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MUD-flation, Cross-Gender Play, and Hobbes: an interview with Edward Castronova
posted by scubacuda on Friday August 08, @07:31PM
from the why-"State-of-Nature"-sucks-a$$ dept.
Internet Governance Edward Castronova, associate professor of economics at Cal State Fullerton, has some keen insight as to what constitutes real value in cyberspace. (Two of Tedís latest contributions to this discussion: research on gender discrimination against female EverQuest avatars and serving as prosecutor Richard Salgadoís expert witness during the Black Hat Conferenceís ďHacker CourtĒ trial.) Being an avid gamer and former Genocide player, I couldnít help but contact Ted and ask how his econ work might apply to Internet-related law and policy issues we discuss here on GrepLaw, as well as the type of government he anticipates emerging in online game-based economies, such as Star Wars Galaxies, EverQuest, and Lineage.

Should mainstream economics journals take his work on gender and virtual economies seriously, Ted promises to eat his virtual hat. (Read on for the entire interview)

Ted, you're doing some very interesting work related to ďsynthetic economies.Ē Your most recent is a paper examining the fact that there are significant differences in the eBay prices of male and female EverQuest avatars even where there are no differences in their abilities. What prompted your interest in economic problems of the kind your current work is exploring?

First, broadly speaking, economics has gotten stale. Itís out of touch with the conversations going on in humanities, art, and even other social sciences, about the nature of social truth. Post modernism certainly hasnít had much effect on economic methods and subjects, thatís for sure. As an extension of that, contemporary econ hasnít seen whatís happening to communications. It hasnít sensed the possibility that the Net may have massive implications for daily life. So, being an avid game player, when I saw a massive online game (EverQuest) with an economy in it, I thought ďHereís something truly unusual, a topic that doesnít fit in econ but definitely fits with the times, and is a blast to study tooĒ and I went for it. The long run objective of this project is to pose a criticism of the scientistic methodology of economics and similarly-inclined disciplines. Social science is as much aesthetic as it is scientific (in my view anyway), and games pose a problem that highlights the inadequacy of a purely scientific, mathematical, objectivist, positivist approach.

As for the male/female pricing paper, it occurred to me that here was a place that ordinary economic methods could be easily deployed to say a weird, paradigm-shifting thing: we can choose our sex. When I found that female avatars were worth less than equivalent male avatars, I thought that posed an interesting question for society: why is it that men, who are the main buyers of these things, would rather be men than women? Lots of people think thatís a stupid question. They say itís natural. But I am wondering why itís natural. There are lots of great things about being female, right? So, as a man, why would I actually pay more just to be male? Why wouldnít the good things about being a woman outweigh whatever bad things there might be, so that I felt equally comfortable as a man inhabiting either male or female avatars in this game world? I do think thatís an interesting question. I donít have an answer. But by posing it, I got a lot of heat. I guess thatís what academics are supposed to do: ask questions that nobody wants to have asked.

Your eBay/EverQuest paper has become one of the most downloaded papers on SSRN, and it was discussed on NPRís Weekend Edition. Tell us about the stir your paper has created. How would you respond to those who doubt that your work on online ďsyntheticĒ worlds can affect policy in the real world?

The stir comes from people who find it weird that anyone would pay real money for what they assume are worthless things. Itís a mind-opener when I point out that they themselves constantly exchange things of real value Ė cars, houses, hours of their time -- for little worthless pieces of paper called Ďdollar bills.í We really want to have this category of Ďgameí and say that itís not important; thatís much more comforting than the thought that the computer is going to host a great deal of our mental activity 100 years from now. Whether this will affect policy in the real world depends only on whether people actually start spending lots of time in synthetic spaces. My guess is that the latent demand for other-Earthly lifestyles is huge, massive. As these new worlds increasingly tap into that latent demand, there will certainly be policy consequences on the old Earth. Anyone who disagrees is free to do so, but they are thereby forced to defend the position that most people just love life on Earth Ė with its strip malls, commutes, telemarketers, and TV Ė and will want to stay here for the most part. I feel much more comfortable with the opposite view, that a lot of mental energy is going to migrate into cyberspace. When it does, policy will change. Thereís nothing any of us can do about it. Buckle your seat belts.

You recently served as prosecutor Richard Salgadoís expert witness during the Black Hat Conference ďHacker CourtĒ trial. Jennifer Granickís defendant, Weasel, was accused of hacking into a fel-low MMORPG player's game account and stealing the legendary "Staff of Viagra,Ē valued at $5,000 on eBay. You testified regarding the real value of virtual goods. What was that experience like? Whatís your assessment of Granickís defense of Weasel: that we might, as a society, decide that it is just too difficult to classify game-related damages as real, just as we shy away from taking cases of lost sexual favors to court, even though there clearly are damages? How do you think cyber-damage claims have changed over the years? What trends related to such claims do you anticipate?

Iím sympathetic to both sides in the case. On the one hand, as an economist, itís impossible for me to deny that there is a real economy inside these game worlds. On the other hand, there are lots of real economies and real values that the government and law essentially ignore. The market for sex is one. Hereís another, more mundane example: in the case of owner-occupied housing, economists have long noted that there is an implicit transaction between the person as owner and the person as consumer of the housing services. Basically, you pay yourself a rent for staying in your own house. Sounds stupid, but thatís actually whatís going on economically. Now, one year the Treasury Department took up this argument and said we should have an income tax on these implicit transactions. While that would have been quite lucrative for the government, everybody in Congress said that it was ridiculous. Rightly or wrongly? Well, I donít know. Thereís a mountain of theory in econ saying that the best way to tax, and to do policy, is to always treat similar things in a similar way. If you have a tax on income, you really should try to tax all forms of income the same way. But practically speaking, what the government is really doing is just trying to tax absolutely everything that moves in the economy. So, while the theorist in me says ďYes, we should have law and taxation and policy in these synthetic economies,Ē the practical/gamer/libertarian in me says ďNo way! Keep the gubmit outĒ To me, though, the most important point is not about what we do about the economy in these worlds, itís about recognizing that the economy is actually there. And the existence of an economy will generate the everything else that we have in society: inequality, government, law, discrimination, and all the rest. Thereís nothing new in the process, itís just happening in a new and very unusual place. We donít know whether the weirdness of the place will have some effect on how the process of socio-political development plays out. Thatís what Iím going to spend my life researching.

A Wired article quoted you as saying that you believe that online game-based economies will eventually serve as the bases for ďreal governments.Ē What do you mean by that? What kinds of governments might you envision? Do you anticipate libertarian ďnight watchmanĒ governments? Activist governments? Or . . .? Why would the emergence of organized societies that enforce law-like norms require the existence of governments at all?

Synthetic worlds are a fascinating thing to watch for anybody interested in political theory. OK, weíve recognized that thereís an economy. That means there are political classes, with resources and both communal and conflicting interests. What governments emerge? At the moment, the governments are basically like families. Think of Sicily: the families acquired power because the ostensible rulers in fact paid little attention to the country and changed identity all the time, all while jealously holding on to many of the resources of ruling. Similar thing is happening in synthetic worlds: the companies reserve the monopoly of force to themselves, but they donít deploy it in any significant way. So, close-knit relationships are the only form of social order. Libertarians take note: Absence of formal government is not paradise, it sucks. Big time. If you donít believe me, go play on one of the orderless player-vs-player worlds like Mordred in Dark Age of Camelot or one of the Zeks in Ever-Quest. You will bend your knee before the Man (these days, Woman) or you will die.

If the virtual economies on which you focus are real, will they come to be affected byóor have they already been affected byórecession, inflation, unemployment, etc.?

Yes, yes, and yes. Recession and unemployment in this context is lack of worthwhile things to do: no way to advance yourself through work, and absence of production of valuable things. This happens all the time in games, and keeps the developers worried about producing enough content. Inflation: well thereís a phenom called ĎMUD-flationí that plagues most of these games. Itís a severe deflation of prices for lower end items accompanied by hyperinflation of upper-end items. Itís a unique situation that happens when the worlds fill up with durable goods and coin. {/shameless plug} I talk about fixing it in my upcoming book, Synthetic Worlds, forthcoming next year from U Chicago Press {/shameless plug}

Of the multiplayer online games currently in existence (e.g., Star Wars Galaxies, EverQuest, Lineage), which do you find the most interesting as an economist?

EverQuestís economy is consistently fascinating, but I am very intrigued with the way SWG is handling its market. They have basically brought Ebay into the game. A brilliant move. {/shameless plug} I talk about some other strategies for dealing with Ebay in my book Ö ehh you get the idea. EVE online is trying to do an economy with the same kinds of institutions (corporations) as we have here. I used to think Project Entropia was going to be interesting, but it seems to be a flop. Other worlds to watch include the non-combat social worlds like There, Sims Online, and Second Life. The gambit with these worlds is that economic and social activity, alone, is enough to bring people in. I tend to think that explicit gameplay Ė puzzles, quests, combat, and so on Ė are critical, but we will see.

The first time I played Diablo II online, I hadnít been logged in for more than a few minutes when someone mowed me down with a machine gun that clearly didnít belong in the online world Iíd entered. How do you think Garrett Hardinís classic ďtragedy of the commonsĒ model applies to video games and online economies? (Think, for instance, about the roles of cheaters and ďplayer killers.Ē) How easy is it for some people to ruin interactional environments intended for everyoneís benefit? What can we do to preserve the digital commons? And do you think eBay has changed peopleís views of whatís monetarily valuable? Has it encouraged commodification in an undesirable way?

The deeper reference is not Hardin but Hobbes. Want to learn about the State of Nature and find out, first hand, why it sucks a$$? Play a PvP server. I do like to deploy Hardin in this conversation, though, especially in reference to the Ebay issue. Ebaying is definitely an erosion of the commons. The games are about atmosphere, in which every player is supposed to start out a pauper and then, through hard work, become a knight in shining armor. So you go into the world and start down that long, long, road, doing your best Horatio Alger impersonation. And then some catass with two computers and three Ebayed accounts comes along and wipes the floor with you. Evidently, the collectivity of the players has a shared interest in controlling activities that wreck the atmosphere of the game. Hence thereís a conflict between the property rights of the individual players, which they vociferously defend, and the communal rights of the entire player base, which I wish the companies would defend more sensibly.

Have you done any interesting consulting work?

Lots. Most I canít talk about. Rest assured that there are a number of communities in Washington very interested in whatís happening in this space.

What are you favorite online discussions or blogs focused on topics related to your scholarship? Who else is doing interesting work in the areas youíve been exploring?

I read Waterthread, a home for extremely disgruntled hardcore MMOG players. And I follow Julian Dibbellís stuff closely. Thereís the MUD-Dev list. Problem is that I am too busy. The success of this topic has made so much work for me that itís cut into my surfing and gaming. A deplorable state of affairs.

I noticed that Julian Dibbell applauded your synthetic world data on his Play Money site. It must be quite difficult to formulate accurate estimates regarding on-line behavior. How do you compile these data?

Recognize that collecting these kinds of data is actually a full time job for tens of thousands of people in national bureaucracies. Iíve been trying to get some solid info on a regular basis, using web crawlers and my own simple observations. Somebody needs to start funding a major statistical collection effort. Iím working up an academic institute that would become the clearinghouse for data collection and analysis of synthetic worlds of all kinds. Clients would include policymakers looking for practical lessons and potential testbeds for their ideas; academics looking for laboratories to do experiments in; and private investors hoping to find revenue streams. Interested readers are encour-aged to contact me.

What other academic work might be of interest to those interested in your recent studies of gender bias in online gaming communities?

Thereís an extensive literature in economics about wage discrimination; check Nancy Folbre and Claudia Goldin for that. Catherine MacKinnon in law. Mainstream and new-alternative feminists are also worth checking out, Paglia, etc. Above all, read Dierdre McCloskeyís testimonial about her sex change operation and how economists reacted to it. One colleague actually signed papers to have her committed. As far as that goes, I guess I really am insane; look at what Iím doing: Iím sending economics journals this paper that not only asks them to take videogames seriously, it also asks them to think about gender identity as a choice rather than an endowment. If this thing ever gets published in a mainstream economics journal, Iíll eat my virtual hat.

Whatís it like being an ďandrogynous bisexual transvestiteĒ?

Oh, itís a blast. Youíre quoting a name I got called by an emailing critic. That kind of name-calling Ė and that was not the worst by any means Ė showed me that asking a tough question about gender identity does get some people very riled up. There are a lot of unsettled issues out there, and, to be honest, I am no exception. Dealing with the legacy of the male/female power dynamics of our families is something my wife and I work on constantly. Itís sad, but with all our economic development, today, in 2003, our society still has not figured out how to teach people to be good to one another. We spend countless hours learning how to work, in mandatory formal education. How much time do we spend in formal schooling learning how to communicate, trust, and especially become self-aware? Zip. Not surprising that there are so many unhappy people out there. And lots of them are turning their sadness, which is ultimately caused by their parents, into a hatred of the opposite sex or of anybody with unorthodox views about the whole man/woman thing. My paper certainly touched a nerve.

Personally, though, playing a female is both fun and a real learning experience. I typically play a very aggressive, very attractive female with lots of attitude (think Linda Fiorentino in The Last Seduction). Itís really interesting to see how men act. Of course, itís a horrifying fact that I see myself in their fumblings; I have absolutely been there. Too often. My wife, the feminist narrative family therapist, thinks it all very funny, and very healthy.

Whatís your preferred platformóWintel, Mac OS, Linux, or . . . ?

Can you even HAVE a preference when youíve been exposed to ONLY ONE ITEM IN THE SET? NO! I am a victim of the Borg. Seriously, testing alternative systems is too costly, but Iím not a very good technologist anyway. I still havenít gotten a blog going, and my mailing list is, eh, rudimentary to say the least.

Thanks for taking the time to talk with GrepLaw, Ted! Please keep us updated on your research and other activities.

Edward Castronova was interviewed by Roger E. Rustad, Jr. (scubacudaNO@SPAMiname,com), contributing editor of the Berkman Centerís GrepLaw.

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  • This discussion has been archived. No new comments can be posted.
    MUD-flation, Cross-Gender Play, and Hobbes: an interview with Edward Castronova | Login/Create an Account | Top | 3 comments | Search Discussion
    The Fine Print: The following comments are owned by whoever posted them. We are not responsible for them in any way.
    Julian Dibbell link (Score:2, Interesting)
    by Anonymous Coward on Saturday August 09, @01:59AM (#1009)
    here [juliandibbell.com]
    [ Parent ]
    Economic systems. (Score:0)
    by Anonymous Coward on Sunday August 10, @02:20AM (#1017)
    Does anybody know if any game has implemented a LETSystem in the game ?

    I think it is a very cold economic system and I would like to see it in a game.

    A LETSystem were the units is based on working time( in seconds) should be usable globally.

    It has some cold features for games like the ability to scale automatic to the number of players.

    The is no inflation becurse there is always just the right amount of LETS units.

    Check out LETSysetm Design Manual [u-net.com] and LETSystem Home Page [u-net.com]

    [ Parent ]

    Humanity has the stars in its future, and that future is too important to be lost under the burden of juvenile folly and ignorant superstition. - Isaac Asimov

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