At the moment on the MUD-Dev discussion list there is a discussion on economic models of VWs. One of the contributors, a MMOG player and investment banker named Daniel Harman said "Personally I'd love games to setup markets that took a few lessons from the real world markets, and facilitated more complex trading strategies. Its would add an interesting axis of entertainment to the game. The first things to add would be player leasing of ships/vehicles (required for goods transport), insurance markets, contracts (should be limited so that humans are not required to arbitrate), multiple exchanges with limited memberships (creates arb opportunities), commodities markets (with seasonal variations etc)."
Obviously this is a complex undertaking, for the reasons that Nate Combs and you all articulate. But let us put aside the issue of difficulty for a minute and ask if it would be a good idea to allow user access to in-world financial markets? Obviously it's not a good idea if your economic system is profoundly, irredeemably broken (as most of the VWs are) because you just open up even greater opportunities for sploits: "Hey, I've discovered how you can leverage that gold dupe through margin buying on the EQ gold spot price...." But there do seem to me to be some obviously interesting ramifications of this idea:
1. Game devs will quickly discover if their economic system has problems. To give you an example, some students and I are building a database of virtual assets in a few games. Once you see the charts for various asset classes you start to realize that they are subject to stale-price market timing, time-sensitive market arbitrage opportunities, and supply shock buying opportunities. (More on this another day, once we've extracted all the money we can from the system--and Mia Consalvo and her conception of "not-cheating in games" can kiss my rosy red bank account)
Devs can use the market to discover how to fix their economic/fiscal model. As a result they would spend less time pullling every single lever of economic control and be like real world central banks who reset the economy with a very parsimonious set of controls (typically a small number of monetary and fiscal policy controls like interest rates and currency purchase)
2. Devs would provide a whole new set of fun things to do for people like Julian Dibbell, who don't really want to play the "game". They want to play the "meta-game" of the economy.
3. Devs can accommodate cat-assers like Julian D without offending RPGers like Ted Castronova. The typical reason why the role players hate the ebayers is that the ebayers kill the play-acting. Well, if you provide the market and economic mechanisms within the game, then the market-game becomes part of the roleplay-game, and no-one loses (assuming the markets are not primarily in assets that are the subject of the current ebaying concerns).
An issue with this was given by Mike Sellers (a game dev at Online Alchemy) on the MUD-Dev list: "I'm not sure I'd want to unleash the full force of things like factoring or shorting in markets, as these can become quickly bewildering. " But I don't think this is a problem. I happen to know very little (and care even less) about derivative markets in the real world, but since I choose not to invest or follow these markets I don't have to care if they're bewildering. I get on with the stuff I care about--like hanging around MMOGs--and leave the Black/Scholes Option Pricing formula to the kinds of people who care about such things.
4. The final reason for this is, of course, the dev gets to run the market and keep the commission on the trades, thereby creating a new income stream.
Am I missing something here? Is it actually a bad idea?