Virtual Economies Remain Badly Flawed Research Tools

1229493866106_us_backyard1_997 There's been a lot of work done on virtual economics over the past few years, from Indiana University studies to the Virtual Economy Research Network.

These researchers all use virtual economies as a test-bed for real-world economic policies, as well as testing grounds for real-time experiments on price, economic growth, and wages.

They had best be cautious. As Pixels and Policy reports, virtual economies are far from the hailed research tools some virtual world cheerleaders think.

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Why Do People Pay Real Cash for Virtual Items?


Here's a question many researchers have stumbled over at one point or another in their careers as pioneering virtual world analysts: Why do people pay real money for virtual items?

Pixels and Policy takes a look.

Digital Growth, Real Revenue

The virtual economy is certainly more than an aberration, and with Second Life bringing in nearly $500 million a year in virtual sales alone, the virtual economy may even be doing better than the real economy!

A new report published in the Virtual Economy Research Network argues that Second Life and other virtual worlds have such healthy real-to-virtual economies because of one main factor: social pressure.

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Manual Labor in Virtual Worlds: How Fair Are In-Game Auction Houses?

One of the most frustrating times in an MMORPG player's digital life is "grinding" for experience to attain a game's highest levels. This often entails killing hundreds – if not thousands – of enemies over the course of days and weeks to obtain a small advance in the character's level and vital statistics.

But what happens when in-world auction houses like those in World of Warcraft, EVE Online and other games allow time-strapped players to contract out portions of quests to be completed by others in exchange for money?

Pixels and Policy looks at some interesting emerging research on the subject.

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New Study: Women Spend More Time in Virtual Worlds Than Men

USC Logo Pixels and Policy has looked at how gender idealization pushes some women to oversexualize their avatars, but it doesn't seem to be dissuading girls from gaming.

A new study by University of Southern California Professor Dmitri Williams shows that women spend more time in-world than men despite being in the minority of total gamers.

Pixels and Policy takes a look.

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Why Are Virtual Currencies Deflating Across the Board?

Virtual-currency-exchange With both "free to play" and subscription virtual worlds expanding their memberships year-over-year, many analysts have found a productive hobby analyzing the fluctuations of various major Metaverse currencies.

Pixels and Policy takes a look at some work published by University of Manchester researcher Richard Heeks that purports to show a persistent devaluation of virtual currencies relative to the U.S. Dollar.

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Discussion: Is Virtual Consumerism Built on Social Pressure?

We wrote an article last week that asked whether virtual world consumerism is essentially a product of social pressures. In support of our opinion, we cited an article from the Virtual Economy Research Network that made the case. One of its better points:

Beyond individual appearance, consumption can also be associated with
group membership and belonging.

Through their visibility, items of
virtual clothing, accessories, and full avatar skins serve as marks of
membership within particular groups.

Bank1 What the article is saying is something anyone who went through high school would know: It's a whole lot easier to be accepted by a (virtual) social group if you look the part.

For the most part, Second Life's furries hang out with other furries, and someone dressed in a Steampunk outfit will likely have a difficult time being accepted.

Well, our article caught the eye of my friend and critic Dusan Writer, who took us to task and inspired a lively debate on his website. 13 posts later, its apparent there's a clear divide between those who view the consumerism in Second Life as a product of social pressure and those who view it as a means of digital self-expression.

But what kind of social pressure is it that makes self-expression dependent on purchasing things? This sentiment is inherent in Dusan's argument that consumerism is self-expression: Second Life avatars are expected to express themselves through what they've purchased, and the in-world society gives positive feedback to avatars that look especially attractive due to their purchases.

Though this pressure may not be visible, it certainly is a social pressure. The unspoken need for people who associate with the Furry mindset to purchase Furry outfits in order to participate in Second Life group activities is evidence of this. Furries who show up looking human will find a much different atmosphere than their fox-eared companions.

I'd like to keep this discussion going — post your thoughts and I'll follow up through the week as the discussion develops.