Here’s a great weekend read.
It’s the opening blog post in a new weekly series from noted economist Yanis Varoufakis, the “economist in residence” for Valve, the Bellevue-based company behind games such as Half-Life and Portal, in addition to the dominant Steam game-distribution platform.
This makes perfect sense, actually. Gabe Newell, the Valve president, showed his appetite for experiments in virtual currency and pricing during what amounted to a dissertation on the topic during a conference in Seattle last year, as we documented at the time.
In his post, Varoufakis explains how he came to hold the position of Valve’s economist in residence, starting with an email from Newell, who had been following his work. He goes on to discuss what excites him about the job, and what he hopes to accomplish …
“In sharp contrast to our incapacity to perform truly scientific tests in ‘normal’ economic settings, Valve’s digital economies are a marvelous test-bed for meaningful experimentation. Not only do we have a full-information set (making sampling superfluous) but, more importantly, we can change the economy’s underlying values, rules and settings, and then sit back to observe how the community responds, how relative prices change, the new behavioural patterns that evolve. An economist’s paradise indeed…
“My intention at Valve, beyond performing a great deal of data mining, experimentation, and calibration of services provided to customers on the basis of such empirical findings, is to to go one step beyond; to forge narratives and empirical knowledge that (a) transcend the border separating the ‘real’ from the digital economies, and (b) bring together lessons from the political economy of our gamers’ economies and from studying Valve’s very special (and fascinating) internal management structure.
Thanks to Jennifer for the link.