Boiling Frogs

Video games: an open valve for new economics experiments

June 19th, 2012  |  Published in Beyond the crisis, Crisis routine

So far, I didn’t realize how important video games could be for economics experiments. Online community games, particularly, could provide a large-scale game field for economists that could help us understand human behaviors and experiments new ideas. 

Last week, Yanis Varoufakis was hired by the worldwide video games company Valve. For those who don’t know him, Varoufakis is a greek economist that has become famous with the greek crisis. He has notably written a “Modest proposal for overcoming the euro crisis” (pdf), that include a combination of ECB buyout of bonds up to 60% of each country’s GDP, debts write downs, banking reforms and a EU wide recovery plan.

So, why would Varoufakis be interested in video games? Here is Yanis’ an excerpt post on Valve’s blog (emphasize mine):

In sharp contrast to our incapacity to perform truly scientific tests in ‘normal’ economic settings, Valve’s digital economies are a marvelous test-bed for meaningful experimentation. Not only do we have a full-information set (making sampling superfluous) but, more importantly, we can change the economy’s underlying values, rules and settings, and then sit back to observe how the community responds, how relative prices change, the new behavioural patterns that evolve. An economist’s paradise indeed…

I must say this perspective is quite exciting. Congratulations to Yanis Varoufakis and Valve for this interesting move.
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