been denying all along are happening. For example, they analyze the multiplier effect government spending but ignore the effects of removing those resources from other parts of the economy. They don't analyze what happens where the resources are being taken away. But those resources are real things that people no longer have and cannot use.

Tichy 14y ago

What games does Valve have that have virtual economies?

tvorryn 14y ago
Team Fortress 2 and DOTA 2 are the ones I know of. http://en.wikipedia.org/wiki/Team_Fortress_2#Free-to-play http://en.wikipedia.org/wiki/Team_Fortress_2#Free-to-play http://en.wikipedia.org/wiki/Dota_2#Free-to-play http://en.wikipedia.org/wiki/Dota_2#Free-to-play
- chmike 14y ago
  One can exchange items, but not sell them. There is no money account in TF2. So I don't see any relation with a real life economy.

nmutua 14y ago

i think the gaming sector with its virtual economies is a very good representive for "real" economies. in both economies it's all about feeling, very irrational. many panics and hypes. it's a bold move by valve to hire an economist-in-residence. they are going for the big shot