One decade ago, Edward Castronova woke economists up to the fact that virtual worlds like Everquest contain legitimate economies, and suddenly everyone was talking about them as living economic laboratories. I’m interested in how such worlds can cast light on our political economies, and particularly the question of what’s fair and what’s just.
This NPR Planet Money podcast (“From Harvard Economist to Casino CEO“) about how Caesars Entertainment Corporation’s CEO, a former Harvard Business School professor, Gary Loveman, uses empirical data to shape the gaming experience. Yes, this is “gaming” as in gambling, but the relationship to Farmville and World of Warcraft is more than semantic. Just like WOW and other online games, modern casinos have access to a deep amount of data about user behavior through their rewards cards. But unlike Blizzard, Caesars cannot tweak its formula to guarantee particular results — for example, making sure that newbies win enough to keep them coming back. They can know who all the flailing newbies are, though, and dispatch employees to make things right for them (e.g. comp them some extra coins, dinner, or a limo). As Loveman observes, the goal is to comfort the newbies who fall into the low “long tail” of gambling returns.
Caesars’ approach to resource allocation has interesting implications for what a just distribution of resources might entail in a larger game – the game of our real economy. After all, Caesars isn’t providing a safety net for losers because they care — they do so because it’s good for business. Companies like Blizzard and Zynga are similarly tweaking their rules constantly to ensure maximum profitable participation rates. How might what they are learning inform the way we think about the rules of our political economy? Can game worlds – whether Caesars Palace or Azeroth – provide a Rawlsian space to experiment with different notions of “justice”?