Economic lessons from online computer game

Eyjolfur Gudmundsson, a man with a doctorate in environment and resource economics from the University of Rhode Island, was recently hired to study inflation, direct monetary growth and gather information about the economy. Unlike most economists, however, Gudmundsson’s job is to monitor an entirely fictional universe. It’s the world of Eve Online, a science fiction game with almost as many players as Iceland has citizens.

Based in Iceland, Eve Online boasts some 200,000 players and hopes to increase that number by 50 per cent by the end of the year. The game is run by CCP Games, the group that hired Gudmundsson as their newest chief economist.

“There’s a lot of discussion in the game about inflation and that is my job, to find out if inflation is going on,” said Gudmundsson.

The game is set in a fictional universe in which players compete to control interstellar space, resources and battle equipment on behalf of large corporations. In order to succeed in the game, an increasing number of players want information about Eve’s economy.

“This makes the consumers behave in a more natural way because they are competing against each other on multiple levels, not only on a tactical level in combat but for logistics and resources. That builds consumer behaviour and patterns that you see in the real world,” Gudmundsson said.

In the game, players mine raw materials for money. The unit of currency in the game is the interstellar kredits, known as ISKs, a play on Iceland’s national currency, the krona.

Unlike government policy makers who must formulate economic plans based on incomplete or unreliable data, Gudmundsson has all the data about Eve he needs captured by the computers who run the game.

“As a real economist I had to spend months trying to find data to test an economic theory but if I was wrong, I wasn’t sure if the theory was wrong or the data was wrong. At least here I know the data is right,” Gudmundsson said.

Managing inflation in the game is one of Gudmundsson’s task. Another is discovering if lessons learned from the virtual economy of Eve are applicable in real life. Since it is so difficult to monitor the complex number of variables in a nation’s or even an industry’s economy in reality, a computer game like Eve could potentially give a lot of information about the inner workings of monetary systems.

Guodmundsson himself would not say if he thought his work would help CCP in the real financial world but he did say, “I strongly believe that in future we will look to virtual worlds to see how things have evolved in that world and apply that to a real-world situation.”