In what very well be the beginning of a full circle trend, researchers at Indiana University are now studying and analyzing trends in virtual economies in hopes of better understanding real world economies. MMO’s that attract huge numbers of players, think WoW, Aion, and EverQuest II, all present users with both basic, and sometimes complex economic situations and simulations. As a result Indiana University professor of telecommunications Edward Castonova is now studying these economies, hoping to gain insight into human societies in games, as he believes this response to virtual stimuli closely mirrors that of real world situations.

“We can do controlled experiments in virtual worlds, but we can’t do that in reality,” said Castronova.

“Controlled experimentation is the very best way to learn about cause and effect. We are on the verge of developing that capacity for human society as a whole.”

Taking Sony’s long running EverQuest series, specifically EverQuest II, as it’s case study, Indiana University researchers found that the average age of EQII players is 31, whereas the overall population average is 35. 80 percent of players are male, contrasting to the average of 50 percent, and players skew more Caucasian than the general population. And while the average household income of EverQuest II players is above the average, $84,000 vs. $57,000, this difference should hold no barring on how players react to and instigate financial decisions and actions within the virtual world.

Researchers studied 314 million transactions within EverQuest II’s virtual economy, albeit on only one server, by which they were able to calculate the populations’ GDP. Notably, researchers found that as more accounts were created and the server population, i.e. the mirror of the real-world population, the virtual world saw an inflation spike of over 50 percent in a 5 month period. Fellow researcher Dimitri Williams, assistant professor at the USC Annenberg School for Communications points out that this run of inflation may not be directly related to the economy being virtual, but much like a real world economy, the game has volatile elements.

“We have seen that kind of volatility during times of war and in developing nations in the real world,” said Williams. “Our own economy has turned out to be less stable than we’d all assumed.”

A number of valuable lessons and analysis can certainly come from studying virtual economies, and researchers are beginning to see their value. However, what’s notable about this research is that academics have chosen a subscription based virtual world as their platform. If real world lessons are to be applied, wouldn’t it make far more sense for free-to-play/microtransaction supported titles to be chosen as the case subjects? The last time I checked, I didn’t have to lay down $20.00 a month to participate in the economy. By studying the free-to-play genre, I argue that this would be a far more realistic simulation of economic situations, with users creating and selling their own content on a virtual marketplace, a situation that more closely resembles what we see day in/day out in the real world. So again, while it’s a great thing that researchers are doing, studying virtual economies to gain insight into real world ones, choosing a platform that more closely resembles the real world would bring far better results and insight into human behaviors.