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LearningAboutRealEconomicsinVirtualWorlds
DavidS.AbramsUniversityofPennsylvania
April5,2011
[Preliminary]
Virtualworldsprovideanopportunityforanentirelyneweconomicresearchmethodology.
With tens of millions of users, billions of dollars (US) in virtual production, and many
characteristics of real‐world economies, for the first time economists have access to a
venue with the realism of the field and control of the laboratory. Virtual worlds
additionallyprovideaccess toasubjectpool farmorediversethan ispossible inasingle
physicallaboratory.Inordertoextrapolatefromvirtualworldresultstorealeconomics,it
is imperative tounderstandeconomicbehavior invirtualworlds. Thispaperdoessoby
investigatingtwocommoneconomicgamesandonepuzzleinthevirtualworldofSecond
Life. Comparedwithnumerousstudiesfromaroundtheworld,individualsinSecondLife
exhibitbehaviorindistinguishablefromlabexperimentsintheultimatumandtrustgames
andMontyHallproblem. PlayerswithgreaterexperienceandattachmenttoSecondLife
exhibitgreaterother‐regardingbehaviorinsomeofthegames.Thesefindingsshouldhelp
allay concerns about the external validity of findings on economic behavior in virtual
worlds.
1
I.Introduction
Inthepast5years,therehasbeenadramaticincreaseinparticipationinwhatareknown
asMassivelyMultiplayerOnlineGames(MMOGs)orVirtualWorlds.Thesearesimulated
worldsthatexistbyvirtueofnetworkedcomputersandtheindividualswhousethem.In
thispaperIreportresultsfromtwoclassiceconomicexperimentsandonestatistical
problemruninavirtualworld.Thegoalistoinvestigateeconomicbehaviorinvirtual
worldswithaneyetowardsusingthemasnewvenuestogainrealworldinsightsabout
economics.
VirtualWorldsholdthepromiseofexperimentsthathavetherealismofthefieldandthe
controlofthelaboratory.Criticsallegethatthelaboratorysettingisunnaturalandlimits
theabilitytogeneralizeto“real‐world”economicsettings.Whileanelectroncaughtina
laboratorytrapwillstillactlikeanyotherelectron,apersonbeingpaidtositinfrontofa
computerforanhourinaneconomicexperimentmaynotbehavethesamewayasinareal
jobormarket.
Thecompositionofsubjectpoolsisanothertopicofcriticismofeconomicexperiments.
Experimentalsubjectsaretypicallyrecruitedfromtheundergraduatepopulationsof
researchuniversitieswheretheexperimenterswork.Thisspecializedbackgroundmay
substantiallyinfluencethegeneralizabilityofthefindings:aCaltechundergraduateseated
infrontofacomputerscreenmaynotcloselyresembleatraderinthefuturespitofthe
ChicagoMercantileExchange.
RunningexperimentsinVirtualWorldsissubstantiallyeasierthantraditionallaboratory
experiments.VirtualWorldsprovidealloftheessentialelementsofcurrentlaboratory
environmentsready‐made:ascriptinglanguageinwhichtodesigntheexperiments;a
computernetworkoverwhichsubjectsintheexperimentmayinteract;apoolofsubjects,a
data‐collectionsystem,andamethodofincentivizingsubjects.Forexample,inSecondLife,
anexperimentercancreateaprivate(orpublic)laboratorywithobjectsthatindividuals
canbuyorselltootherindividuals;orgamblestheycanchoosetopartakeof.Thereare
somestart‐upcoststolearninganynewlanguage,butoncemastered,thescripting
2
languagesallowmuchmoreflexibilitythancommonlyusedexperimentalsoftware
packages.
AllVirtualWorlds,bytheirnature,havelargepopulationsofindividualsinteractingover
networkedcomputers.Someofthegames(seeFigure1andTable2)havemillionsof
potentialexperimentalsubjects,withlowcoststoexperimentalparticipation.Economic
experimentsarelikelytobeattractivetoVirtualWorldresidents,whoviewthemas
anotheruser‐generatedactivityinwhichtoparticipate.InSecondLife,thescripting
languagemakesiteasytoexportresultsfromin‐gameexperimentintoanout‐of‐game
database.Finally,allVirtualWorldshavesomeformofin‐gamecurrencywhichcanbe
usedtoincentivizeexperimentalsubjects.
ButwithallofthepotentialbenefitsofperformingeconomicresearchinVirtualWorlds,it
willbelittlemorethancuriosityifitdoesnotgeneralizetoreal‐worldeconomicsettings.
Themoststraightforwardwaytotestthisistocompareexperimentswithwell‐known
resultsinmultiplesettingstothoseinavirtualworld.IchooseSecondLifeasthevirtual
worldinwhichtoruntheseexperimentsbecauseofitsdiverseuserbase,easeofuse,and
resemblancetorealeconomies.
ThreeexperimentswereruninSecondLifetoinvestigatetheimpactofthevenueon
economicbehavior:theultimatumgame,thetrustgame,andtheMontyHallproblem.Inall
threegamesthebehaviorexhibitedbysubjectsinSecondLifeisindistinguishablefromthat
foundinothersettings.Inaddition,relativetomosteconomicexperiments,thesubject
poolswerevastlymorediversealongseveraldimensions,includingageandnationality.
Thesefindingssuggestfurthereconomicresearchinvirtualworldsmaybeprofitable,
giventhatbehaviorseemstoreflectthatobservedintherealworld.
Therestofthepaperproceedsasfollows.InsectionII,Iprovideabriefbackgroundon
virtualworldsingeneralandSecondLifemorespecifically.SectionIIIpresentsthe
experimentalsetupoftheultimatumgame,itsimplementationinsecondlife,results,and
comparisonwiththeliterature.SectionsIVandVdothesameinturnforthetrustgame
andMontyHallproblem.SectionVIdiscussesthefindingsandrelatedliteratureand
sectionVIIconcludes.
3
II.Background
IntroductiontoVirtualWorlds
AVirtualWorldisapersistent,interactiveonlineenvironment,inwhichmanyindividuals
mayparticipatesimultaneously.VirtualWorldsresembletherealworldtovaryingdegrees
ApersonaccessesandparticipatesintheseVirtualWorldsthroughan“avatar,”whichisa
digitalrepresentationoftheuserintheVirtualWorld.VirtualWorlds,asIusethetermin
thispaper,datetoapproximately1996.Likethephysicalworld,theVirtualWorldismade
upofsocialnetworksandcommunities,inwhichplayersmustmakedecisions,interact
socially,andlivewithintheboundssetbythegame’sdeveloperorwithinthosesetbythe
online“society.”
ManyofthelargestvideogamemakersareinvolvedincreatingVirtualWorlds,including
Sony,Vivendi,andElectronicArts.Althoughrevenuefiguresarenotfullyavailable,
subscriptionestimatesareimpressive.Themostpopulargamealone(WorldofWarcraft)
generatesannualsubscriptionrevenueinexcessof$1billion,fromsevenmillionusers.
Table2detailsusernumbers,subscriptionfees,softwareretailprice,andother
informationforallofthetopVirtualWorlds.
VirtualWorldsmaybesplitintotwobroadcategories:role‐playinggames(i.e.,MMORPGs),
andanotherclasswhichIcallenhanced‐realitygames.Role‐playinggameshaveclearly
definedobjectivesforplayers,andtaskstheymayperformforreward.Thesegamesoften
havefantasysettings,suchasmedievaldragon‐slaying(FinalFantasy)orspacetravel(Star
WarsGalaxies).Someofthemostpopulartitlesintherole‐playinggenreareWorldof
Warcraft,Everquest,andFinalFantasy.
Whiletherole‐playinggamesweretheentireuniverseofVirtualWorldsforthefirst
severalyearsoftheirexistence,theenhanced‐realitygameshavebeengainingmarket
shareinthepastthreeyears(seeFigure1).Unlikeinrole‐playinggames,thereisnoclear
objectivetoenhanced‐realitygames,anymorethanthereisaclearobjectivetoreallife.In
enhanced‐realitygames,usersengageinmanyofthesameactivitiesasintherealworld:
socialize,shop,producegoods,performservices,ownland,andevendance.These
4
enhanced‐realitygamesalsoattractademographicthatmorerepresentativeoftheoverall
populationthanrole‐playinggames,whichtendtoattractmostlyyoungermales(seeTable
1).SecondLifeisthemostpopulargameinthiscategoryofVirtualWorlds.
WhileuserdemographicsaredifficulttoacquireitisapparentthatsomeVirtualWorlds
havedemographicsthatfairlycloselyresembletherealworld.InTable1wefindthatthe
meanageofthegame‐playersrangesfrom24.3forEverquestin2001to32forSecondLife
inMarch,2006.Themorerecentfigurestendtobehigher,perhapsbecauseearlyadopters
ofthistechnologytendtobeteenagersandcollegestudents.TheSecondLifefigureisnot
veryfarfromthecurrentU.S.medianageof36.4.Moreover,medianhouseholdincomeof
Everquestplayersin2000‐2001isnotfarfromtheU.S.level.Thefractionofplayersof
popularMMOG’swhoaremarriediswellbelowthenationalaverage,butthisis
unsurprisinggiventheloweraverageage.AsurveybyYee(2006a)foundthatalmost
three‐quartersofusersarestudentsorholdfull‐timejobs,which,conditioningonage,is
fairlyrepresentative.Finally,genderratiosareskewedtowardmalesformostgames,
althoughSecondLifeandSimCityareveryclosetoaratioofone.Altogether,itseemsclear
thatVirtualWorldshavemorerepresentativepopulationsthantheundergraduate
populationsoflargeresearchuniversitiesinseveralimportantobservabledimensions.
IntroductiontoSecondLife
SecondLifeisavirtualworldthatresemblestherealworldinmanyimportantways.There
isemployment,homeownership,acurrency,production,andmanyotheraspectsofreal
lifeandtherealeconomyinSecondLife.ThecurrencyiscalledtheLindenDollar($L)and
ittradesonanexchangecalledtheLindex.ThereisaspotmarketfortheLindenDollar
againstanumberofmajorcurrencies.Theexchangeratehasgenerallyrangedbetween
240to260LindenDollarsperU.S.dollarforthepastseveralyears.Theexchangeand
currencyarenamedforLindenLab,thecompanythatcreatedSecondLife.
SecondLifeusersmayplayforfree,butmustpayasubscriptionfeeofaround$15per
monthiftheywishtoownland.Realestateandhousingareimportantcentersofeconomic
activityinSecondLife,andexperiencedabubble,muchasintherealworld.Fashionis
anotherareaofsignificantactivity.
5
Likeothervirtualworlds,individualsinteractinSecondLifethoughavatarsandmay
communicatethroughtextchatsaswellasvoice.Thereareseveralwaystoestimatethe
game’sreach.SeveralmillionindividualshaveusedSecondLifeatsomepoint,but
simultaneoususersisprobablyabettermetricofactiveplayersandiscloserto90,000.
Thislikelyimpliesagroupofseveralhundredthousandwhohaveloggedoninthepast
month.AnumberofindividualsworkfulltimeinSecondLife,andatleastoneU.S.dollar
millionairehasbeenmintedthere.TheannualGDPofSecondLifemeasuresinthe
hundredsofmillionsofdollars(US).
WhereDoVirtualWorldExperimentsFitintheExperimentalTaxonomy?
Someofthecriticismsoflaboratoryexperimentshaveledtoanincreaseinpopularityof
fieldexperiments,whereresearchersincorporateexperimentaldesignintoasettingthatis
morenaturalforthesubjects.Thetradeoffofcourseisthatingaininggreaterrealism,the
experimentersoftensacrificesomedegreeofcontrol,reproducibility,orprecision.
HarrisonandList(2004)andLevittandList(2006)laythegroundworkforthe
classificationofdifferenttypesofexperimentsandtheirrelativestrengths.VirtualWorlds
offertheopportunitytotakeadvantageofthe“naturalness”offieldexperiments,while
retainingcontrolandoperability.Byrunninganexperimentwithinanenvironmentin
whichusersaresocomfortablethatmanyrefertothemselvesasresidents,oneshould
expectresultstobemorereproducibleandlesssensitivetosmallvariationsin
experimentaldesign.SincemostVirtualWorldshavevariedpuzzles,challenges,and
games,manycommoneconomicexperimentswouldseemquitenaturaltoauser.
Severalrecentstudieshaveindicatedtheimportanceofusingexperimentalsubjectpools
thataremorerepresentativeofthepopulationofinterest.HaighandList(2005)find
significantlydifferentbehavioraldifferencesbetweenstudentsandprofessionaltradersin
atradingexperiment.FehrandList(2004)alsofindsubstantialdifferencesbysubjectpool
fortrustexperimentsrunonCEO’sandstudents.Anumberofexperimentshaveshown
genderdifferencesineconomicexperiments,forexampleasreportedbyGneezyand
coauthors(2003)forpuzzlecompetitionsandGuillenandVesteg(2006)foralargearray
6
ofexperiments.Replicatingwell‐knownexperimentsinVirtualWorldscanincreasethe
understandingofsubjectpooleffects,andhelpvalidateresultsthatseemrobusttothem.
GneezyandList(2006)describeanexampleofarecentfieldexperimentthatcould
potentiallybenefitfromtranslationintoaVirtualWorld.Theytesttheimpactofgift
exchangeinalabor‐marketsetting,byhiringshort‐termworkerstodotwodifferenttasks.
Forexample,inaVirtualWorld,onecouldhirealargenumberofindividualslong‐termto
producevirtualwidgets,thathavearealin‐gamevalue,andrandomizewhichworkers
receivethe“gift”wage.Thissetuphasseveraladvantages.Theincreaseddurationof
employmentaddstherealisticpossibilityofsubjectsbeingfired,whichcouldhavean
importantimpactontheeffectofgiftexchange.Withhundredsofthousandsofvirtual
residentsaspotentialsubjects,thesubjectpoolcouldbesubstantiallylargerthanthatof
thereal‐worldstudy(wheren=19and23inthetwopartsoftheGneezyandListstudy).
Finally,theVirtualWorldstudywouldretainoneofthemostimportantvirtuesoffield
experiments,namely,aneconomicenvironmentwhichisnaturalandfamiliartothe
subject.
III.UltimatumGame
Theultimatumgameisthedrosophilaofeconomicexperimentsandassuchitis
perfectmechanismforcomparingeconomicbehavioracrosssettings.Theultimatumgame
hasbeenruninalargenumberofgeographiclocations,withdifferentsubjectpools,and
variedstakes.Likethefruitfly,thewidespreaduseoftheultimatumgamemakestherange
ofresultswell‐knownandthusitiseasytoevaluatenewimplementationsofit.
IcreatedalaboratoryinSecondLifewiththegoalofmakingtheultimatumgame
experimentsrunthereascomparabletolaboratoryexperimentsaspossible.1
Recruitment
1 As will be seen, some things will inevitably differ in Second Life.
7
Subjectswererecruitedintwoways,eitherviadirectapproachbyaresearchassistant
avatarorthroughin‐worldadvertisement.Thedirectapproachrecruitmentwas
performedbyRAavatarsapproachingindividualschosenatrandomfrompopularareasin
SecondLife.Thebeginningofthescriptisasfollows:
Hey, would you like to participate in a decision making experiment for
UniversityofChicagoresearch?It’llonlytake10‐20minutesandyougetL$
500 just for participating. You could earn a significant amount more
dependingonhow it goes.All youneed todo is teleport to the landmark I
sendyouandthenplayashortgame.You’llgetinstructionsthattellyouhow
toplay.Onceyou’redonetherewillbeashortsurveyandthenyougetpaid!
IM2meifyou’reinterested.
Ifindividualsexpressinterest,theyaregivena“landmark”whichallowsthemtobe
transporteddirectlytotheinsideofthelaboratory.
SecondLifealsohasacentralizedclassifiedadvertisementsystemwithvariouscategories,
includingemployment.Theposteroftheadvertisementmaypayanyamountofmoneyfor
theservice,andtheamountdeterminestheorderinwhichtheadsaredisplayed.Forthe
experimenttheadwasalwaysdisplayedinthetop5or10,ensuringitappearedonthefirst
pageofresultsforemploymentclassifiedads.Thetextfollows:
AreyouinterestedinearninguptoseveralthousandLindenDollarsfor10‐
20minutesof your timebyparticipating inaneconomicexperiment? You
are guaranteed 500 Linden Dollars for participating, and can earn several
thousand more depending on your performance. Please email
Individualswhoemailedaresponsetotheseadswereoftencontactedviainstantmessage
whentheywereobservedtobeonline.Regardlessofrecruitmentmethod,stepswere
alwaystakentoensurethatthetwoplayersinthegamedidn’tknoweachother.Ifin‐
worldrecruitmentwasused,twoplayerswererecruitedsimultaneouslyintwodifferent
2 Instant Message
8
areasofSecondLife.Individualswhorespondedtoadswereoftenpairedagainst
individualsrecruitedin‐world,tominimizelikelihoodofcoordinationwithaconfederate.
Oncethepairofplayerswasrecruited,theywerebothtoldtotransportthemselvestothe
experimentallab,describedbelow.
LaboratoryDesign
Inreal‐worldeconomiclaboratories,oneofthechallengesisensuringthatsubjectsdonot
knoweachotherorinteractsignificantlypriortotheexperiment.Thisisrelativelyeasyto
accomplishinSecondLife,bycreatingalaboratoryconsistingoftwophysicallyseparate
spaces,withcommunicationbetweenthetwoaccomplishedonlythroughthegame.Itis
alsopossibletoteleportdirectlyintothelaboratory,anditslocationisonlyrevealedto
recruitedsubjects.Inaddition,SecondLifehaslandaccesspoliciesthatmakeitpossibleto
prohibitsubjectsfromreturningtothelaboratoryassoonastheexperimentends.
Inordertoimplementthissetup,Icreatedtwocubescontainingtheexperimentalsetupon
landpurchasedinSecondLife(Figure2A).3Theinteriorswerekeptsparse,withan
identicalcouchandcoffeetableplacedineach(Figure2B).Onthecoffeetableisaredball,
andthesubjectistoldtoclickonittobeginthegame.Clickingtheballactivatesthe
programscriptthatimplementstheultimatumgameexperiment.
GameStructure
Inorderfortheexperimenttobeginbothplayer1(theproposer)andplayer2(the
responder)mustclickontheredball,whichbeginstheexperiment.Thisissimilartomany
laboratorysettingswhereindividualsatdifferentcomputerterminalsmustacknowledge
readinessbeforetheexperimentbegins.Subjectsreceiveinstructionsthrougha“notecard”
whichisadigitalblockoftextthatisgiventoeachplayeroncethegamehasbegun.Asin
standardimplementationsoftheultimatumgame,playersaregivenidenticalinstructions
andarefullyinformed.4
3 Unbeknownst to the subjects, the cubes actually floated in the air, something irrelevant to the experimental design, but particularly difficult to accomplish in real‐world laboratories. 4 The full instructions are provided in Appendix A.
9
Inordertoensurethatplayersfullyunderstandthestructureofthegameandminimize
spuriousresults,subjectsaregiventwoconcreteexamplesandthenaskedwhatpayoffs
wouldresultfromahypothetical.Oncethehypotheticaliscompletedcorrectly,themain
experimentbegins;ifitisnotansweredcorrectlywithinthreetries,thesubjectsaretold
theywillnotbeabletoparticipate.Subjectsprovideresponsesbytypingintoachat
window.
Theultimatumgamesetupisstandard:thefirstplayerisgivenasumofmoneytoallocate
betweenhimselfandplayer2,thenplayer2decideswhetherornottoacceptthe
allocation.Ifplayer2acceptsit,bothplayersarepaidaccordingtoplayer1’sallocation;if
not,bothplayersreceivenothing(beyondasmallamountforshowingup).Inthis
implementation,eachsubjectispaid$L500forshowingup,andplayer1dividesasumof
$L1500,worthabout$6(US).TheNashEquilibriumtothesequentialone‐shotgameis
well‐known:player1allocatesthesmallestincrementpossibletoplayer2(here,$L1)and
player2acceptstheoffer.
Results
Asinvirtuallyalllaboratoryimplementationsoftheultimatumgame,subjectsinSecond
Lifeplaystrategiesfarfromgametheorypredictions.Themedianofferis$L700(47%of
thepie)withameanof$L602(Table3).Theofferisonlyrejected6%ofthetime,and
rejectedoffersaverageonly$L392.ThefulldistributionofoffersmaybeseeninFigure3.
OneofthemajoradvantagesofSecondLifeasanexperimentalvenueistheunprecedented
breadthofsubjectcharacteristics(Table4).Aftercompletionoftheultimatumgame,
subjectswereaskedtoanswerashortsurveyabouttheirreal‐worldcharacteristicsbefore
theywerepaid.Subjectsrangefrom17‐55yearsofage,withameanof32.Themajority
(58%)areAmerican,butaboutathirdarefromEurope.The106subjectsinthe
experimentrepresent19differentcountries(Table5).Femaleparticipantsmakeup
almosthalf(45%)ofthesubjectsandalmostallarefluentinEnglish.
ThreedifferentquestionswereaskedinordertogetameasureofattachmenttoSecond
Life.Thereiswidevariationinweeklyhoursspentinthegame,from0toamaximumof
10
80,withamedianof15.Whilethesenumbersmayappearhigh,oneshouldkeepinmind
thatforsomeSecondLifehasdisplacedwatchingtelevision(whichaverages34hoursper
week,accordingtoNielsen,butonly20hoursperweekaccordingtotheBLS).Asurveyof
MMOGuserssupportsthissubstitutionexplanation,findingonly7hoursoftelevision‐
watchingperweek(Yee,2005).ManyofthesubjectsarerelativenewcomerstoSecond
Life,withlessthanhalfayearexperiencewiththevirtualworldonaverage.About20%of
usersownlandinSecondLife,whichrequiresthepaymentofamonthlyfee.
InTable6theoffersarebrokendownbyusercharacteristics.Nationalitydoesn’thavea
significantimpactonoffersize,nordoesgender.Butolderuserstendtomakehigher
offers(p<0.05)asdothosewithmoreattachmenttoSecondLifebyseveralmeasures.
Landownersoffersubstantiallymorethannon‐owners,althoughthedifferenceisnot
statisticallysignificant.ButindividualswhohaveusedSecondLifeformorethanamonth
offeronaverageabout50%morethanthosewhohavelessthan1monthofexperience(p
<.01).Asimilarpatternofgreatergenerosityemergeswhencomparingthosewhoplay
overanhourperdaywiththosewhoplaylessthanonehour(p<.10).
ComparisonwithPriorWork
Theprimaryreasonforyetanotherimplementationoftheultimatumgameistocompare
theresultsobtainedinSecondLifewiththosefoundinexperimentsruninexperimental
settingsaroundtheworld.Fortunately,thegameiseasytoquantifyandcomparisonsmay
bemadealongtwodimensions:meanofferandrejectionrate.Oosterbeek,etal(2004)
collectthisdatafrom75studies,whichmakesthecomparisonstraightforward(Tables7A
&7Bwhichreportthesamedata,butsorteddifferently).
FromTable8onecanobservethatthevastmajorityofoffersarebetween35and45%of
thepie.ThemeanofferinSecondLifeiswithinonepercentagepointoftheoverallmean.
Study‐leveldataisnotreportedinOosterbeek(2004)soIamunabletocalculatetheexact
standarddeviationofthedistribution.ButifIweighteachcountrybyfrequency,the
standarddeviationisabout4percentagepoints.ThemainfindingisthatoffersbySecond
Lifesubjectsarenotsignificantlydifferentfromthosefoundinlaboratorystudies.
11
Whenexaminingrejectionrates(Table7B),theSecondLiferesultsappeartobeonthelow
end.However,thereismuchgreatervariationinrejectionratesthanofferrates.A
calculationofrejectionratesfromtheOosterbeekmetastudyyieldsameanof16%anda
standarddeviationof7%.Thustheobservedrejectionrateof6%iswellwithinthenormal
rangereportedinultimatumgamestudies.
Tosummarize:TheultimatumgameinSecondLifeappearstohaveresultsthatarenot
significantlydifferentfromthosefoundinlaboratorygamesrunaroundtheworld.Asin
mostlaboratoryresults,Ifindthatsubjectsaremoregenerousthangametheory
predictionsandrejectmorefrequently.Ialsofindthatolderplayersandthosewith
greaterattachmenttothegametendtobemoregenerouswiththeiroffers.Oneofthe
majoradvantagesofSecondLifeasanexperimentalvenueistheabilitytoquicklyand
easilyassemblearemarkablydiversepoolofsubjects,makinganalysisbysubject
characteristicssimple.
IV.TrustGame
Aftertheultimatumgame,thetrustgameislikelythemostwidelyreplicatedeconomic
game.Liketheultimatumgame,italsoyieldschoicesthatdeviatesubstantiallyfromgame
theorypredictionsandwhichtendtoexhibitsometypeoffairnesspreferences.Inorderto
provideanothermethodofevaluatingeconomicbehaviorinSecondLife,Iimplementedthe
trustexperiment.
Muchofthesetupforthetrustgameisidenticaltothatfortheultimatumgame.
Recruitmentofplayerswasboththroughclassifiedadsandin‐worldcontactandidentical
laboratorieswereused.
GameStructure
Asintheultimatumgame,subjectsreceiveinstructionsthrougha“notecard”andthen
respondbytypinganswersintoachatwindow.5Subjectsarerequiredtoanswera
hypotheticalcorrectlywithinthreeattempts;otherwisetheyareremovedfromthegame.
5 See full instructions in Appendix A.
12
Thetrustgamesetupisstandard:thefirstplayerisgiven$L1500toallocatebetween
himselfandplayer2.Whateverheallocatesistripledandgiventoplayer2whothenhas
theopportunitytosendbacksomeportionofwhatshehasreceivedtoplayer1.TheNash
Equilibriumtothesequentialone‐shotgameiseasilyarrivedatthroughbackward
induction:player1allocatesnomoneytoplayer2andplayer2sendsnomoneyback.Each
playerreceives$L500asashow‐upfeeinadditiontowhattheyearnthroughthegame.
Results
Subjectsplayingthetrustgameinthelaboratoryrarelyexhibitequilibriumplay,nordo
theyintheSecondLifeimplementation.InTable8wefindthatthemedianoffermadeby
thefirstplayeris$L500,33%ofthemaximum,withastandarddeviationof$L430.The
medianreturn($L475)issimilar,about32%oftheinitialstakes,withastandarddeviation
of$L801.Only8of56playersinthesecondpositionreturnednothing,andthreeofthose
couldnothavedoneotherwise,sincetheyreceivednothingfromthefirstplayer.
ThefullsetofoffersandreturnsisdisplayedgraphicallyinFigure4.Ifallplayer2’swere
purealtruists,allofthedatawouldlieonthetopline,asthesecondplayerreturnedthefull
sumreceivedtothefirst.Ifthesecondplayerbelievedinevenlysplittingthemoney,the
datawouldlieonthelowerline.Onecanseethatthereisapositivecorrelationbetween
offersandreturns,butmostplayer2’sreturnlessthananevensplit.
Subjectcharacteristicsaresimilartothosefoundintheultimatumgame(Table9).About
halfaremale,meanageis32,and60%areAmericansandaquarterareEuropean.The
112subjectsintheexperimentrepresent19differentcountries,notallthesameasthose
representedintheultimatumgame(Table10).TheyspendagooddealoftimeinSecond
Life(meanof22hoursperweek)andhaveplayedthegamefor5monthsonaverage.
Thereissubstantialvariationinamountoffered,soeventhoughtherearelargedifferences
bysubjectcharacteristics(Table11)theyareallstatisticallyinsignificant,exceptfor
weeklyusageofSecondLife.There,individualswhoplay1‐3hoursperweekofferan
averageof$L250morethanthosewhoplaylessthan1hourperweek(p<.10).
13
Theamountreturnedbyplayer2variesevenmoregreatlythanamountofferedbyplayer
1.Still,therearesomesubjectcharacteristicsthatarecorrelatedwithamountofreturn
(seeTable12).Americansreturnabouthalfasmuchasindividualsfromothercountries(p
<.05)andwomenreturnfarlessthanmen(p<.10).Olderplayersreturnsubstantiallyless
onaverage,althoughthisdifferenceisnotstatisticallysignificant.Thefindingsby
attachmenttoSecondLifearenotasunambiguousasintheultimatumgame,wherethose
withgreaterattachmentbyseveralmeasurestendedtoexhibitmoreother‐regarding
behavior.Inthetrustgame,landownersreturnmoremoneyasdothemostintense
players(thoseaveragingoverthreehoursperday),butthesedifferencesarenot
statisticallysignificant.Further,playerswiththegreatestexperiencewiththegameappear
tobetheleastgenerous,althoughthedifferencesbyexperienceinreturnratesare
relativelysmallandstatisticallyinsignificant.
ComparisonwithPriorWork
ForcomparisonofSecondLifetrustgameresultswithpreviouswork,Irelyonarecent
metastudybyJohnsonandMislin(2009).Theauthorsreporton85different
implementationsofthetrustgame.Theirprimaryoutcomevariablescorrespondtothose
reportedabove,namelyamountofferedbyplayer1andamountreturnedbyplayer2.
JohnsonandMislinreportthereturnratenormalizedbytheamountavailabletoreturn.
Forthisstudythemeanofthismeasurewillsimplybethemeanreturndividedbythree
timesthemeanoffer,whichis35.1%.Themeanofferrateof39%maybefoundinTable8.
Thesevaluesarebothwellwithinonestandarddeviationofthemeanratesreportedinthe
metastudy.Themeanofferis50.9%ofthestakes,withastandarddeviationof13.8%.The
meanreturnis36.5%oftheamountavailable,withastandarddeviationof9.4%.In
Figures5and6IoverlaytheSLresultsonthedistributionsreportedinJohnsonandMislin.
Mostoftheofferratesfallbetween30and65%.Whilethe39%offerrateintheSecond
Lifetrustgameisslightlyonthelowend,itisclearlywellwithinthebulkofthe
distributionreportedintheliterature.Thedistributionofthereturnedfractionisalso
14
relativelydispersed,rangingfromabout20–50%.Here,theSecondLifereturnfractionis
rightinthemiddleofthedistributionfoundintheliterature.
Aswiththeultimatumgame,individualsplayingthetrustgameinSecondLifeappearto
behaveinwaysindistinguishablefromthoseinothersettings.Asintheultimatumgame,
individualswithgreaterattachmenttoSecondLifegenerallyappeartoexhibitmoreother‐
regardingbehaviorinthetrustgame.Americansappeartobelesstrustworthy,asdo
women,witheachgroupreturningabouthalfofthecomparisongroup.Iexploresomeof
theseresultsfurtherinthediscussion.
V.MontyHall
Unlikethefirsttwoexperiments,theMontyHallproblemisnotaneconomicgame,but
ratheraone‐persondecisionproblem.Itisawell‐knownpuzzlethatprimarilytests
Bayesianupdating.ItwaschosenforreplicationinSecondLifebecauseitisamongthe
mostwidely‐knownone‐playerproblemsintheeconomicsliterature.
GameStructure
TheMontyHallplayerispresentedwithachoiceofthreedoors,behindoneofwhichliesa
valuableprize(seeFig2C).Theplayermustchooseadoor,andsubsequentlyoneofthe
unopeneddoorsisopenedtorevealthatitdidnotholdtheprize.Thecontestantisthen
giventheopportunitytoswitchhischoice,whichwillthenbefinal,andthelocationofthe
prizerevealed.Theimportantdecisioninthisproblemiswhetherornottoswitchdoors
whengiventheopportunity.Reasoningthroughthebestchoiceisdifficult,butwriting
downtheprobabilitiesusingBayesrulerevealsthatitisalwaysoptimaltoswitch
(increasingtheprobabilityofwinningfrom1/3to½).
Recruitmentandlaboratory
SubjectswererecruitedfortheMontyHallprobleminthesamewaysasfortheultimatum
gameandtrustgame.Subjectcharacteristics(notreported)areverysimilarasforthe
ultimatumandtrustgames.AseparatelaboratorywasbuiltfortheMontyHallproblemto
15
physicallyrepresenttheproblem(Figure2c).Thesubjectstandsbeforethethreedoors,
clicksoneforhisfirstchoice;oneoftheremainingdoorsopenstorevealnothingbehindit,
andtheuserthenhastheoptiontoclickontheoriginaldoorortheotherunopenedone.
Thechosendoorisopenedandsuccessisindicatedbyanimageofgoldcoins.Thestakes
are$L500perround,andeachsubjectplays10rounds.TheinstructionsfortheMontyHall
problemarepresentedinAppendixA.
ResultsandComparisonwithPriorWork
TherearetwomainfindingsfromtheimplementationoftheMontyHallprobleminSecondLife.First,asinotherstudies,subjectsgetbetterwithexperience(Figure7).Thatis,theyaremorelikelytoswitchthehighertheround.Theresultisstatisticallysignificantatthe5%level.
InTable13,IreportthemainresultsoftheSecondLifeimplementationoftheMontyHallproblem.Themeanswitchrateoverallroundsis33%,whichisinthesamerangefoundinanumberofotherstudies.ThereisnometastudyoftheMontyHallproblemthatIamawareof,soinordertocomparetheSecondLiferesultstotheliterature,Icollectedotherstudiesbyhand.Thereissubstantialamountofvariationintheswitchrateinthesestudies(from19to53%),andtheresultsfromthisstudyarefirmlyinthemiddle.Thuseveninaone‐playerproblem,SecondLifesubjectsresultsareconsistentwiththatfoundintheliterature.
VI.Discussion
[Tobeadded]
VII.Conclusion
Virtualworldsholdthepromiseofanewtypeofexperimentallaboratoryforthesocialsciences.Theyholdthepotentialtotestamuchbroaderrangeofeconomictheorythaninthetraditionallaboratories,fromlaboreconomicstomacroeconomics.Butinorderfortheseexperimentstobeundertaken,theremustbesomeexpectationthatthesystemsstudiedareinformativeofreal‐worldeconomics.
Towardthisend,Ihavereplicatedtwowell‐knowngamesandonepuzzleinthevirtualworldofSecondLife.Ifindsubjectplayintheultimatumgame,trustgame,andMontyHallproblemisindistinguishablefromthatobservedinalargenumberofreal‐worldstudies.Further,Ifindsubjectpoolsthatareincrediblydiverseacrossanumberofcharacteristics.Thisallowsfortheexaminationofheterogeneityofeffectsacrossanumberofdimensions.
16
References Angeletos,George‐Marios,DavidLaibson,AndreaRepetto,JeremyTobacman,Stephen
Weinberg."TheHyperbolicConsumptionModel:Calibration,Simulation,andEmpiricalEvaluation."InTimeandDecision:EconomicandPsychologicalPerspectivesonIntertemporalChoice,517‐43:NewYork:RussellSageFoundation,2003.
Browning,MartinandAnnamariaLusardi.“HouseholdSaving:MicroTheoriesandMicro
Facts.”JournalofEconomicLiterature32(1996):1797‐1855.Castronova,Edward.“Virtualworlds:Afirst‐handaccountofmarketandsocietyonthe
cyberianfrontier.”Availableathttp://ssrn.com/abstract=294828.(2001)________.“Thepriceof'man'and'woman':Ahedonicpricingmodelofavatarattributesinasyntheticworld.”Availableathttp://ssrn.com/abstract=415043.(2003)________.“OntheResearchValueofLargeGames:NaturalExperimentsinNorrathand
Camelot.”Availableathttp://ssrn.com/abstract=875571(2005)________.“ACost‐BenefitAnalysisofReal‐MoneyTradeintheProductsofSynthetic
Economies.”Info,Vol.8no.6(2006).Deaton,Angus.UnderstandingConsumption.Oxford:OxfordUniversityPress,1992.EmergingTechnologyConference.QuotationsfromMarch6‐9,2006conference.Retrieved
November,2006fromhttp://conferences.oreillynet.com/etech/Fehr,ErnstandJ.List.“TheHiddenCostsandReturnsofIncentives–Trustand
TrustworthinessamongCEOs.”JournaloftheEuropeanEconomicAssociation.Vol.2(5),pp.743‐771(2004).
Gneezy,UriandJ.List.“PuttingBehavioralEconomicstoWork:TestingforGiftExchangeinLaborMarketsUsingFieldExperiments.”Econometrica,Vol.74(5),pp.1365‐1384(2006).
________,M.Niederle,andA.Rustichini.“PerformanceinCompetitiveEnvironments:GenderDifferences.”TheQuarterlyJournalofEconomics.Vol.118,pp.1049‐1074(2003).
Grimmelmann,James.“VirtualWorldsasComparativeLaw.”Vol.49NewYorkLawSchool
LawReview,pp.147‐184(2004).Guillen,PabloandR.Veszteg.“SubjectPoolBiasinEconomicExperiments.”Availableat
http://econpapers.repec.org/paper/grawpaper/06_2F03.htm(2006).
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Haigh,MichaelandJ.List.“DoProfessionalTradersExhibitMyopicLossAversion?AnExperimentalAnalysis.”JournalofFinance,Vol.60(1),pp.523‐534(2005).
Hof,Rob.“MyVirtualLife.”BusinessWeek,May1,2006.Krotoski,Aleks.“ChicksandJoysticks:AnExplorationofWomenandGaming.”Whitepaper
forTheEntertainment&LeisureSoftwarePublishersAssociation(2004).Noveck,Beth.“InstituteforInformationLawandPolicySymposium,StateofPlay.
Introduction:TheStateofPlay.”NewYorkLawSchoolLawReview,Vol49,Number1(2004).
Gneezy,Uri,M.Niederle,andA.Rustichini.“PerformanceinCompetitiveEnvironments:
GenderDifferences.”TheQuarterlyJournalofEconomics,Vol.3,pp.1049‐1074,2003.Rosedale,Philip.TalkatGoogleLabs,MountainView,CA.March1,2006
AvailableonGoogleVideo.RetrievedNovember,2006fromhttp://video.google.com/.Roth,Alvin.,V.Prasnikar,M.Okuno‐Fujiware,andS.Zamir“BargainingandMarket
BehaviorinJerusalem,Ljubljana,PittsburghandTokyo:anExperimentalStudy”,AmericanEconomicReview,Vol.81,pp.1068‐1095,1991.
Secondlife.com.“EconomicStatistics.”RetrievedDecember,2006from
http://secondlife.com/whatis/economy_stats.php.Whitehouse.gov.“HouseholdIncome.”RetrievedNovember,2006from
http://www.whitehouse.gov/fsbr/income.html.Yee,Nick.“TheDemographics,MotivationsandDerivedExperiencesofUsersofMassively‐
MultiuserOnlineGraphicalEnvironments.”Presence,Vol.15,pp.309‐329,2006.(a)________.Availablefromhttp://www.nickyee.com/.(b)
18
AppendixA
Ultimatum Game Instructions
Note card 1: WELCOME! You have been asked to participate in an economics experiment. You will be paid 500 Linden Dollars for participating and you may earn additional money in the experiment. You will be paid at the end of the experiment. This experiment is part of university research to help understand how people make decisions. Do not use the chat bar or instant messenger (IM) during the experiment, except when you are asked to do so. Please click ‘next’ when you are finished reading a card. Note card 2: THE GAME You will be paired with another person who is in another room. You and your partner will remain anonymous. You will be assigned to be either Player A or Player B. Player A will be given 1500 real Linden Dollars at the beginning of the game. Player A may choose to send some, all or none of this money to Player B by typing the amount into the chat bar when prompted to do so. Player B will be told how much money Player A sent and will decide whether to accept or reject the offer. If Player B rejects the offer, both Player A and Player B receive nothing beyond the participation fee. If Player B accepts Player A's offer, then, in addition to the participation fee, Player B receives whatever Player A offered him. Player A receives 1500 Linden dollars minus the amount sent to Player B. Note card 3: EXAMPLES Here is an example: Player A starts with 100 Linden Dollars and decides to send 5 to Player B. Player B rejects the offer of 5 Linden Dollars. In addition to the participation fee, Player A is paid 0 Linden Dollars and Player B is paid 0 Linden Dollars. Here is another: Player A receives 200 Linden Dollars and decides to send 150 to Player B. Player B accepts the offer of 150 Linden Dollars. In addition to the participation fee, Player A is paid 50 Linden Dollars and Player B is paid 150 Linden Dollars.
19
Note card 4: TEST In order to make sure you understand, please work out this example. You cannot play the game if you do not answer correctly. Player A receives 500 Linden Dollars and decides to send 75 to Player B. Player B accepts the offer. In addition to the participation fee, how many Linden Dollars is Player A paid? _____ Please type the answer into the chat bar. You have 3 chances to answer correctly. Note card 5: Your decisions in this game are private and we ask that you do not tell anyone your decision either during, or after, the experiment. Your participation is voluntary and you may leave at any time. Once you have read and understood the instructions please type "Ready" in the chat box. The game will begin as soon as both players have completed the instructions. Note card 6: SURVEY Thanks for participating! The game is now ended and you will be paid immediately after completing a short survey. There are seven questions about your background in real life which will help in the understanding of the data. All responses will be kept confidential, and your avatar name will not be recorded. Click ‘next’ to start the survey. Note card 7: THANKS! Thank you for your responses. You will now receive your payment for participating. You may only participate in this experiment one time, but look on the employment message board for future experiments. Thank you again for participating! If you have any further questions, please email David Abrams: [email protected] If you have any questions about your rights as a participant in this research, you may contact the Social and Behavioral Science Institutional Review Board at the University of Chicago: [email protected] Please teleport to another location.
20
Trust Game Instructions Note card 1: WELCOME! You have been asked to participate in an economics experiment. You will be paid 500 Linden Dollars for participating and you may earn additional money in the experiment. You will be paid at the end of the experiment. This experiment is part of university research to help understand how people make decisions. Do not use the chat bar or instant messenger (IM) during the experiment, except when you are asked to do so. Please click ‘next’ when you are finished reading a card. Note card 2: THE GAME You will be paired with another person who is in another room. You and your partner will remain anonymous. You will be assigned to be either Player A or Player B. Player A is given 1500 Linden Dollars at the beginning of the game. Player A may choose to send some, all or none of this money to Player B by typing the amount into the chat bar when prompted to do so. Whatever amount Player A chooses to send to Player B is tripled. Player B will be told the tripled amount and then may send back some, all, or none of the money to Player A. The game then ends. In addition to the participation fee, Player A receives 1500 Linden dollars minus the amount sent to Player B plus the amount sent from Player B to Player A. Player B receives the participation fee plus three times the amount sent by Player A minus the amount sent from Player B to Player A. Note card 3: EXAMPLE Here is an example of the experiment, where Player A is initially given 100 Linden Dollars: Player A is asked “How much would you like to send to Player B?” He responds “15”. Player B is told “You have been sent 45 Linden Dollars. How much would you like to send to Player A?” Player B types “0”. In addition to the participation fee, Player A is then paid 100 – 15 + 0 = 85 Linden Dollars and Player B is paid 45 – 0 = 45 Linden Dollars. Note card 4: TEST
21
In order to make sure you understand, please work out this example. You cannot play the game if you do not answer correctly. Player A is given 500 Linden Dollars and decides to send 100 to Player B. Player B receives 300 Linden Dollars and decides to send back 50. In addition to the participation fee, how many Linden Dollars is Player B paid? ____ Please type the answer into the chat bar. You have 3 chances to answer correctly. Note card 5: Your decisions in this game are private and we ask that you do not tell anyone your decision either during, or after, the experiment. Your participation is voluntary and you may leave at any time. Once you have read and understood the instructions please type "Ready" in the chat box. The game will begin as soon as both players have completed the instructions. Note card 6: SURVEY Thanks for participating! The game is now ended and you will be paid immediately after completing a short survey. There are seven questions about your background in real life which will help in the understanding of the data. All responses will be kept confidential, and your avatar name will not be recorded. Click ‘next’ to start the survey. Note card 7: THANKS! Thank you for your responses. You will now receive your payment for participating. You may only participate in this experiment one time, but look on the employment message board for future experiments. Thank you again for participating! If you have any further questions, please email David Abrams: [email protected] If you have any questions about your rights as a participant in this research, you may contact the Social and Behavioral Science Institutional Review Board at the University of Chicago: [email protected] Please teleport to another location.
22
Monty Hall Game Instructions Note card 1: WELCOME!
You have been asked to participate in an economics experiment. You will be paid 500 Linden Dollars for participating and you may earn additional money in the experiment. You will be paid at the end of the experiment. This experiment is part of university research to help understand how people make decisions. Please do not use the chat bar or instant messenger (IM) during the experiment. Please click “next” when you are finished reading a card. Note card 2: THE GAME A prize is hidden randomly behind one of the three doors before you. You must guess which door you think holds the prize. After choosing a door, one of the two remaining doors which does not hold the prize is opened. You may then change your choice of door to the other remaining closed door or keep your original choice. The prize is then revealed. If you chose the right door, you win L$ 250. If not, you win nothing. You will play ten times, with the prize hidden randomly each time. Note card 3: PRACTICE Let’s try one game now just for practice. Note card 4: After the experiment is over, you will be asked to fill out a short survey, and then you will be paid. You will receive 500 Linden Dollars for participating, plus 250 Linden Dollars for each round you chose the correct door. You will then be asked to leave the experimental lab. You will not be able to return to the lab after the experiment is over. Your participation is voluntary and you may leave at any time. Once you have read and understood the instructions please click "Ready". Note card 5: SURVEY Thanks for participating! The game is now ended and you will be paid immediately after completing a short survey.
23
There are eight questions about your background in real life which will help us understand the data. All responses will be kept confidential, and your avatar name will not be recorded. Click “next” to start the survey. Note card 6: THANKS! Thank you! You will now receive your payment. You may only participate in this experiment once, but look on the employment message board for future experiments. If you have any questions, please email David Abrams: [email protected] If you have any questions about your rights as a participant in this research, you may contact the Social and Behavioral Science Institutional Review Board at the University of Chicago: [email protected] Please teleport to another location. Dialog: Please touch the door you think holds the prize. <repeat every 10 seconds until click. Timeout at 5 minutes> I will now open one of the doors you did not choose and show you that it does not hold the prize. <Open one of two non-clicked doors that doesn’t contain gold> Now, with the information you have, touch the door you think holds the gold. <display win/loss message>
24
Figure1A:PaidUserGrowthinVirtualWorlds–Largest
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
5,000,000
5,500,000
6,000,000
6,500,000
7,000,000
Jan-97 Jul-97 Jan-98 Jul-98 Jan-99 Jul-99 Jan-00 Jul-00 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07
Paid
Use
rs
Lineage
RuneScape
Star WarsGalaxies
World of Warcraft
25
Figure1B:PaidUserGrowthinVirtualWorlds–Medium
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
550,000
600,000
650,000
700,000
Jan-97 Jul-97 Jan-98 Jul-98 Jan-99 Jul-99 Jan-00 Jul-00 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07
Paid
Use
rs
Ultima Online
Dark Age of Camelot
EverQuest
Final Fantasy XI
Asheron's Call 2
Mankind
Toontown Online
Second Life
Dofus
28
Figure3
Figure4
05
1015
2025
Fre
quen
cy
0 500 1000 1500Linden Dollars
Ultimatum Game Offers (out of 1500)
010
0020
0030
0040
0050
00P
laye
r 2
Ret
urn
0 500 1000 1500Player 1 offer
Trust Game Offers and Returns
31
Table1
Game Date Age Married Children Student American
Second Life March, 2006 0.57 32 0.75World of Warcraft June, 2005 0.84 28.3 22.7
(8.4) (14.1)obs. 1019 1019 1019
The Sims Online 2004 0.4Popular MMOGs* 2000-2003 0.854 26.57 0.363 0.221 0.500 0.222 22.7
(9.19) (15.0)obs. 5547 5509 2846 2846 2846 2846 5471
Everquest 2000-2001 0.84 25.6 0.68 0.19 0.32 ~$50,000 22.4obs. 1240 1240 2473 2475 1099 2525 1216
Everquest 2001 0.922 24.3 0.228 0.15 0.534 0.350 0.813obs. 3619 3619 3619 3619 3619 3619 3619
Median Household
Income
Hours played per
week
Table 1: Virtual World User Demographics
MaleIn a
relationshipFull-time
job
*Ultima Online, EverQuest, Dark Age of Camelot, and Star Wars Galaxies
Sources: Survey data reported in Yee (2006), http://www.nickyee.comQuotations from talks at Emerging Technology Conference, March 6-9, 2006 found on http://conferences.oreillynet.com/etech/Speech by Philip Rosedale, CEO of Linden Labs at Google, March 1, 2006 (available on Google Video).Krotoski (2004); Castronova(2001)
32
Table2
Table3
Title # UsersYear of
PublicationPurchase
Price
Monthly Subscription
Fee Classification
Market Share by Revenue*
Monthly Subscription
RevenueWorld of Warcraft 11,500,000 2009 $59.98** $14.99 Fantasy 62.4% $172,385,000RuneScape 10,000,000 2002 Free $5.00 Fantasy MMORPG 7.4% $50,000,000Second Life 1,761,927 2009 Free $9.95 Social MMOG <1.0% $17,531,174Final Fantasy XI 1,500,000 2003 $19.99 $12.95 Fantasy MMORPG 3.1% $19,425,000Lineage: The Blood Pledge 1,399,909 1998 Free $15.00 Fantasy MMORPG 6.5% $20,998,635Lineage II: The Chaotic Chronicle 1,300,000 2004 $29.99 $14.99 Fantasy MMORPG 6.2% $19,487,000Eve Online 300,000 2003 Free $14.95 Science Fiction MMORPG 1.5% $4,485,000EverQuest 200,000 1999 $19.99 $14.99 Fantasy MMORPG 1.1% $2,998,000City of Heroes/Villains 200,000 2004 $19.99 $14.99 Comic Book Fantasy 0.8% $2,998,000EverQuest II 185,000 2004 $29.99 $14.99 Fantasy 1.2% $2,773,150Star Wars Galaxies 170,000 2003 $29.99 $14.99 Science Fiction MMORPG 1.4% $2,548,300Ultima Online 135,000 1997 $29.95 $12.99 Fantasy MMORPG 1.1% $1,753,650Dark Age of Camelot 125,000 2001 $19.99 $14.95 Fantasy MMORPG ≈1% $1,868,750Toontown Online 110,000 2003 Free $9.99 Children's MMORPG 0.9% $1,098,900Dungeons & Dragons Online: Stormre 90,000 2006 $49.99 $14.99 Fantasy 0.7% $1,349,100PlanetSide 65,000 2003 Free $12.99 Shooter MMOG <1.0% $844,350The Sims Online 35,500 2002 Free $9.99 Social MMOG <1.0% $354,645Yohoho! Puzzle Pirates 34,000 2003 $19.99 $9.99 Puzzle MMOG <1.0% $339,660The Matrix Online 30,000 2005 $29.99 $14.99 Science Fiction <1.0% $449,700Asheron's Call 30,000 1999 $19.95 $12.95 Fantasy MMORPG <1.0% $388,500There 17,000 2003 Free $9.95 Social MMOG <1.0% $169,150WWII Online 12,000 2001 Free $14.99 Shooter MMOG <1.0% $179,880Anarchy Online 12,000 2001 Free $14.95 Science Fiction MMORPG <1.0% $179,400Auto Assault 11,000 2006 $49.99 $14.99 Action <1.0% $164,890Horizons: Empire of Istaria 10,000 2003 Free $12.95 Fantasy MMORPG <1.0% $129,500
Total 29,233,336 $324,899,334
Table 2: Virtual World Descriptive Statistics
*Market share is calculated from paying users, and therefore may not match aggregate user numbers**$19.99 + $39.99 (expansion pack)Revenue figures reflect only monthly subscription revenues and therefore understate the games' actual revenues. Source: MMOGChart.com, mmogdata.voig.com, individual game web pages, sources cited in
Variable Mean Median Mode Min Max St. Dev ObsOffer 602 700 750 (n=20) 5 1500 288 53
Offer (percent of maximum)
40% 47% 50% (n=20) 0% 100% 19% 53
Accepted 0.94 1 1 (n=50) 0 1 0.23 53
Offer (conditional on rejected)
392 500 500 75 600 279 3
26% 33% 33% 5% 40% 19% 3Offer (accepted) 615 700 700 5 1500 286 50
41% 47% 47% 0% 100% 19% 50
Total pie is $L 1500 = $6
Virtual Ultimatum Game Results
33
Table4
Table5
Variable Mean Median Min Max St. Dev ObsAge 32 30 17 55 11.3 106Male 0.55 1 0 1 0.50 106
European 0.32 0 0 1 0.47 106American 0.58 0 0 1 0.49 106
Other Country 0.09 0 0 1 0.29 106English Fluency 0.94 1 0 1 0.23 106
Weekly Hours in SL 17.0 15 0 80 13.9 103Experience with SL (months) 5.57 2 0.03 48 8.23 106
SL Land Owner? 0.20 0 1 1 0.40 106
Ultimatum Game Demographics
Country Frequency Percentaustralia 1 0.9brazil 1 0.9canada 5 4.7denmark 1 0.9finland 1 0.9germany 4 3.8greece 1 0.9israel 1 0.9italy 4 3.8mexico 1 0.9netherlands 4 3.8portugal 1 0.9romania 1 0.9russia 1 0.9scotland 1 0.9spain 1 0.9trinidad and tobago 1 0.9uk 14 13.2usa 62 58.5
total 106 100
Ultimatum Game Country of Residence
34
Table6
Status Mean Median Min Max ObsAmerican 601 700 75 1500 32European 600 600 5 1500 17
Other 625 625 500 750 4
Male 634 600 200 1500 25Female 574 725 5 900 28
32 or under 528 500 5 900 31Over 32 years old 707 750 150 1500 22
No Land 576 600 5 1500 43Land Owner 715 750 150 1500 10
Less than 1 month 467 500 5 900 201 to 6 months 690 750 92 1500 16
More than 6 months 679 750 200 1500 17
Under 1 hour/day 493 500 5 750 131-3 hours/day 636 725 75 1500 24
Over 3 hours/day 682 750 92 1500 14Offers are out of $L1500
Ultimatum Game Offers
35
Table7A
Country N Mean offer Mean rejectPeru 1 26.00 4.80Spain 1 26.66 29.17Chile 1 34.00 6.70UK 2 34.33 23.38
Ecuador 2 34.50 7.50Sweden 1 35.23 18.18
Mongolia 2 35.50 5.00Germany 1 36.70 9.52Romania 2 36.95 23.50Bolivia 1 37.00 0.00
Tanzania 4 37.50 19.25Austria 1 39.21 16.10
Second Life 1 40.15 5.66France 3 40.24 30.78
Papua New-Guinea 2 40.50 33.50US East 22 40.54 17.15
Israel 5 41.73 17.73Netherlands 2 42.25 9.24
US West 6 42.64 9.41Zimbabwe 2 43.00 8.50Slovakia 3 43.17 12.67Kenya 1 44.00 4.00
Yugoslavia 1 44.33 26.67Japan 3 44.73 19.27
Honduras 1 45.70 23.05Indonesia 4 46.63 14.63Paraguay 1 51.00 0.00
Source: Oosterbeek, et al (2004)
Ultimatum Game Offer and Rejection Rates
36
Table7B
Country N Mean offer Mean rejectBolivia 1 37.00 0.00
Paraguay 1 51.00 0.00Kenya 1 44.00 4.00Peru 1 26.00 4.80
Mongolia 2 35.50 5.00Second Life 1 40.15 5.66
Chile 1 34.00 6.70Ecuador 2 34.50 7.50
Zimbabwe 2 43.00 8.50Netherlands 2 42.25 9.24
US West 6 42.64 9.41Germany 1 36.70 9.52Slovakia 3 43.17 12.67Indonesia 4 46.63 14.63
Austria 1 39.21 16.10US East 22 40.54 17.15
Israel 5 41.73 17.73Sweden 1 35.23 18.18Tanzania 4 37.50 19.25
Japan 3 44.73 19.27Honduras 1 45.70 23.05
UK 2 34.33 23.38Romania 2 36.95 23.50
Yugoslavia 1 44.33 26.67Spain 1 26.66 29.17
France 3 40.24 30.78Papua New-Guinea 2 40.50 33.50
Source: Oosterbeek, et al (2004)
Comparison with Literature
37
Table8
Table9
Variable Mean Median Mode Min Max St. Dev ObsOffer 584 500 500 (n=16) 0 1500 430 56Offer
(% of max)39% 33% 33% (n=16) 0% 100% 29% 56
Return 615 475 0 (n=8) 0 4500 801 56Return (% of initial stakes) 41% 32% 0% 0% 300% 53% 56
Virtual Trust Game Results
Variable Mean Median Min Max St. Dev ObsAge 32 29 18 60 11 112Male 0.47 0 0 1 0.5 112
European 0.25 0 0 1 0.43 112American 0.60 1 0 1 0.49 112
Other Country 0.15 0 0 1 0.36 112English Fluency 0.95 1 0 1 0.23 112
Weekly Hours in SL 21.9 14 0 100 20.8 107Experience with SL (months) 5.00 2.5 0.03 36 18.75 110
SL Land Owner? 0.15 0 1 1 0.36 112
Trust Game Summary Statistics
38
Table10
Country Frequency Percentaustralia 3 2.7belgium 1 0.9canada 5 4.5colombia 1 0.9france 1 0.9germany 5 4.5india 1 0.9ireland 1 0.9israel 1 0.9italy 4 3.6jamaica 1 0.9mexico 2 1.8netherlands 2 1.8philippines 2 1.8portugal 4 3.6singapore 1 0.9slovenia 1 0.9uk 9 8.0usa 67 59.8total 112 100
Trust Game Country of Residence
39
Table11
Status Mean Median Min Max ObsAmerican 569 500 0 1500 37European 735 500 100 1500 13
Other 358 350 0 750 6
Male 639 500 0 1500 27Female 534 500 0 1500 29
32 or under 598 500 0 1500 32Over 32 years old 567 500 0 1500 24
No Land 576 500 0 1500 45Land Owner 623 500 0 1500 11
Less than 1 month 556 500 0 1500 171 month to 6 months 584 500 0 1500 19More than 6 months 616 500 0 1500 19
Under 1 hour/day 450 400 0 1000 141-3 hours/day 703 550 0 1500 20
Over 3 hours/day 542 500 100 1500 19Offers are out of $L1500
Trust Game Offers
40
Table12
Table13
Status Mean Median Min Max ObsAmerican 412 250 0 2000 30European 860 500 100 4500 15
Other 833 500 0 3000 11
Male 823 600 0 4500 26Female 434 250 0 3000 30
32 or under 704 500 0 4500 37Over 32 years old 439 250 0 2000 19
No Land 581 388 0 4500 50Land Owner 898 625 40 2000 6
Less than 1 month 657 475 0 4500 261 month to 6 months 591 500 0 3000 19More than 6 months 535 250 0 2000 10
Under 1 hour/day 535 300 0 2000 151-3 hours/day 429 500 0 1500 19
Over 3 hours/day 662 400 0 3000 20Maximum return is 3x offer ($L4500 absolute maximum)
Trust Game Returns
Authors (year) N Rounds Switch rate (percent) Stakes per roundMueser and Granberg (1999) 54 1 19.00 0Krauss and Wang (2003) 67 1 21.00 0Second Life 51 10 33.72 $L 500Friedman (1998) 104 7 39.80 $0.30Palacios-Huerta (2002) 217 10 35.10 $0.40Morone and Fiore (2006) 20 10 41.50 €0.50Kluger and Wyatt (2004) 72 12 53.00 $1.00
Monty Hall Comparison with Literature