Property Rights in Virtual Worlds

Modern capitalism rests on a foundation of property rights, agreements between parties to transfer those rights, and laws that enforce those rights and agreements.  My impression is that property rights in virtual worlds are very simple.  If I have an item in my Second Life inventory, from an inworld perspective I "own" it entirely.  No one can steal it from me without hacking the database, I can use it and sell it as I please.  (EU Lawyer Vincent Scheurer has noted that this ownership doesn't mean a whole lot after leaving the inworld sphere, but that is an entirely different issue.)  About the only sophistication I see is that I can sell it to someone with slightly restricted rights--they can't copy and/or modify it. 

This state of affairs leaves us far from able to automatically enforce some of the most basic commercial arrangements, such as leasing (I can use it but must keep it in good condition), employment (I can bake with the chocoloate, but I can't eat it), transportation (I can move the box, but I can't look inside it). 

Since my goal is to create virtual worlds that can be used to study real-world business (see my first TN post), I use this post to describe some of the property rights that should be supported in code by commerce-oriented worlds, so that code can protect those rights.  If they aren't coded in, expensive and labor-intensive intervention would be required, and no virtual world manager wants that.  (Judging from recent comments on this blog, not many users want human management intervention either.) 

As I am new to virtual worlds, I look forward to being educated by Terra Novans on whether any worlds have attempted to implement rights similar to those I specified, if not, why not, and what I am missing.

Throughout this post, I refer to property rights as "authorities," because I am pretty sure that is how programmers would think of them.  And after all, the term “right” suggests that someone ought to be able to do something, but might somehow be prevented from doing so.  (I have a right to enter my own house, but someone could change my locks without my permission.)  "Authority" suggests a power to do something, not just a recourse if someone prevented me from doing so.

I take a very object-oriented view of the world over which authorities are granted.  The world is populated by goods, all of which have attributes (like quality, quantity, mass, location, etc.).  Some goods are "transformative"--they have production functions that create new goods from old, or simply change the attributes of old goods.  I refer to most of these transformative goods as machines, but if they change the location of the good, I call them "vehicles." For more on production functions, see this TN post.

I specify seven authorities.  Five are authorities over goods or attributes of goods (primary authorities), while two are authorities over other authorities (meta-authorities).

The five primary authorities are:

• Consumption.  An actor with consumption authority over a good has the right to receive the consumption value the good provides to them (which may vary across actors).  (I have written about consumption in this TN post).  Consumption activities may or may not alter the properties of a good.  For example, entering land or a building (forms of consumption) would be unlikely to alter their properties. However, consuming bread or bullets would cause them to cease to exist.

• Production. An actor with production authority over a productive good (a machine, vehicle or data collector) can use the good for production.  An actor with production authority over a non-productive good can use that good in a machine over which they also have production authority.

• Modification. An actor with modification authority over an attribute of a good can change that attribute.

• Transportation. An actor with transportation authority over a good can alter the location of that good by using a Vehicle over which the actor has production authority.

• Information.  An actor with information authority over an attribute of a good can know that attribute.

The two meta-authorities are:

• Transfer.  An actor with offer authority over another authority has the right to transfer that authority to another actor, conditional on the acceptance of the authority by the recipient.

• Assignment.  An actor with assignment authority over the authorities of a new good produced by a machine can offer those authorities to actors, conditional on the acceptance of the authority by the recipient.

This relatively simple set of authorities and meta-authorities can describe a broad array of real-world business situations.  For example, an actor employed as a baker would have a variety of production, modification and transportation authorities over the ingredients he must work with, but would rarely be granted any consumption authorities.  A trucker would be unlikely to receive any authority other than transportation, and perhaps information over the volume and density of the good.  A broker might have a transfer authority over the consumption authority for a good, but not actually have the consumption authority itself.  Note that meta-authorities provide the ability to offer rights to others, but not to impose those authorities upon them against their will—this is essential because some authorities may be undesirable (like authorities over toxic waste).

Note that every primary authority refers to a particular good or attribute of a good (e.g, a production authority over a particular machine).  Similarly, every meta-authority refers to a particular primary authority.  However, a single authority may be held by multiple actors.  For example, many workers in a factory would likely have production authority over the same machine.  Thus, there would need to be a way to arrange voting rights that would deal with disputes--again, without involving human intervention.  Voting is itself a complicated beast....more on that in another post, perhaps.

Let me be the first to point out that I do not discuss intellectual property rights.  For example, I did not specify an authority governing the ability to disclose information to another party.  The reason is that embedding such an authority in code would have little practical value.  For example, assume I am permitted to know the consumption value of a good that I have non-transferable consumption authority for, but am not permitted to tell anyone that quantity.  Would I be able to publish a report that lists my total quantity of consumption value?  If so, I could construct a pair of reports that would communicate the quantity in question (one that includes it, one that does not).  But if I cannot incorporate the information into any report, I would be dramatically hindered in reporting aggregate information.  An additional consideration is that I could easily circumvent the restriction by conveying the information in prose, through chat or instant messaging.

Intellectual property rights are important.  I just don't see any way to have the enforced automatically through code.  Perhaps some readers have ideas on that front.

Comments

[Austin]

1.

I think EVE supports a couple of these property rights . Consumption, obviously. Through starbase access roles, you can set up a bunch of blueprints and resources for others to use for production, but denied any of the other rights. Combinations of those two rights are allowed as well. Courier missions (ideally) allow transportation only, and deny most of the information about what you're transporting.

However, these rights aren't explicit in the game engine; they're artifacts of other in-game mechanisms.

ATITD is even better at implementing these rights explicitly, but I'm a little fuzzy on exactly how they did it; it's been awhile for me. Perhaps somebody else could fill us in?

[Amarilla]

2.

Bloomfield Robert, what are you talking about, dear ?!
" My impression is that property rights in virtual worlds are very simple. If I have an item in my Second Life inventory, from an inworld perspective I "own" it entirely. No one can steal it from me without hacking the database, I can use it and sell it as I please. (EU Lawyer Vincent Scheurer has noted that..."
Who's that " I ", " my "....is that you, Bloomfield Robert ?! Or is it your sissy avatar ?!
Sit down, today you have a - ( minus ) D .
Don't provoke me to make it a " :D " .
LMFAO !

[Robert Bloomfield]

3.

Amarilla,

As I said in the original post, I am taking an exclusively inworld perspective on property rights, so yes, I am talking about avatar-to-avatar interactions, and ignoring the person behind the keyboard.

My guess is that many readers will have a reaction similar to Amarilla's, because discussions of inworld legal issues are so rare. I find that rarity surprising, because simplistic inworld authorities hobble inworld economies.

It might help to think of a game like World of Warcraft. Blizzard explicitly retains all real-world property rights. But that doesn't mean that inworld transactions have to be so simple!

Imagine a world in which you could lease your Sword of Ponderousness to a guild member, and the code would enforce the rights you retain--by, for example, returning it to you automatically at the end of the lease term, not allowing it to be used in ways that would cause more deterioration than you were willing to accept, not allowing it to be transferred to others without your approval, and having lease payments deducted automatically from your counterparty's account.

Personally, I find this pretty interesting stuff, even without talking about the Bragg case, EULAs and "choses in action."

[Peter Clay]

4.

"Authority" is usually called "capability" in computer systems. See the computer security literature. In the real world, people usually disable or circumvent capability systems as soon as possible as they interfere with getting work done.

EVE has a sophisticated system of rights. It's also actively made the decision to support theft and piracy.

Do you want to consider the role of "courts" etc for involuntary transfer of ownership rights in the event of disputes, or are you going for a pure code == law system?

"As I am new to virtual worlds, ..." " I refer to property rights as "authorities," because I am pretty sure that is how programmers would think of them."

Sorry, what's your specialisation again?

[Ola Fosheim Grøstad]

5.

Intellectual property rights are important. I just don't see any way to have the enforced automatically through code. Perhaps some readers have ideas on that front.

Easy, just make sure that information is tied to a single character and useless for anybody else. (e.g. a password)

(Programmers often use words like "access control", "protection", "capabilities", "authentication" etc...)

[Amarilla]

6.

Bloomfield , in that case, there 's nothing interesting - at least for me - there; in fact , what you're suggesting is a game where everybody knows the rules and the laws , and everybody is awared that " God is watching us and gonna punish the sinners " .

Separating the player from its avatar , you aint gonna have any sort of immersiveness or fun.
Boring game. No goals for the player. Why would i pay a subscription for it ? I could very well play Monopoly .

Oh, and : in the real - world ( btw, the only one existing ) biz situations, you don't have a god or a GM watching everybody and everytimes , and also, the real successful biz is based on AVOIDING the laws and regulations.

What are you gonna find out from your sanitized environment ?
What's fun there for me ? To earn useless " skills " ? Useless items ? To become the " top 1 " ? I do that in Counter Strike.
Bloomfield, in order to gather a player in your game, you have to offer something : fun or RMT.
Mix the two, and you'll end exactely at " Bragg vs Linden " case.

[whomever]

7.

Well a capatilistic society may have the rights that you mention, but then there is the other aspect which is enforcement of these rights, which somehow is not mentioned.

For example if I'm a trucker and get a load, what prevents me from selling my load to someone else?

Or take the case of leasing, I can take make a contract to lease an item, then receive the item and then ignore the contract. Seems like a easy way to get some free lunchs. Do you have anything you want to lease to me? Or give me some items for modification, I be real sure to get those back to you.

[Amarilla]

8.

Bloomfield , why is your thread's title :

" Property rights in Virtual Worlds "

instead of the correct one :

" Virtual property rights in virtual worlds " ?

What, tomorrow you'll name a thread :

" Finally, the Bragg case got resolved " and we gonna read there about a dream of your , where your dog named Bragg were almost died but at an end he got saved ? And that everything was just a dream, a fantasy ?

[Ola Fosheim Grøstad]

9.

in order to gather a player in your game, you have to offer something : fun or RMT.

Or simply payment for playing in a lab-test.

Anyway, if economists want to send a design-doc to programmers they might as well use terminology which is shared between programmers and economists: transactions and (pre-)conditions that has to be fulfilled in order to commit the transaction. Any decent programmer should be able to grok that easily.

[Thomas Malaby]

10.

@Amarilla: While I agree that the OP challenges our expectations, from the title on, this is often a good thing; I'd hate to only read that which confirms my expectations. The most recent comment from you strikes me as unnecessarily combative, as have a number of your other comments (to the extent that they are coherent). Are you interested in riffing and needling, or in discussing?

[Amarilla]

11.

"Or simply payment for playing in a lab-test"
In that case it's not about a VW.

"I'd hate to only read that which confirms my expectations. "
"Are you interested in riffing and needling, or in discussing?"
Me too.
I'm interested in discussing ; what are we trying to discuss in this thread about ?
"Since my goal is to create virtual worlds that can be used to study real-world business " .
For me , this is the end of discussion , because ,in my opinion , his goal is not achievable in the terms he posted.

I apologize for my rudeness .

[Timothy Burke]

12.

BTW, I'd agree that EVE has a lot of the operations you're talking about enabled, more so than Second Life, in fact.

One way to broaden out the discussion, or to make virtual property appear a bit less exotic, is to consider other kinds of property to which these authorities may also not be universally conferrable, either because many societies specify through law that these authorities should not exist in certain kinds of property, or because certain kinds of property physically cannot have these authorities. I can make my plasma a property subject to many of these operations, for example, but many societies would specify that I can't do the same to many of my organs. I can own a large plot of land, but land isn't transportable by its nature.

So we'd want to ask: what things are materially inevitable or determined about virtual property, and what things are social conventions or statutes that we apply to the management of virtual property for some reason? I think that would tell us a lot about what is done and not done, doable and not doable, as far as these operations go.

One "material" fact about virtual property that strikes me as affecting intellectual property and potentially other operations is the duality of the actor. The actor is both something in the virtual world and something outside of it. This is a familar problem, but it has a lot of implications for the issues you're describing. In the real world, I might be able to specify an intellectual property right in a book, for example, and know that all the contexts in which I see the book being read in the world around me are governed by the property right I've asserted. (E.g., all the instances of reading I see are either permitted or are violations of my property right.) In a virtual world, I can know where that book is propagating, and whether its usages are in accord with the rights I've specified, but I can't know *within the context of that world* about how that book is propagating elsewhere. My avatar within the world cannot perceive within the social and material boundaries of the virtual world all possible usages of the intellectual property. It's as if in the real world, intellectual property could be consumed both in our immediate material context AND in some Platonic cave, beyond our perception. I couldn't hope to assert rights over the consumption of my intellectual property once the Platonic intellects in that otherworld started consuming it, because within the frame of my own world, I *cannot* know that they're doing so.

In the real world, for example, I could potentially enforce a contract with a worker in a firm that required that worker to keep certain trade secrets confidential even if he left my employment. It's obviously hard to enforce that, but it's possible if I gain information that the obligated actor has divulged such secrets to a new employer. In EVE Online, on the other hand, there is no way within the coded world of the game itself to enforce such a contract because a player who switches corporations may tell other players confidential information out here in the "real world"--code can't reach that far.

[Steven "PlayNoEvil" Davis]

13.

Professor Bloomfield -

Could you clarify if the terminology that you are using is standard to economics and academic studies of business? Most of us in the IT field certainly are used to jargon collisions and confusion.

If there are intellectual property rights and other transactions or capabilities that you are interested in being supported, what are they?

What would you like to see in terms of transactions and capabilities within a virtual world / game, across multiple VWs/ games, between the "real" world and games?

@Amarilla:

There is always utility in formalizing and expanding the capabilities and systems used for games. If Professor Bloomfield's categories are useful for his purposes, or others, then they are certainly worth considering.

Also, the Professor has not made claims as a game designer (as so many do), he is simply laying out the sort of capabilities he is interested in for a virtual economic system. I am sure he will be happy to know that some or most of his features can be satisfied by a number of games today.

It is the responsibility of a good game designer to develop a way to encourage people to utilize the core economic / game mechanics that Professor Bloomfield is interested in modeling...

I suspect he is interested in both systems where these types of transactions are well-behaved and those where they are not. In-game theft as a game mechanic, for example, is probably an interesting area of study, but one first needs well-formed property "rights"/capabilities to make it meaningful and be able to shape both the game and the experiment.

[Raph]

14.

I'll go back to answering the actual original question. :)

This is usually handled by what the game systems term "permissions systems." And virtual worlds have had systems of this sort for decades.

Direct analogues to what you are thinking: All housing systems have this (houses have an owner, and they have permissions for who can enter). Guilds have this (guilds have an "owner" and they have delegated authority). Pet systems have an owner, and so on.

Subtler examples include things like permission to loot a corpse ("production authority," as you term it, is granted to those players involved in the kill), ability to heal other players (in PvP systems, particularly duels, a permissions system often involves only allowing group members to heal someone, in order to prevent interference).

In Galaxies and UO, people could own stationary crafting installations (forges, factories, etc), and grant permissions to others to use them.

The concept of "lending" has existed for a long time. An easily visible example is in There/VLB/etc, where you can lend an item to someone and recall it from anywhere regardless of where the current item holder is.

Typically, the big problem with implementation of more advanced stuff has been that "contract enforcement" is a difficult challenge because violation of contract terms is difficult to assess in code.

[Makaze]

15.

Amarilla, if you hate the aticle so much then just leave. Cleary you're not quite getting what the original author was tryng to convey.

He's not discussing the rights of players to characters virtual assets (a hot topic right now but not the only one out there) but rather the exceedingly simple way that property rights are modeled in most virtual worlds. This may be of no interest to you but it doesn't mean that it's a worthless topic or that there aren't others of us interested in it.

But I digress. I have to agree that we could learn a thing or two about complex property interaction between entities from the real world. EVE has gone the farthest that I've seen in this direction primarily because it has the most complex economy out there.

Complex economies demand these types of interactions which is why we've seen them emerge in the real world. First as informal rules of bussiness and then codified into formal laws. This is the same progression we see in virtual worlds where players institute them informally first, for example by having equipment shared by the guild and relying on their honor not to steal it. This works well in small groups because there's a tighter connection, preventing people from stealing, and because being kicked out of the group and labeled for a wrong doing is a significant form of punishment. But once group size scales then things start to break down thus limiting the complexity that the economy can grow to. This is becasue in a large enough base then there is always someone willing to deal, new groups to join, new newbs to fleece.

This is the point in the real world where we created laws governing tranactions to pick up the slack where personal responsibility (or threat of violence) leaves off. We enforce these laws through punishment (fines or jailtime) but that doesn't translate well to a virtual world especially a gamey one. People will still do them on implulse and then be upset because the response is unfun (and it wouldn't be much of a discouraging punishment if it wasn't). So rather we would simply force players not to break the laws through hardcoded world behavior.

The problem today is that these interactions are emerging but in most instances we haven't implemented world rules to back them up. This prevents the economy from growing in complexity, which may be OK or even desired in some situations. This is because there are no sufficient enforcable consequences for actions that break the informal rules once the population participating in the economy grows large enough. Of course which interactions to include is implementation specific but I believe the above list, odd terminology aside, is a fairly decent one.

[Makaze]

16.

@Timothy Burke
You bring up a good point in your last paragraph about the inability to have somthing along the lines of an NDA or non-comp in a virtual world. I think the reasons behind that have to do with the fundamental differences in which we enforce compliance between the real and virtual worlds.

In the real world anyone can do anything "wrong" they feel like but then they may face punishment for doing so after the fact. Meaningful punishment doesn't work all that well in virutal worlds especially those meant to be fun so we tend to just prevent people from doing "wrong" things to begin with.

If we can't write an algorithym that can accurately determing if a rule is being broken and proactively stop or roll back the action then we've got a problem. As previously stated by everyone there's no code that can prevent people from doing things in the realworld so I think that would rule out things such as NDAs. Which somewhat interestingly the anonimity of the internet is doing a pretty decent job of making joke out of.

Patents and their subsequent licencing, which is another facet of intellectual property, on the other hand I could see as being enforceable as some sort of pattern matching algorithym could be devised to determine if a crafted product is too similar to another already patented one if the crafting system was complex enough.

[Thomas Malaby]

17.

there's no code that can prevent people from doing things in the realworld

Well, except for architecture, urban planning (especially street design), etc. ;-) Let's not make the mistake of associating one mode of governance (code) with the online and another mode (law) with the offline. (And let's also not forget that social convention and the market are other modes of governance that obtain in all these spaces.)

[Makaze]

18.

@Thomas Malaby
Sorry, let me clarify, there is no virtual world code that can prevent someone from doing something in the realworld.

Well, except for architecture, urban planning (especially street design), etc.

I'd make a distinction from that type of code and the type I was discussing. That's more of a world building type restriction rather than abstract rules that govern player actions. If we were to change the presence of gravity then that would be analogous to the enforcement of contracts. They both alter the physics of the game where as the placement of streets alters content but does not fundamentally change the rules of the game.

Let's not make the mistake of associating one mode of governance (code) with the online and another mode (law) with the offline.

But that's exactly what I am doing. We can't realisticly write code for the realworld as we can't enforce physics at whim so we rely on laws which lead to punishment if broken. Thus making laws/punishment the enforcement method of choice offline. Punishment in games tends to lose players and in them we DO have the luxury of arbtrarily changing the worlds physics to suit our needs. Thus making physics altering code the method of choice for enforcement of rules online. Now these two systems code and laws are not identical but that are attempting to accomplish the same goal and that is to force people to act a certain way. So I am saying that while code is online only laws can be used in either but really are less that ideal online.

Social convention tends to break down as population rises and is thus in the realworld replaced by an enforement mechanism. On population limited worlds, UO shards, it's not that big a deal as the poulation is capped to a size that makes social convention remain a strong factor. But in larger population bases it loses it's teeth and complex economies would have a hard time developing at population levels where social convention is still an important factor.

[Thomas Malaby]

19.

But while I agree with you that there is a difference in *degree* of control through code that is possible in virtual worlds and in other domains, I don't see it as generating anything like a hard and fast distinction. The code of architecture is not qualitatively different from the code of a virtual world. Just because a designer can change the apparent gravity of a virtual world doesn't make the *kind* of control different from that which is used in prisons, airports, and many other places in our built environment (leaving aside for the moment the way these spaces are increasingly encoded in and through software). Code exists as a mode of control offline in several ways; there's no way around that.

What is more, there are limits to what even code in a virtual world can do, as it too is constrained by things like lag and other material features of the internet and related technologies.

Law/punishment is not in my opinion fairly characterizable as the control "method of choice" offline. I think we are far more constrained and controlled by the code of our built environment than by legal structures, and this has been written about by many scholars, such as Michel Foucault.

As regards social convention, it continues to exert an enormous influence even in complex economies. The fact that population increases tend to fragment the existing web of social conventions doesn't change the fact that people live by and rely on them, which is why massive business deals can stand or fall on personal connections and cultural proprieties.

So in all these respects I think you're admirably trying to simplfy matters, but in a way that obscures more than it illuminates.

[Dr. Cat]

20.

Timothy Burke wrote:
So we'd want to ask: what things are materially inevitable or determined about virtual property, and what things are social conventions or statutes that we apply to the management of virtual property for some reason?

This is the key question, to me. In fact, some of the most fundamental and inherent aspects of real world objects are only "one possible option" when you're creating a virtual world where the programmer(s) can invent any form of "laws of physics" they want. Including many possibilities that are totally impossible in the real world.

The right of Consumption, for one, presumes a virtual world in which some of the virtual objects can be "used up". In a world where the creators decide "It's not fun to lose stuff you managed to get", where every item lasts indefinitely (or only vanishes through an inactivity timeout on your account, but not through an in-game consumption mechanic), the right of Consumption isn't relevant.

Likewise, ideas about possessing, owning, selling, renting, and controlling an individual object are only relevant in a virtual world where some sort of "artificial scarcity" is implemented. Granted, most do this, but in a world where people have a "star trek replicator" type of ability to make as many copies as they wish of any type of object that exists in the game world, ideas like selling and renting one individual copy of an object are possible, but would by irrelevant and unappealing. People would just make their own copy rather than buy yours. Or 100 copies. What's potentiall still relevant here, of course, is intellectual property law. If copyrights, patents, trademarks, etc. are in force in the virtual world in question, then they place the only limits on what can be copied. (Other than the amount of hard drive space available.)

One could go further and consider a world where the license agreement states that only public domain works can be created/uploaded within that space, and if you create a new work of your own you agree you will only place it within that world if you're freely choosing to place your work into the public domain as well. In such a world, everybody could have everything, and there wouldn't be a conventional sort of economy or notion of property, value, money, etc. Value would be assigned to those things that still have significant scarcity - human time and attention, for example. I also think it's very interesting to note that in any virtual world, a "weird" one like this or a more conventional one with scarcity, consumability, etc. there's a different sort of status for things that connect to the real world in some way. A game currency that is reliably able to be converted into real world dollars/euros/yen tends to inherit some of the attributes of that which it is tied to. Information like "what another player's phone number is" carries significance and consequences that are different in nature from any purely "in-game" information, like "where did the dragon take the kidnapped princess". We're going to see the lines blur and the information get connected more and more, as the current generation of young people use the web, messengers, online games, and cell phones as their social space to meet, chat, make plans for get-togethers, share photos and info, etc.

Of course few games are likely to abandon the idea of the comfortable, familiar, and often useful real-world properties of objects such as scarcity, consumability, etc. But I think the thought experiment of considering that they aren't necessarily present in all virtual worlds is useful, because it stretches our brains to the limits, and hopefully makes us consider that there are limitless possibilities in-between the "just like earth" consumability and the total absence of same. You could make a world where you have to eat a loaf of bread five times before it finally vanishes, instead of once. Or you could make it so eating a loaf of bread makes it dissappear, but also makes a magic glowing bird materialize, who becomes your friend and servant for life, and carries all of your luggage. You could make objects scarce and with programmatically enforced ownership, but every tuesday all shirts, magic swords, and jellybeans randomly transport themselves from one person's possession to another, having their ownership status also transferred to that person. (Or some random third person.)

Most such possibilities are frivoulous, useless speculations that wouldn't lead to a useful game, economy, or system of property rights. But simply trying to copy how the real world works begs the eternal question (at least this question is eternally in my mind.) What are the chances that, of all the possible sets of laws of physics conceivable or possible, that the ones we have in our world are the most optimal possible set for supporting the types of results, economies, behaviors, personal interactions, and/or societies that we want to see emerge? In a virtual world where we make every rule, shouldn't it be possible to improve on reality in some way? Here's one simple example. In the real world, let's say I loan my lawnmower to a friend. Even if I make him go through the hassle of signing a written contract that says he'll return it in ten days, he might do so - or he might not. Further, if I choose to use the real-world legal system to force him to return it, this will likely involve more time, effort and expense than I would like - not to mention incurring some ill-will on the part of my buddy. In an online world, we can make a "loan" command that sets up the object to automatically, magically teleport itself from my buddy's posession back into my virtual garage, or even my pocket, the very instant the specified amount of time has elapsed. While we could never make reality work that way, I think most people would agree it's a better way for things to be. (Excepting those few who enjoy making a practice of borrowing things and keeping them.)

While some aspects of reality like "consumption" are little experimented with in online worlds (most adapting a simple "use it up, and it vanishes instantly" model), they are in fact taking a variety of approaches to the fundamental mechanic of scarcity - the means of production. Indeed, one of the more notable attempts to make a more realistic simulation of production, the original version of Ultima Online (animals would eat each other, breed to make new animals appear, etc.) found quickly that making a workably balanced simulation was far more difficult than they thought - with the players coming into the world like a swarm of locusts, stripping it of almost everything of any value or use whatsoever in a frighteningly short space of time. So they adopted a model of periodically spawning of resources out of thin air, as many other games have. In puzzle pirates, some resources are produced through the "labor" of playing puzzle games. Other methods have been tried in various other games - and I'm sure new ones are waiting to be thought up and attempted.

So when you start out by asking "What sort of rules/laws should exist and how should they be enforced in the programming of virtual worlds", I have to think "Well, that depends on what the fundamental physics are of how objects and property work in the first place. The question can have different answers in different worlds, depending on how they work."

So I would say the more important meta-question you should ask yourself (and others) is more like the following: "What kinds of physical properties and behaviors should objects in a virtual world have, in order to allow the kinds of uses, laws, and interactions between people that would facilitate the most 'ideal' society?" Of course your answer depends on you first deciding what exactly is the ideal you are striving for. :) It's also worth considering that the answer may involve different classes of objects having different physical laws they follow, not to mention having multiple virtual worlds for different goals and/or different audiences, each striving for the best laws of physics to support those goals.

I know my own plans still involve a dual system of currency, with the "permanent" money tied to a fixed exchange rate with dollars, and the "temporary" currency of the attention economy vanishing automatically once a week. It should prevent the hoarding problem that occurs in some virtual economies and stimulate spending - particularly on anything that has any measure of permanence to it (or helps further one's chances of earning more in the future).

All that said, I think in many cases the issues surrounding intellectual property may turn out to be far more important than the laws regarding simulated physical property. Also, "merely" millions of people are interested in getting imaginary magical swords. But anything that has some interest, value, or usefulness in the real world - be it meeting a future spouse or lover, or getting real world money that can be traded for food, alcohol, clothing, or the paying of rent - those are things that billions of people want. A hundred years from now, will billions of people want any totally imaginary commodity in a simulated world, which is only scarce because some game company decided to make a thousand of them rather than a trillion of them? (And which a rival game company - or a hobbyist in their basement - could set up a rival world with a far more plentiful supply of?) I seriously doubt it. A huhdred years from now, will billions of people still want love, sex, food, and booze, and value anything that helps them in some way to acquire those? Count on it.

There will be non-real-world things with great value in virtual worlds, don't get me wrong. A hit TV show or movie is worth a mint, and those are pretty "virtual" things when they stream through the screen in your living room or local movie theater, leaving you no physical item that you paid to have - just an experience. Things of value will be created in virtual worlds, and already have. But it's not the "pseudo-physical objects and their artificial scarcity" where value truly lies. It's more in the value of information and of relationships - things that are far trickier to make "property laws" for.

[greglas]

21.

Robert --

To echo some of the comments above, perhaps, I'm not sure exactly what you're talking about when you talk about implementing a baker's or truck driver's right to property. (This would probably be called a bailment).

Here's the issue: how do you "implement a bailment"? Offline, you do so more or less by simply delivering the chattel and then expressing to the baker or the truck driver that they have no right to consume the object. This same process could occur in a virtual environment that supported transfer of a property. Indeed, as someone noted above, guild resources in WoW and other VWs can be distributed according to certain terms. So we do have the possibility of virtual bailments, virtual leases -- most all standard offline arrangements.

But we generally don't see the complex property interests that you describe within virtual environments for two reasons. First, as you note, the enforcement mechanisms that exist offline do not exist in virtual worlds. If your guildmate runs off with the bread or the cargo, there is no recourse. Potentially you could go to the GM, but the GM will have no obligation to enforce the terms of bailment. (I'd be interested in anecdotes about GM enforcement of bailments if anyone has them!) Second, many virtual properties are not simulated to be as malleable or interesting as offline chattels in terms of how they acquire value. You should try cooking, blacksmithing, or alchemy in WoW -- so much easier than offline!

All this is non-responsive to your question, perhaps, since you say:

I use this post to describe some of the property rights that should be supported in code by commerce-oriented worlds, so that code can protect those rights. If they aren't coded in, expensive and labor-intensive intervention would be required, and no virtual world manager wants that.

But of course, without that, these bailments that are "supported in code" aren't really bailments of property, they're something else. A fence isn't a law of trespass. For your research purposes, the ability to simulate a bailment with inflexible code may be similar enough to a legal bailment to provide you with valuable data, but I'd caution against equating a "code supported bailment" with a bailment at property law.

[greglas]

22.

That was really a great comment (or perhaps a mini-essay) by Dr. Cat...

[Makaze]

23.

To me it does signify a different kind of control rather than only a degree. Think of it in layers if you will. Each subsequent layer of control relys on previous ones to shape it and determine its effectiveness. Walls in airports are great and all but that is predicated on the fact that people are physically stopped from simply walking through them. In terms of a virtual world the walls are content but the inability to walk through them is physics. The defining characteristic seprerating them to me would be that man can create content whereas it takes a god to create physics.

In the context of the article then the ability to have contracts would be content based. Actually there is nothing stopping players at all in any game from drawing up a contract. There is also nothing at all stopping them from disregarding it later. The absolute enforcement of contract terms by a higher power on the other hand would be physics based. In the real world we can't do that and so use punishment to encourage people to follow the contract (or more appropriately discourage them from breaking it).

I was never saying that social convention goes away completely. But rather it cannot be the sole arbiter of interactions in complex economies. At some point it must be bolstered by enforcement. In fact my wording that it looses effectiveness may be inacurate as it doesn't. Rather I should have said that eventually more is needed and social convention only goes so far thus lowering its relative effectiveness.

[Gando Thurston]

24.

Greetings! I won't have time to re-read the article nor read all the comments, so I hope this isn't redundant.

One thing to consider is that most digital content is easy to copy, which can change the nature of the game.

For instance, in the case of a lease on an object in Second Life -- you don't need it returned, you have a pristine copy. I could write a script, that resides in the object itself, that has it removes the object from the game after the lease period is up.

They have this feature with go-karts in Second Life. You click and get a copy of the go-kart, enjoy your runs around the track, and when you step out of the go-kart "poof" it's gone.

[Thomas Malaby]

25.

/second Greg on that, Dr. Cat. You should post that somewhere where it would get top billing and then can be more easily found and linked. Do you have blog or similar, at Furcadia's site or elsewhere?

[Thomas Malaby]

26.

/sigh

^"a blog or similar"

[Hellinar]

27.

@Dr. Cat: Yep, an interesting read. I too am interested in Virtual Worlds that change the physics and everyday assumptions. Its interesting to see how that changes social and economic relations. And it could yet be useful information, if our technology undermines some of the scarcity on which our current economy is based.

@Robert: I’m thinking if you want a really close fit between your virtual world and a business education class, you might have to build your own. Some worlds, like SL and EVE do promote playing at running a business. But even in those, the emphasis for most participants is on fun rather than profit. And “fun” rather screws up some of the assumptions on which business is based.

[Andy Havens]

28.

Dr. Cat said: "...but in a world where people have a "star trek replicator" type of ability to make as many copies as they wish of any type of object that exists in the game world, ideas like selling and renting one individual copy of an object are possible, but would by irrelevant and unappealing. People would just make their own copy rather than buy yours. Or 100 copies."

Sure. And that's the point of encoding the "rules as code," just like you encode the damage potential of a weapon, etc. as code.

But imagine a scenario, for example, where there is infinite, free reproduction of all objects... but where an original object can be retained for singular, personal use, only if created by the player. So, if I give (or sell) any thing in game, it becomes "copy at will." But if I just use it myself, I can be unique. Or perhaps a group variant; if a member gifts/sells the object outside the group, it "goes public."

Economic rules are just as important as any other set of rules; classes, weapons, crafting, groups, combat, etc. And where I see nothing wrong in defining them pretty well (as Robert does) one thing that needs to be kept in mind is that economic rules (if encoded) will always be part of the entire rule system, and will interact with all the other "stuff" that goes into making up a game/world's total personality.

For example, transportation authorities were hugely important in "Snow Crash." They are essentially cosmetic in Second Life, because of point-to-point teleportation.

[Robert Bloomfield]

29.

Thanks to everyone for such detailed comments.

A couple of quick responses. Responding to the very last comment first:

@Hellinar, yes I totally agree that "if you want a really close fit between your virtual world and a business education class, you might have to build your own." That is precisely my plan, and I am grateful to TerraNova for giving me the opportunity to get lots of helpful feedback. I can tell that many commenters still don't quite get what I am trying to accomplish, which I believe is quite different from what others are pursuing. It might be helpful to take a look at my first post (link in paragraph 3 of the original post).

@Dr. Cat, very insightful. As a business prof who wants to use virtual worlds to understand real-world business, I do intend to use a lot of real-world physics. (See my links in the original post). There are tremendous opportunities for creativity, but many of them won't help me achieve my particular goal.

@Steven "PlayNoEvil" Davis, my terminology is probably pretty standard for experimental econ/business types (though it is hard to say, because not many of my colleagues have yet become interested in, or even aware of, virtual worlds, except as a novelty). But my terms are clearly non-standard here, and mark me unambiguously as a noob.

If anyone knows of a good paper that discusses these issues in a consistent and coherent terminology, either for world/game developers or lawyers, that would be great. But I fear there is little consensus, and that most of what has been written focuses on the real-world legal aspects of the more unusual aspects of virtual worlds, which is decidedly NOT my focus (though it is very interesting).

More to the point, I think there is a huge divide in language and perspective between business faculty those who have been immersed in virtual worlds for some time. Business education/research is big business, and virtual worlds provide excellent opportunities, so this is a divide that hopefully won't last long, for the sake of all sides. If anyone is interested in collaborating on an article that would help this dicussion converge, let me know. The lawyers who are posting are perhaps in the best position to bridge this gap.

[Raph]

30.

Honestly, I think that you will get less traction talking to the crowd here, in some ways, than if you just sat down for a good one-on-one with a few virtual world designers. The basic objective you have is to learn what's been done in terms of virtual economy design, and what can be done, and there IS a ton of material on that. It's just not in places like TerraNova, because it's mostly a game design question.

As far as papers, you may want to find Sam Lewis' slides from Austin Game Conference on virtual economies, and the original Zack Simpson UO economy article. There are probably some on SWG's original setup lurking too.

[newbie]

31.

I'm not sure i've understood : you want to study the real word businesses ; your goal is to create virtual words wich can be used to study that;
further, you want to implement property rights in those virtual worlds, mostely in those worlds commerce-oriented.
IMHO, after reading the whole thread , the problems are :
1-the economic relationships in a virtual world are lacking significant aspects of the real world's economy,due to their innherent limitations;

2-the property righs implemented in such an utopian and restrained economic environment , would also lack significant aspects of real world's property rights;

The result seems to be : an environment where the economy ,and the property rights governing it , are so much different toward the real world ones , that makes it unappropriate for study , if the goal is to learn things of value and appliability to the real world business.

I feel like i need to insist in arguing my opinion :

The differences between the real world economies /property rights , and those possibly implemented in a virtual world are so significant and fundamental , that i cannot imagine what could be learn from there. That virtual world become so much virtual that it have no similarities to the real world economy anymore.

Ofcourse, as long as you keep the economic and legal rights distinction between player and avatar.

[Robert Bloomfield]

32.

Newbie says "The differences between the real world economies/property rights , and those possibly implemented in a virtual world are so significant and fundamental , that i cannot imagine what could be learn from there."

Economics is always an exercise in imagination. Economists create models that are simpler than the real world, because the real world is far too difficult to comprehend. The trick is in making sure that you don't simplify away the part you actually want to draw conclusions about.

So I agree that having code enforce property rights in a virtual world, when courts do so in the real world, creates differences between the virtual and real world. But would those differences actually make it harder to understand lessons about factory design, incentive compensation, competition in product markets, etc.? I don't think so. But code enforcement will dramatically simplify the administration of the world (as well as what players need to know).

Finally, let me point out an irony. My posts to TerraNova have elicited a number of comments along the lines that virtual worlds are so different that I can't possibly learn about real business. But academics around the world for decades have been confidently asserting that they can learn about real business in extremely simple and tightly controlled laboratory environments--an assertation validated by Vernon Smith's Nobel Prize in Economics several years ago, for creating the field of experimental economics.

I am quite sure that it is possible to create a virtual world that looks more like the real world than the typical econ laboratory does. So the question on the other side--asked by Timothy Dang in some of my earlier posts--is whether virtual worlds will simply be too complicated. That is, TOO MUCH like the real world, rather than too little.

I believe there is a middle ground that will leave us further ahead than we are right now.

[Timothy Burke]

33.

I wouldn't pay much attention to the view that you can't learn anything from virtual worlds in this way.

I do think there's a complicated epistemological problem about designing VWs *as* experimental objects as opposed to seeing them as valuable sources of data because they're not experimental objects. E.g., it may be that the more you design them specifically to produce testable and measurable results, the more you lose the mimesis they have to the unmanageably complex real world. Modelling in economics already has this problem, that it uses tractable models to make predictions about the world, and then sometimes forgets that the world is not the model, and therefore that the simplifications performed to make the model possible to work with also make it something other than an empirical description of actually-existing events and practices.

[Ola Fosheim Grøstad]

34.

Btw, this thread covers some aspects of "IP-rights" in virtual worlds. In case you missed it: The Better Mousetrap.

[greglas]

35.

Robert --

I guess we all bring our own disciplinary baggage to the table -- your opening post asked about legal property rights so I wondered if part of your hope here was to offer some advice to lawmakers. I'm somewhat wary about the potential pitfalls you could encounter in that, as explained above -- but I don't have any doubts about experimental economics generally. I could imagine ways to structure experiments where the data collected could be quite informative.

Perhaps, if it isn't too much trouble, you might outline for those of us who don't do experimental economics a possible experiment with legal property rights in virtual worlds? If you could, I think it would help clear up the confusion some of us are having and also alleviate our concerns about how the data might be used to offer policy advice.

[Larry Kyrala]

36.

@Robert: I think you can reduce "consumption" to a special case of "production". If you "produce" a cake, the eggs, flour, etc. disappear in place of a cake. (i.e. most production results in a input and an output). In "consumption" you might consume the cake to gain health. Abstractly, this is the same as production where there is an output effect instead of an output object.

philosophically speaking: I think there will be problems with a virtual world that attempts to place such rights at the level of "physics" (i.e. a "God" of legal contracts ensuring that everyone does what is "Legal"). The problem is fundamentally the same as Digital Rights Management.

What happens if you don't want the good? Does the license allow a "return"? (i.e. I charge you $20 for a get-rich-quick-book that turns out to have the words "publish a get-rich-quick-book." in it.) According to the "laws" of the world, you can't avoid paying me the $20 even if you feel that I've tricked you.

A baker makes a sheet of cookies -- some turn out ok, some not. (ala Entropia's production model)... what does the Baker do with the "bad" cookies? Sell them at full price as per the "contract"? Eat them? -- well he can't unless he fiddles with the inherent licenses... does he have permission to?

This uncovers a flaw in the assumption that a world with automated licensing enforcement will not involve human intervention (i.e. trials, prosecution, enforcement, arbitration)... because you've simply moved human intervention into the management of the licensing options themselves.

Even if the participants were willing to accept such a burden, another philosophical question from ethics is more pressing: in a world where only "good" can exist, is there such a thing as "morality"?

How reliable a model do participants in such a world provide when they are loosed upon the unregulated "real" world?

[Jeff Cole]

37.

Robert BloomfieldI use this post to describe some of the property rights that should be supported in code by commerce-oriented worlds, so that code can protect those rights.

Your post begs the question of whether there exists any need to protect those rights. Before describing any necessary authorities, you need to describe the qualities of a "commerce-oriented world" in which there exists a need to protect the rights you identify. See Raph's post above.

Until you've characterized any commerce-oriented world, I think it is premature to characterize any "authorities."

[Northmvy]

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