This article argues for using virtual worlds as experimental environments for social science questions at the macro level. The authors can foresee two major objections to this approach and will address them as to show why they do not prove to be significant. The first being that virtual worlds are not like the real world; therefore, one cannot generalize from events within them. The second of these foreseeable objections states that human society is too complex to be controlled in the way that controlled experimentation requires. Humans discover things by building environments suited for exploring the questions the authors have a rat maze is a very abstract environment, yet it is useful for exploring very general questions of mammalian cognition. The authors conclude that virtual worlds are no less valuable, on net, than other established experimental tools. The next stage in toolmaking, after Petri dishes, rat mazes, and supercolliders, should be virtual worlds.

This article proposes an empirical test of whether aggregate economic behavior maps from the real to the virtual. Transaction data from a large commercial virtual world -the first such data set provided to outside researchers -is used to calculate metrics for production, consumption and money supply based on real-world definitions. Movements in these metrics over time were examined for consistency with common theories of macroeconomic change. The results indicated that virtual economic behavior follows real-world patterns. Moreover, a natural experiment occurred, in that a new version of the virtual world with the same rules came online during the study. The new world's macroeconomic aggregates quickly grew to be nearly exact replicas of those of the existing worlds,

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Are immigrants on welfare because they are more likely to be eligible or because they are more likely to claim benefits for which they are eligible? The answer is politically important, but because most current research on immigration and welfare is based on data from the United States, the answer is difficult due to the complexities of the transfer system which make eligibility determinations difficult. In Germany, by contrast, eligibility for the main cash transfer program, Sozialhilfe (Social Assistance), is determined by a comparatively simple nationwide formula. We use data from the German Socio‐Economic Panel to test whether immigrants to Germany are more likely than natives to claim welfare benefits for which they are eligible. We find that immigrants are more likely than native Germans to receive welfare, both because immigrants are more likely to be eligible and because they are more likely, when eligible, to claim their benefits. However, we also find that this greater propensity to take‐up benefits is not related to immigrant status per se: when other sociodemographic factors are accounted for in an appropriate manner, immigrant households are no more likely to take‐up benefits than native households.

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How the basic concepts of economics—including markets, institutions, and money—can be used to create and analyze economies based on virtual goods. In the twenty-first-century digital world, virtual goods are sold for real money. Digital game players happily pay for avatars, power-ups, and other game items. But behind every virtual sale, there is a virtual economy, simple or complex. In this book, Vili Lehdonvirta and Edward Castronova introduce the basic concepts of economics into the game developer's and game designer's toolkits. Lehdonvirta and Castronova explain how the fundamentals of economics—markets, institutions, and money—can be used to create or analyze economies based on artificially scarce virtual goods. They focus on virtual economies in digital games, but also touch on serious digital currencies such as Bitcoin as well as virtual economies that emerge in social media around points, likes, and followers. The theoretical emphasis is on elementary microeconomic theory, with some discussion of behavioral economics, macroeconomics, sociology of consumption, and other social science theories relevant to economic behavior. Topics include the rational choice model of economic decision making; information goods versus virtual goods; supply, demand, and market equilibrium; monopoly power; setting prices; and externalities. The book will enable developers and designers to create and maintain successful virtual economies, introduce social scientists and policy makers to the power of virtual economies, and provide a useful guide to economic fundamentals for students in other disciplines.

Summary This paper explores a unique new source of social valuation: a market for bodies. The internet hosts a number of large synthetic worlds which users can visit by piloting a computer‐generated body, known as an avatar. Avatars can have an asset value, in that users can spend time to increase their skills; these asset values can be directly observed in online markets. Auction data for avatars from the synthetic fantasy world of EverQuest are used here to explore a number of questions involving the relative value of different body characteristics. Hedonic analysis of the auction price data suggests that the ‘level’, a game‐design metric that indicates the overall functionality or power of the avatar, is by far the most important attribute of the body. Other attributes that show significant price effects include: sex and class (i.e. being a wizard rather than warrior type of character). The male‐female price difference is interesting because there are actually no sex‐based differences in the abilities of the avatar bodies, by design. Price differences here must be caused by some other aspect of buyer preferences, ones unrelated to power or functionality of the avatar itself.

Coordination game theory is quite important to a number of literatures but has had very few direct empirical tests because that would require experimental participation by large numbers of people. Large games however can produce natural experiments: situations that through no intent of the designer offer controlled variations on a phenomenon of theoretical interest. Unlike any other social science research technology, such games provide for both sufficient participation numbers and careful control of experimental conditions, making them like Petri dishes for social science. This article examines two examples of games as Petri dishes for macro-level coordination effects: (a) the location of markets inside EverQuest and (b) the selection of battlefields inside Dark Age of Camelot.