Game Theories

Castronova is a natural role-player. He’s a short, nebbishy guy with a neat goatee and horn-rimmed glasses. When he lectures he radiates charisma; he is the cool professor you wish you’d had when you were trying to grasp the dry mechanics of price theory. Until recently, he acted in a Shakespearean troupe, and in his spare time he explores the world of “multiple-user domains”—Internet chat environments where people assume different personae as they hang out together.

Castronova suspects his eclectic background is why he never made the powerful connections necessary to secure a good academic job. “I’ve always been an outsider. I’ve just been floating around outside communities, sort of flitting from topic to topic,” he said.

With virtual worlds, he had finally hit upon a subject that was exploding into the mainstream. Experimental online worlds had been kicking around for years but they took a leap forward in 1997, when Ultima Online—a medieval fantasy world similar to EverQuest—launched, and quickly amassed a hundred thousand users. The idea of having a second life online suddenly didn’t seem so geeky or, at the very least, it seemed a profitable niche; companies like Sony and Microsoft swarmed online. Today there are more than fifty active games worldwide and anywhere from two to three million people playing regularly in the US. The games range from Star Wars Galaxies (where you can wander around as a Wookie and fight the Dark Side) to There.com (where you can wander around Disneyfied islands as an attractive Gap-style model and admire your hot new body). In Korea, a single game called Lineage claims more than four million players.

To figure out precisely who was playing EverQuest, Castronova persuaded 3,500 users to fill out a survey. As one might expect, the average age turned out to be twenty-four, and the players were overwhelmingly male. The amount of time spent “in game” was staggering: over twenty hours a week, with the most devoted players logging six hours daily. Twenty percent of players agreed with the cheeky (if alarming) statement “I live in Norrath but I travel outside of it regularly”; on average, each of these “residents” possessed virtual goods worth about $3,000. “When you consider that the average real-life income in America is only, like, $37,000,” Castronova tells me, “you realize these people have a non-trivial amount of wealth locked up inside the games.”

When he finished his research, Castronova assembled it in a paper called “Virtual Worlds: A First-Hand Account of Market and Society on the Cyberian Frontier.” He submitted it to an academic website, the Social Science Research Network, that distributes working papers, free for anyone to read. The site has 43,982 papers by more than 37,000 authors. He didn’t expect too much. “I thought maybe seventy-five people would read it,” he recalls, “and that’d be great.”

He was wrong. The paper sent a shock wave through the online world. EverQuest players pounced on it and wrote up excited descriptions on game-discussion boards. That led to a flurry of posts on popular blog sites. Soon, academics and pundits in Washington were rushing to read it. Barely a few months later, Castronova’s paper became the most downloaded paper in the entire database—beating out works by dozens of Nobel laureates. Today, it’s still in the top three.

Why the rush of interest? What can a game filled with elves and warrior dwarves tell us about the real world?

Quite a lot, if you believe the economist Edward Chamberlin. In 1948, Chamberlin admitted that all economists face a critical problem: they have no clean “laboratory” in which to study behaviour. “The social scientist . . . cannot observe the actual operation of a real model under controlled circumstances,” he wrote. “Economics is limited by the fact that resort cannot be had to the laboratory techniques of the natural sciences.” Instead, classical economics tries to predict economic behaviour by theorizing about a completely fair marketplace in which people are rational actors and all things are equal.

The problem with this—as plenty of left-wing critics have pointed out—is that all things aren’t equal. Some people are born into rich families, and blessed with great opportunities. Others are born into dirt-poor neighbourhoods where even the most brilliant mind coupled with hard work may not forge success. As a result, economists have warred for centuries over two diverging visions. Adam Smith argued that people inherently prefer a free market and the ability to rise above others; Karl Marx countered that capital was inherently unfair and those with power would abuse it. But no pristine world exists in which to test these theories—there is no country with a truly level playing field.

Except, possibly, for EverQuest, the world’s first truly egalitarian polity. Everyone begins the same way: with nothing. You enter with pathetic skills, no money, and only the clothes on your back. Wealth comes from working hard, honing your skills, and clever trading. It is a genuine meritocracy, which is precisely why players love the game, Castronova argues. “It undoes all the inequities in society. They’re wiped away. Sir Thomas More would have dreamt about that possibility, that kind of utopia,” he says.