virtual economics

["Perelman, Michael" <MPerelman@xxxxxxxxxxxx>]

Today, NPR had a feature about this paper, probably stealing the idea from Slate.  It is surprising how few original ideas they come up with.

I found the discussion interesting in that it added another dimention to the concept of ficticious value.

I still cannot receive mail, including pen-l, at my usual address.


Virtual Worlds: A First-Hand Account of Market and Society on the Cyberian Frontier
 

EDWARD CASTRONOVA 
California State University, Fullerton - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)


December 2001 

CESifo Working Paper Series No. 618  
 

Abstract:      
In March 1999, a small number of Californians discovered a new world called "Norrath", populated by an exotic but industrious people. About 12,000 people call this place their permanent home, although some 60,000 are present there at any given time. The nominal hourly wage is about USD 3.42 per hour, and the labors of the people produce a GNP per capita somewhere between that of Russia and Bulgaria. A unit of Norrath's currency is traded on exchange markets at USD 0.0107, higher than the Yen and the Lira. The economy is characterized by extreme inequality, yet life there is quite attractive to many. The population is growing rapidly, swollen each each day by hundreds of emigres from various places around the globe, but especially the United States. Perhaps the most interesting thing about the new world is its location. Norrath is a virtual world that exists entirely on 40 computers in San Diego. Unlike many internet ventures, virtual worlds are making money -- with annual revenues expected to top USD 1.5 billion by 2004 -- and if network effects are as powerful here as they have been with other internet innovations, virtual worlds may soon become the primary venue for all online activity. 
Keywords: Information and Internet Services, Computer Software 

 

JEL Classifications: L86  

http://papers.ssrn.com/sol3/delivery.cfm/SSRN_ID294828_code020114590.pdf?abstractid=294828
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Michael Perelman
Economics Department
California State University
Chico, CA 95929