Goldilocks and the Three EULAs

Many TN readers know that I have been interested in developing a virtual world platform (Worlds For Study) that can be used to study regulation.  To get an idea of what I mean, consider the following experiment in a game like World of Warcraft or Entropia, except with a business focus (hostile takeovers, but no dungeon raids; I think of it as World of Bizcraft):

• Create two virtual worlds that are identical except for one regulatory feature (such as consumption taxes instead of income taxes).  After months of play, how would the worlds ultimately differ in terms of wealth creation, income inequality, or whatever other features interest you?

There are obviously many hurdles in succeeding in this ambitious project (as pointed out by the excellent comments to these posts), but also tremendous educational side benefits.  Today, I want to focus on one particular issue:  Can one craft an End User Licensing Agreement (EULA) that gives players few enough property rights to allow the world developer to impose their own inworld regulations, while still protecting property rights enough that players have strong incentives to pursue profit?

The EULA can't protect user's rights too much.  Despite criticisms that Linden Lab’s terms of service don’t protect residents property rights sufficiently, it is actually the strength of such protections that allows the regulators to intrude.  Legal scholars (see Camp or Lederman ) can argue that Second Life residents have clear enough interest in their virtual goods to justify taxing the sale of virtual items for Lindens, or even the exchange of one virtual good for another (like virtual clothing for virtual land).  Similar arguments make it hard to keep SEC and state banking regulators out of the Second Life financial sector, because one can argue that this virtual institutions are actually stock exchanges and banks.   

Arguments for inworld taxation and regulation of World of Warcraft are much weaker, because WoW’s terms of service don’t permit real-money trade of inworld assets.  As a result, it is hard to argue that receiving a powerful weapon, or even inworld currency (gold) provides something of taxable value, or that creating a financial scam actually costs anyone money.

So here is the Goldilocks problem:   The methods of experimental economics require that studies of financial regulation provide real incentives for participants, so that we know their economic motivations (they aren’t pursuing extraneous and unknown goals).  So a world with such a goal would require a EULA that protects residents property rights.  However, such property rights might, my definition, also be strong enough to cause the intervention of real world regulatory authorities—effectively eliminating the possibility of conducting the “what if regulation were different” experiment.  All worlds would have the same (real world) regulation.

So, is it possible to craft terms of service that are strong enough to allow for clear economic incentives for participants (necessary for valid research),  while simultaneously being weak enough to keep real-world regulators at bay? 

Does it make a difference that the game would have an explicit educational or research objective?  This can matter in other circumstances.  As I learned by working with Cornell’s legal counsel some years ago, I can legally have participants pay an entrance fee to play poker in my laboratory, as long as my goal is education or research and I am not making any profit.  The latter feature is actually the most important one, but the educational/research goal would make it easier to get a letter from the district attorney guaranteeing safe harbor.  Maybe the lofty purpose of the virtual world enterprise I am proposing now would at least make it easy to get a letter of no action, as the Iowa Electronic Market did to run what would otherwise be considered a futures market under the jurisdiction of the Commodity Futures Trading Commission.

Comments

[Shava Nerad/Shava Suntzu in SL]

1.

I think a larger question would be how you would attract the critical mass to these different venues to have a good study. And would attracting folks randomly to different regulatory environments that they could mini/max skew your results?

We've talked about this of TN, but I really think you'd be better doing observational studies in existing rich and complex economies such as SL, rather than trying to create new VWs.

[Robert Bloomfield]

2.

I am not surprised that the first comment is dedicated to wondering whether my goal makes sense in the first place. Readers have disussed these issues in prior comment threads (see links in the original post), and those comments have been very helpful in allowing me to refine my plans. I promise that everyone will have plenty of opportunities to comment on my overall goals, and the many problems confronting this endeavor.

For now, though, I am asking readers to humor me: assume that I have already convinced someone to finance my pursuit of this goal, and that the Goldilocks problem is the only one that stands before us.

After all, most of TN's readers are gamers at heart--I know you can suspend disbelief!

[greglas]

3.

Is it essential that the players have some kind of economic incentive?

One thing I found astounding about Ted's Ludium, and that I find astounding about WoW, Harry Potter, the NFL fans in my family, Sudoku mavens, etc., is how incredibly serious people can be about pursuing goals where there is no money involved.

I don't know much about making the empirical claims you need to make, but couldn't you just structure the experiment to provide ludic rather than monetary rewards? (You would, I suppose, need to make things "fun" to do that.)

[Robert Bloomfield]

4.

@Greg,

Experimental economists are surprisingly persnickety. They rely very heavily on the notion of "induced value." I discuss this in another post:

http://terranova.blogs.com/terra_nova/2007/06/inducing_value_.html.

Here is the key excerpt:

Vernon Smith (who won the Nobel for being the father of experimental economics) laid out the elements of induced value in 1976, and clarified them in 1982. Modifying Smith’s discussion to reflect my own views, inducing value requires four features:

Rewards. There must be some reward of value that participants can pursue within the experiment.

Nonsatiation. Participants must prefer more reward to less (they cannot be indifferent, no matter how much they earn).

Saliency. Participants must be aware of how game outcomes map into rewards.

Dominance. Rewards must be large enough, relative to participants’ uncontrolled preferences, that those other preferences have the same size and type of effect on behavior in the controlled setting as they would in the real world.

Satisfying all four of these conditions allows the experimenter to “induce” value preferences in participant that the economic theory assumes hold in the real world.

Believe it or not, if you don't satisfy these conditions, it is virtual impossible to get your work published in a top economics journal, or even to have it taken seriously by experimental economists.

But I take your basic point: one way to deal with the issue is to come up with ways to make sure people are engaged--and that we know what they are truly valuing--without driving their decisions with with the promise of cash reward.

[greglas]

5.

Robert --

Sorry, I forgot about that post -- June was kind of hectic.

I realize I'm kind of ducking the issue of TOS/EULA drafting here -- perhaps you really do need university counsel's advice on that -- but one observation I'd make is that in non-experimental settings, most people aren't reading VW TOS/EULA terms very closely unless they're sinking major investments into VW platforms. The failure to seriously consider the terms of TOS/EULAs is endemic to the e-commerce marketplace and the shortcomings can have negative effects for businesses as well as individuals.

See Mark Lemley's recent comments about the situation here:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=917926

So that's another dodge of your opening question -- if you're running a simulation, perhaps the behavior of your participants isn't so much based on what the contract says, but upon what your participants think you'll be doing based on the other signals you're sending.

[Tim Holt]

6.

I'm going to echo the, "But aren't you forgetting about having players?" part. It's a bit like a proposal I saw once that had a lot of details about how the proposed game would teach and provide learning, but not once did it say, "And here's how we are going to make it fun!"

Unless the discussion is purely academic, one must seriously address the, "And how will we get the people?" question, just like the, "And how will this be fun and engaging?" question.

[Robert Bloomfield]

7.

@Tim, "how will this be fun and engaging?" is a good question that must be answered--but not in *every* post! That will surely deserve a comment thread of its own...I just hope it won't be this one. :)

For now, let me just point out that many people find business games very entertaining. Witness the success of all of the "tycoon" games, and the active business communities that have arisen in Second Life--which appear to have a large entertainment component, given the low pay people are receiving.

Moreover, players participating traditional experimental-economics studies get paid for their time (in amounts determining by their performance). I would anticipate similar arrangements for players participating in research studies based in virtual-world.

So between business being intrinsically fun for many people, and getting paid for your efforts, I don't see a fatal flaw that makes the original post moot.

[Amarilla]

8.

Robert,can you please be more specific on this :

is your VW supposed to bring you cash ? Or is it a VW where you're willing to spend some cash for your research purposes ? Any EULA starts from maker's goals. I really don't understand what your question is . It is very simple to draft a EULA , it's not rocket science as long as your goals are well defined and aknowledged.

There is not even such a thing like "So here is the Goldilocks problem:...". That's a false problem . A virtual one. A Metaversal one. It doesn't exist. Asking the right question is 1/2 of the answer.

[Jeff Cole]

9.

I think the TOS/EULA is a red herring. It's the implementation (i.e. world mechanics), and not the TOS/EULA, that determines an expectation of rights allocation. The TOS/EULA may operate to limit to a lesser or greater degree those expectations, but does not serve as the source of the expectations. Bragg illustrates this.

So, in the end, Robert, you are essentially asking, "how will this be fun and engaging?"

[Amarilla]

10.

"So here is the Goldilocks problem: The methods of experimental economics require that studies of financial regulation provide real incentives for participants, so that we know their economic motivations (they aren’t pursuing extraneous and unknown goals). So a world with such a goal would require a EULA that protects residents property rights. However, such property rights might, my definition, also be strong enough to cause the intervention of real world regulatory authorities—effectively eliminating the possibility of conducting the “what if regulation were different” experiment. All worlds would have the same (real world) regulation."

This is a totally mess : you cannot ( nobody can )tell what a " resident " and what a " participant "is , but you're talking EULA and rights. Geez. Nobody figured yet - legally- what a VW is : so far, the companies providing them , are registered as providing MMORPGs. Correct me if/where i'm wrong : this thread is about how to trick players/makers to give you monies , based on pretended/fictional/virtual/fantasy claims about " science " and " research " ?! Why don't you simple start another "virtual real insurance company " in SL ?! Robert, there are real issues when money/rights are involved . It comes down to : you offer me a game, online ; as long as you label your game anything different from what it is...that's a scam. In a " commerce-oriented WV " - wich itself is a non-existent legal label - , all you can do is : to sell false hopes and false expectations , to the losers believing in your false claims. You will NEVER study anything at all, given the reality : any WV operator is located / bounded to specific ( economic - but not only ) laws , and the players are worlwide. You cannot study how fast a cat will eat 3 apples : cats doesn't eat apples.

[Fool]

11.

I'll sound the fool for saying this but wouldn't an income tax be nothing more than reduced coin drops on the server?

Just consider the difference between a 1x,0.7x,1x (XP,GP,drop) server and a 1x,1x,1x server. Or a 10x,7x,10x server and a 10x,10x,10x server.

If that's to case, as much a fool as I seem saying this, all there is to do is normalize shop prices as players will ultimately set their own prices in trades.

What's more, I don't think you ever could (effectively) levy a tax on player-player trading. Perhaps if it was a monetary exchange for goods but I don't very well see how you could automate taxation in a barter system.

Heck, if players didn't like the tax, they would probably just stop using the trade/shop/barter interface and throw it down on the ground.

[Andy Havens]

12.

Robert: Would it be permissible (or useful) from an economics standpoint to make the variable something from the real world, if all the activity still took place in-world? My thought is that you could make the actual cost to play the game different (which is an RL incentive), but the in-game mechanics the same.

For example... a world kinda like SL, where content (prim, texture, animation, script) creation is a main part of the draw. For Group A, you make the game free, but only allow a certain number of objects per user. For Group B, you charge for blocks of objects; $5/month gets you up to 500 prims, $10 gets you 1,000-2,000... etc. For Group C, a higher price, but you allow unlimited objects for all. For groups D-F, you do the same as A-C, but don't count prims that are created by the user; ie, you can have unlimited original prims, but only a certain number of ones you get from other players. Etc.

I'm sure that example isn't a particularly good one. But I was just thinking that, in many RL cases of economics, financial incentives aren't necessarily internal to the environment where the activity takes place. For example, I have a huge financial incentive to come to work everyday... but I spend very little of that money with my employer.

You could also have a game with a RL cash-out or incentive based on score, and then have the score tweaked to the things you're studying. So, exact same rules, everybody plays the same way, but the goal is to get to level 100; except on Server A, products have a consumption tax, and on Server B, there's an income/farming tax.

Again... not sure if that helps, but at least I'm not bugging you to tell me what kind of heroic mounts you'll have in your game, and whether or not I can play a GLBT gnome... ;-)

[Joshua_Fairfield]

13.

Robert:

There are a lot of different things here, and, since I've been thinking about EULAs and Virtual Property for a long time, your question makes me see pretty lights.

First, there are hurdles. Contracts can transfer or tweak property rights, but cannot create or destroy them. (Thought experiment: You and I contractually agree that my hand, now severed, is your property. The law simply won't agree. Conversely, you and I agree, contractually, that nobody has any property interest in houses. Again, the law doesn't agree.)

But we have worked hard to overcome those hurdles. Courts have begun to recognize property interests in internet intangibles, from domain names, to email systems (the "cybertrespass" cases). So there is hope.

Now -- if property is determined to exist in virtual property, the real question is, can we allocate the "bundle of sticks" that makes up property rights in a way that permits community service providers (hereafter "CSPs") to maintain the control they need, while giving some of the control, exclusion, and alienability that other businesses will require to be able to build businesses in virtual worlds.

I think we can. In the real world, we recognize that the libertarian view of property just doesn't work. Coordination becomes too expensive. You can't build a road if one guy "holds out" and extracts the entire value of the project. Holdouts and free-riders begin to cripple group projects.

So we have private property, but limited. The government has eminent domain. How far it can go is disputed -- can the government take your house and give it to Wal-Mart to promote gentrification? Unclear. But that is a dispute we can live with.

To answer your question succinctly: Can we write a pair of contracts that grant users a "control" and "modified" set of property rights? Sure -- as long as we realize that the contracts don't create such rights, they invoke sticks from the bundle of property rights ("exclusion," "exploitation," "control, "alienability,") that we develop through the common law method.

I think it would not be hard to grant exclusion, exploitation, control, and alienability to users while reserving the right to nerf or delete as needed.

The question that interests me -- and that we never get to talk about because we have fought over the preceding for years -- is whether the common law of property needs to talk about NEW sticks in the bundle that we would need to balance creator and user rights.

Joshua

[Joshua_Fairfield]

14.

Additionally: I love Bryan and Leandra's work. But I am very worried about this idea that the tax question ought to drive the property question. If anyone wishes to avoid having to pay taxes on her house, please send me the deed to it. I will pay the taxes.

This analysis is precisely backwards. We should decide first if we want people to invest in virtual worlds. Investment requires property rights. Then, after that, we should decide if and how much we want to tax that commerce. The tail wagging the dog is an enormous problem.

[Joshua_Fairfield]

15.

Oof -- I can't keep off of this great topic. Another thing: there are a lot of awesome posts above talking about how to use code to do this. (If we make everything "soulbound," what happens to trade, for example).

But, as another poster excellently pointed out, if you insulate ingame economics from the "real world," you get completely different incentives.

Example: If gold has no dollar value, charitable giving ("here, kid, have 100 gp") goes up.

So the system I proposed used only good, old-fashioned, red-blooded common law: because it would give real-world financial investment incentives to commercial enterprises in virtual worlds.

And the "bundle of sticks" move lets you tweak those sets of rights to see how those incentives change as you add or remove sticks.

[Bryan Camp]

16.

@Josh: Neither Leandra nor I suggest (even remotely) that tax consequence "ought" to drive the property/rights analysis. We do not say that the question about property rights should be decided by of the tax consequences of the answer. Please stop implying otherwise. We instead have investigated what tax consequences flow FROM various property/rights analyses. That is an interesting legal question and one that allows a fresh look at some fundamental concepts of the US taxing regime.

That said, it is entirely rational for people to structure their activities to minimize tax burdens, or other regulatory burdens, for that matter. That is all Robert is trying to do. He wants to find the path that will allow him to accomplish his goals, to create a virtual world where he can test various theories "in vitro" without the IRS or SEC spoiling all the fun (I don't see how one can really use virtual worlds to test "in vivo" at least in present state of technology).

There is certainly nothing wrong with considering the tax consequences of setting up a virtual world, just as there is nothing wrong with considering the SEC consequences. But those are considerations of consequences about what "is." They are not considerations of why an ideal legal system "ought" to move in one direction or another, either through common law (which I understand to be generally disliked around the world) or positive law.

-bryan

[Joshua_Fairfield]

17.

Bryan:

I apologize. I do not mean to suggest that you or Leandra desired that outcome. You've both been clear about it. I was concerned about how other people have been discussing this argument. I should have been clearer.

[Thomas Malaby]

18.

@Robert: I wish you the best of luck in this project -- I've been following your posts about it with interest. I can't shake one concern, however, and that is the apparent conviction in experimental economics that "real incentives" can only be material ones. In the context of MMOs (as seen in this discussion) this leads quite readily to an opposition between something like "fun" and "money".

But this strikes me as fundamentally flawed, on both sides. Of course (as I've written at length about elsewhere), there is little reason to think that participation in MMOs for their own sake should be seen through the normatively-charged lens of "fun" (and thus it was nice to see "engaging" here). But more to the point isn't the preference for monetary incentives more because of experimental economics' desire for quantifiable and precise values for its operations than because we really think that people's economic incentives are essentially monetary? It just seems that any economic inquiry which doesn't see the economy in the broader sense (in short, including social and cultural capital) is particularly handicapped in virtual worlds, where the vast reduction in production and distribution costs for material capital exchange seems to elevate the relative impact of other kinds of exchange (reciprocity, learning, etc), as well as enables new ways of converting them one into the other.

[greglas]

19.

/agrees with Thomas about that...

[Lavant]

20.

/nod indeed

[Andy Havens]

21.

@Thomas, who said: "In the context of MMOs (as seen in this discussion) this leads quite readily to an opposition between something like "fun" and "money"."

I don't see it as an opposition, but a contrast. Subtle difference ;-)

The problem with quantifying money is that $100 may be "worth more" to someone with an income of $20,000 a year than to someone who makes $500,000. The problem with quantifying fun is that soccer hooligans think beating the crap out of each other in RL is fun, and other people think knitting is fun. The thing that makes money easier to quantify is that regardless of whether you make $20K or $500K, a large popcorn costs $6.95. The thing that makes fun harder to quantify is that what is fun for one person may be deadly boring, stupid or even dangerous for another.

Money is also one way to quantify fun; at least in terms of things that cost money. In my life, I generally use the VGE (Video Game Equivalent) scale to determine the fun/money factor of various pursuits. A really nice meal that costs my $50-60 is about the same price as a video game. Did I enjoy the meal (and will I enjoy related memories and effects) as much as I would a new Xbox 360 title? If not, it's a negative VGE. Old paperback books for 25-cents at our local used book store have a huge, positive VGE; I can get 200 books for the price of one game. I am almost guaranteed to enjoy a greater amount of time with some of those books than with a game.

So while I think we could reasonably say that, no... dollar cost isn't the only thing important to measure... for an economist, it's a good thing. It's less fuzzy than fun, enjoyment, artistic value, etc. And because most of those things often come with a monetary price tag... well, a game that people will pay $40 to play for 40 hours vs. one they won't pay $5 to play for 100 hours is, in general going to be, I think... more fun.

[Thomas Malaby]

22.

@Greg and Lavant: Many thanks.

@Andy: Very entertaining, as always, but you miss my point. Leaving aside the "fun" question (as I tried to do above), the real issue for Robert's project as I see it is that even just the economy and its capital are not reducible to money and material exchanges, and this is even more true for virtual worlds than other domains of our lives.

[Andy Havens]

23.

@Thomas: Hmmm.... OK. In going back and re-reading your comment, I'm still not sure you weren't dinging the idea of using money as a measure of value. My point, in short, was that in many ways, especially in a very capitalist society, money is going to be shorthand for all kinds of other stuff, including some of the things you mention.

That being said... I wonder (now, after re-reading your comment), if Robert could measure the economics of sociality somehow, using some different rules. If we make a game that rewards users with some kinds of points that can be applied to attracting friends (ie, more points moves you up on a board or search for folks with your interests), could we measure the amiconomics of various rules and regs?

Do "Thing A," and people are more likely to keep playing in order to make friends. Do "Thing B," and they get frustrated at the social cost.

[Thomas Malaby]

24.

@Andy: Well, I'm sure folks will try to find a way to do so, but I personally think it's impossible. Just think about social capital for a moment. As I and a number of other scholars conceive of it, it is the moral ties of reciprocity that connect those who feel they can rely on each other (that is, it's not simply a "network" -- the social network is an *effect* of reciprocal ties, it's not the ties themselves). Of course, in any particular relationship there may be a sense of outstanding obligation on one side or the other, too, and that means that the situation is quite complicated.

But the key point is that these "accounts" are never settled. I don't know what I may have to call upon my trusted intimates to provide tomorrow -- maybe a serious health issue, maybe a new job, maybe advice on an anniversary gift for my spouse. In any event, those relationships are always in the process of becoming, through such exchanges, on the fly. I don't know that I will feel comfortable asking colleague so-and-so to cover for me when my kid is sick until the moment happens, and I choose to call (maybe it seems right, or maybe I'm that desperate) and my colleague responds, one way or the other. In short, we have little reason to expect that anyone involved in this kind of moral reciprocity can put some kind of precise measure on such ties and their potential amidst an uncertain future, at least in my opinion.

[Andy Havens]

25.

@Thomas: I agree with you completely. By the same token, though, I can say that I may get much more *value* out of any dollar-purchase than someone else does. For someone with diabetes, a glass of orange juice (though it costs the same in $) may be worth much more than it is to me. Reciprocally, he may also (at times) be willing to pay much more for one than am I. We can't always place a universal value on anything, but money stands in as a measure of universal cost.

The trick Robert is trying to turn is to find out what actions will, generally, result in more $ for more people.

My thought is that although any social network (computer assisted or otherwise) is, as you say, an effect of social capital, in many cases the things that go on there will; a) enable new social ties, b) strengthen existing ones, c) have associated costs in time, money, convenience, status, etc.

So while we can never quantify what being "Andy's good friend" means in universal value, we can (might) say that in the case of Platform X, Andy's good friends stay in touch X times every week, post X comments to his spaces, reply in X time to his messages, etc. etc. On Platform Y, if those relationship-forward events happen fewer times, or more slowly, or don't carry as much of a social "load" (however you'd measure that), than we can say that Platform X is "better" at enabling the stimulation of my social network, even though (again, agreeing with you) the social capital is housed entirely offline.

I think of it like the difference between an auction application and a bank. A good auction ap (eBay) enables all kinds of interesting transactions. I can certainly measure the success and failure of many of them. But I don't keep my final profits in eBay; I keep them in a bank.

Similarly, I might make new friends on Facebook and find, over time, that it is better for that purpose than MySpace. The units of "stuff" that I do on both systems should be measurable, even though my friendships made there are kept in my heart.

[Ola Fosheim Grøstad]

26.

I can legally have participants pay an entrance fee to play poker in my laboratory, as long as my goal is education or research and I am not making any profit.

Maybe you can, but some would say it is unethical to charge people anything in order to participate in research. If you plan on recruiting participants online the "laboratory" status probably doesn't apply anyway, as it would be a public lottery? Besides you would, for ethical reasons, have to weed out potential "gambling addicts" from the study. Which is hard to do, on the Internet.

Are you going to accept non-US players? In that case your TOS should take their local laws into account, again for ethical reasons.

[teen]

27.

http://supergirlssex.biz/map.html
>

[Amarilla]

28.

"So while we can never quantify what being "Andy's good friend" means in universal value, we can (might) say that in the case of Platform X, Andy's good friends stay in touch X .."

You can never quantify Andy's reasons to act more or less in a manner or annother, on a platform or another : maybe Andy needs a pee right that momment. Btw, have you spoke to Andy's wife to alowe him play that much time on that many " Plarforms " ?

"...as my goal is education or research and I am not making any profit."

Nobody stops you to tell me inside infos , then i send you some cash . I love to play unregulated online Poker.

[Amarilla]

29.

"So, is it possible to craft terms of service that are strong enough to allow for clear economic incentives for participants (necessary for valid research), while simultaneously being weak enough to keep real-world regulators at bay? "

Yes : been there, done that : it's called LL/MindArk 's EULAs : the terms are strong enough to mislead the players into assumming " clear " economic incentives while simultaneously there is a small line saying : " we owe everything, you have no rights." Afterall, you need something to make players give their money to you , and the same time to deny them any rights or recourse . Put the line : " we reserve the right to cancell your account for no reason at any momment ; we reserve the right to change this EULA at our whim without prior notice " . Now you have your EULA ;now you are free to craft a godzilion of ToS, strong enough to induce the ILLUSION of incentives.All you need is to manipulate player's behavior , based on her/his false assumptions and presumptions.

"Does it make a difference that the game would have an explicit educational or research objective?"

Yes : you can take a salary from the University , and subventions from the feds , pretending to " research " ,while you're running a unregulated / rrigged Casino and engage into RMT .

[Andy Havens]

30.

Amarilla: "You can never quantify Andy's reasons to act more or less in a manner or another."

Yes, you can. It's called market research. We've been doing it for more than 100 years.

1. Demographic research. If I give a statistically valid sample of consumers a chance to by a product with Feature X, and another, similar sample the same product, but with Feature Y, and twice as many of them choose X... I know that they like that feature better.

2. Psychographic research: Same as above, but divide folks up based on personal preferences.

3. Direct polling. I can just *ask* people, "Do you tend to use blogs with open comments more than those without?"

Every single person believes that every single action they take is based on their own, personal thoughts and actions. That's true. But every single person's thoughts and actions are also influenced by a wide variety of inputs, including advertising.

So whether or not I take a pee, or my wife dislikes the amount of time I spend online, my use of a service can certainly by quantified; especially over time, and especially in aggregate with other users.

[Thomas Malaby]

31.

@Andy: I fully agree that you can do a *lot* with numbers when trying to assess human behavior. No problems on my end with that. I was just suggesting that we can't get at everything we may want to that way, and that, in particular, trying to understand the economy in the big sense requires methods beyond the quantitative. Direct polling, for example, gives us an account of how people think they act, or what they think their preferences are, but in practice they may act so differently as to make their answers, even in aggregate, nearly worthless. But combine those reported preferences/descriptions with close-to-the-ground qualitative research, and while you may trade off generalizability, you'll gain an understanding of the ongoing processes that define the situation at hand. That understanding is nuanced enough to be used as the basis for making reliable claims (for academics) or for taking action (for industry). But I'm guessing we don't disagree.

[Andy Havens]

32.

@Thomas: You guess correctly, my friend. ;-)

[Amarilla]

33.

"1. Demographic research. If I give a statistically valid sample of consumers a chance to..."

you don't have such a valid sample in a VW's playerbase,for many reasons . And Mr.Bloomfield was asking exactely about VWs.

"2. Psychographic research: Same as above, but divide folks up based on personal preferences."

Nope : same as above : as long as the reasoning behind player's decisions is based on false assumptions ( ownership ? investment ? ) - [or , as Mr.Bloomfield nicely calls them : "...strong enough to induce the impression of clear incentives, but legally weak enough to cover our ass "]....how are such results gathered from a contaminated sample , usefull ? We were talking about the benefits of research, right ? Can you tell anything about my - let say - colours preferences, as long as you force me to look thru already colored lens ?

"3. Direct polling. I can just *ask* people, "Do you tend to use blogs with open comments more than those without?" "

MindArk EULA : " ...if you badmouth MindArk/Entropia , in forums, blogs, private e-mails, all and any media / medium of communication , we gonna ban you , no matter if what you tell is true or false ."

Well, in their EULA , the words are a bit more " lawyerish ".

So, again , what was the science and the research and the benefits ?

[Amarilla]

34.

"So whether or not I take a pee, or my wife dislikes the amount of time I spend online, my use of a service can certainly by quantified; especially over time, and especially in aggregate with other users."

So what ?! I quantify the time you spend in SL compared to the time you spend in Entropia , and i have no ideea of WHY you do so.I have no ideea what are the factors deciding the amount of time you invest in those two games.I have no ideea how much a $USD worth to you . I have no ideea if you maybe just lost your job and now you have plenty of time to play Entropia , hooked by the hope to become rich playing a MMORPG. You call this economic research ?

[Clauserwitz]

35.

Amarilla, take a chill pill or ten.

The Entropia company has stated many times that the user own the value of the items they have in their possession. The actual item as such is however not the user's. They have also stated that they have real money available to back all virtual values, as the entropia dollar is pegged to the US dollar. That is very good to know and a secure policy for the users, as they cannot print new virtual money without having the real deal, or put a defecit in the economy like in SL.

Has anyone been banned for badmouthing Mindark? If not, than why implying they are like the Gestapo?

[Andy Havens]

36.

Amarilla... 2 more things...

1. Robert isn't talking about performing experiments in current VWs. He's talking about setting up future situations in which you would determine ahead of time what you're trying to study, thereby writing the research requirements into the code, rules and EULA. It's the difference between asking 2,000 people what they ate for lunch yesterday vs. providing 2,000 people lunch today with 2 choices in a particular venue. In the former, you can get some qualitative data w/ surveys, etc. In the latter, you can *definitely* get an idea of which of those 2 choices is preferred. I'm not sure why you're fighting this idea, really.

2. Even with established venues, you can point to changes in the environments and then changes in user behavior and make some assertions if the stats work. In the case of SL, for example, some work could be done on user stats after the recent cessation of gambling. If certain things trend up/down at a much sharper rate than they did before, odds are it's related to a change in conditions. Not 400,000 people all having to get up and take a leak at the same time.

You keep saying that we never have any idea why an individual person does something. That's just... not... true. While most people believe that their choices are highly individualistic, in many cases, many of our choices are very similar to others'. We just don't see the other hundred thousand or million users who are all deciding, "Jeez... the new UI for IM in here is so jammy that I'm just not gonna put the time into this space for awhile."

Not sure why this concept is troubling you so much.

[Amarilla]

37.

@ Andy ,
i understand Robert's ideea and noble goals , really . I don't " fight " the ideea; it's a very good initiative to post it here , for debate ; even from ( my ) weak arguments , i'm sure he can gather valuable informations; afterall, he's a specialist in human behavior. Really, no irony.

What i'd like to hear from Mr.Bloomfield -- or anyone else -- is : ofcourse the human behavior have its " patterns ", i could even mention the neurological circuits and the genetics. But : researching the behavior of a human group " in vivo " is one thing , researching the same " in vitro " is also one thing ....but researching the behavior of quasi anonymous entities in a virtual and wide open environment , it looks to me simply....virtual . Now : explain to me please : what is there valuable, as a potential result, for the real life , as long as you can study alt's behavior but not player's ? Many of you here at TN are insisting that player's habits reflects into its alt " performance "; i agree , it does ; but my point is : what a player " reveal " / involve in a VW , does not tell us enoug, about how that player will act in its real life . As you very well know, in a --let say -- economic - oriented VW we face the lack of very significant ( and definitory ) aspects of real life economy ; " scarcity " , " death " and so on.
And also there is the issue of " immersiveness ".The player is not enough involved, immersed , in order for us to can draw conclusions about its behavior . If we " push " too far the addictive/immersive means ( including in EULAs ), we get in trouble with the real life regulators.

There is no way for any concept to trouble me ; the way i post/express a point of view / opinion , at TN, tells nothing about myself/my behavior : but only about my behavior at TN. Like : i don't bother to answer mr.Clauserwitz , he's free to read that EULA and MindArk's official accounting reports , where are NOT mentioned any " backups " for withdrawals .

[Thomas Malaby]

38.

But Amarilla, there is no true or natural or "real" context in which we act that shows us as we "really" are. It is impossible to separate people from how a given situation defines them. That is why, while I agree with the skepticism about capturing some kind of "genuine" behavior in virtual worlds, it is just as impossible to do that anywhere else (such as in the realm of the "real").

So the distinction you're trying to draw between virtual behavior and real behavior doesn't wash -- every domain in which we act (household, job, legal, market, etc) shapes our behavior in inescapable ways, just like the domains of virtual worlds. And what is more, in each of these domains the effects of our actions accumulate, which means things come to be at stake (so we can't say that the virtual is somehow consequence-free).

So, what Robert (and many others, including myself) are trying to do in our various ways is to get at how people's actions are understandable relative to whatever contexts interest us and whatever questions interest us. The answers we find are always a simplification to some degree, but the best work does allow us to make reliable claims about people wherever they may be spending time, including in virtual worlds.

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[Amarilla]

40.

Thank you, now i understand . Amazing thing, the science.You can draw real conclusions about real peoples' behavior.....real peoples spending real money , in an environment in wich they have strong incentives ( real or not, that's another story ; for research purpose , important are player's motivations / reasonings ).....

Real peoples , real money, real behavior, real influence , real economic results....

Why do you need to keep the real regulators out, then ?!

[Anca]

41.

I've been following this discussion with interest for the past few days. I'll stick just to the topic of the study of wealth creation under different regulatory environments, rather than the more compelling, but more vague measurement of happiness.

Supposing that you plan on either paying your players by providing an initial starting capital with real dollar value, or asking them to invest their own cash, you could set up the world in such a way that players who "cash out" pay an income tax or gambling winnings tax, but only when they exit the game permanently. Maybe the game can be closed -ended, and the top few players or teams get a larger payout at the end, with average players getting less, and so on.

I use the word "game" here because it seems like it's important for participants to have a goal (amassing wealth), rather than just hanging out in a fun environment. Do you see the player as competing directly with each other here (PvP) rather than with the world machine (PvE)?

How much interaction with the real world do you expect people can have without spoiling the study?
It seems to me that cheating, intimidation and outright crime outside the VW might interfere with the study more than the feds would, especially if there is a real-world $ payoff.

[Amarilla]

42.

"I am not surprised that the first comment is dedicated to wondering whether my goal makes sense in the first place."

I am not surprised that your only threads at TN are about how to setup a new Ginko in SL or a new Entropia. In your previous thred , you were sugesting us to improve the trust and the security in SL by setting up a ...." Virtual Real Fictional Insurance Company ". Or whatever you've called it.

[Amarilla]

43.

Clauserwitz says:

"Amarilla, take a chill pill or ten.

The Entropia company has stated many times that the user own the value of the items they have in their possession. "

I was talking about MindArk. I don't know who is " Entropia company. "

Say " thanks ", i give you the opportunity to read EULA's paragraph :

"7. Ownership
The System, including, but not limited to, computer code, text, graphics, audio files, logos, button icons, images, characters, ITEMS, concepts, data compilation and software, is the
PROPERTY of MindArk and protected by Swedish and international copyright laws.

MindArk, MindArk PE, Project Entropia, Entropia Universe and other marks indicated on the Entropia Universe’s website are registered trademarks of MindArk in Sweden. Any Entropia Universe design and any other MindArk graphics, logos or button icons are trademarks of MindArk.

Virtual ITEMS will often have names similar or identical to corresponding physical categories such as "people," "real estate," "possessions," and the names of specific items in those categories such as "house," "rifle," "tools," "armor," etc. Despite the similar names, all virtual items are part of the System and MindArk retains all rights, title, and interest in all parts including, but not limited to Avatars and Virtual Items; these retained rights include, without limitation, patent, copyright, trademark, trade secret and other proprietary rights throughout the world.

As part of your interactions with the System, you may acquire, create, design, or modify Virtual Items, but you agree that you will not gain any ownership interest whatsoever in any Virtual Item, and you hereby assign to MindArk all of your rights, title and interest in any such Virtual Item.

You hereby grant MindArk the worldwide, perpetual, irrevocable, royalty-free, right to exercise all intellectual property rights for any content you may upload to the Entropia universe, including, but not limited to, user-to-user communications. "

So, mr." ambassador " ( should i call you Jon NEVERDIE Jacobs ? ), do your homework before trying your " luck " at TN.

[andyhavens]

44.

Ah, Amarilla. Now we can agree on something. And with Thomas.

But I will point out that most marketing folks (like me) and many economists won't care that specific results measure users' "true" purpose, feelings, etc. Only that they predict behavior in certain ways, at certain times.

For example, if I were trying to run a restaurant, I could not, in any way, study how good my food tasted by asking people to play a VW about my place. If, on the other hand, I ran a VW that had in-game music, and I could measure which music people tended to choose more often, I could use that information to better program my musical choices for the restaurant.

Now, of course, the music people want to hear while playing a VW may be 180-degrees different than what they want to hear in a restaurant. That's a risk that this kind of measurement takes, and one you try to mitigate in as many ways as possible.

I don't think you could ever design a VW, for example, that would adequately measure ways to keep people from doing things that in RL are truly evil. When the penalty for murder is, at most, cessation of play as opposed to cessation of life... well, any conclusions about the preventative affects of various stimuli on murder rates is going to be pretty goofy.

On the other hand, purchasing behavior is much less complicated than murder. It has been studied and practiced for more than 100 years by thousands of companies and millions of individuals. We know that a brand preference, for example, can command a price premium. What we often don't know is *how much.* We often proceed by trial and error in particular cases. In a VW, I think, we could probably set up a situation where virtual products are branded with RL brands, and then proceed to test how much more players are willing to pay for their preferred, branded virtual stuff. If the cost (even in game dough) gets too high, they will probably go with a generic or a competitor brand. But how much? And, even without absolute data, a test like that could give you good comparative data; people in the game were willing to pay a 15% premium for Brand A over a generic, but only a 5% premium for Brand B. Do that test, go out and do some branding activities, and then do the test again. Compare. Learn.

No, VW's won't be perfect testing grounds. But then, as Thomas points out, neither are labs. People always lie to testers ;-) Maybe in VWs they'll lie... but in more useful ways.

[Amarilla]

45.

@andy : very instructive , thank you . Now,labeling your on-line-laboratory environment as a VW , that doesn't change the fact that you're dealing with my cash, my behavior, my education, my behavior,my sexuality,my privacy, my established rights, and all of these are acting in a bi-lateral way ; enlight me again please : why do you want/neeed to keep the regulators out ?

[Thomas Malaby]

46.

I don't think Andy or I has ever said that "the regulators" should be kept out. On the contrary, at least in my case, if you've seen a number of my posts.

[Amarilla]

47.

Ofcourse you didn't. Only Mr.Bloomfield has asked it in his starter post ,so it is implied .

"...So here is the Goldilocks problem: ..."
"..So, is it possible to..."
".... keep real-world regulators at bay? "

This is the exact and the only subject of this thread, as Mr.Bloomfield drafted it.

Instead of arguing what would be the most successful method of achieving his goal , and instead of telling / explaining " yes it is possible " or " no , it is not possible ", answer me this simple question : why would a VW owner/ maker /operator ,want to keep the regulators out ?

Mr.Bloomfiels said :
"The EULA can't protect user's rights too much."
His solution toward user's rights is not to improve the EULA or the protection , but to find ways of how to keep the regulators out, and the Gambling, Porn and Ponzi IN.

Mr.Bloomfield, why do you need to keep the regulators out, while you're doing business with our real money on a site on internet ?

[Maek Brenneman]

48.

My is fabigously wonderful very time wonderful.

[Robert Bloomfield]

49.

My motivation is very simple, Amarilla: I can't study the effect of different security regulations if the SEC's regulations always apply. So my hope is to be able to create a virtual world that has a sufficient "real" stock market that we can generalize from its behavior to real world markets, while still not having it automatically fall under real-world jurisdictions.

Note that I am not arguing in this post that existing worlds designed as business platforms (like Second Life) should necessarily be free of real-world regs. Instead, I am talking about worlds designed specifically for research and education.

[Amarilla]

50.

sure, is the same simple as talking " family values " in Idaho....not that is anything wrong with that, anyway, is it ?

[Amarilla]

51.

You know, Robert, you remaind me of how powerfull the words can be , from a story i've heard ( indulge with me ) :

" ...there is a huge conceptual difference between the " A+ " in the USA and the " 10 " in Europe and the " 5 " in Russia - in schools i mean; an A+ is exctely what it looks like,compared to a D-...a 10 compared to - let say , a 3 , or even a 1....- now let look at the 5....you could say : " bravo ! take a 5 ! " , or " good enough , take a 3 ! " , or " not so good , take a 2 ! " , or, in the worst case : " very bad, take a 1 ! " . Imagine what would be in the USA , to say : " take a 1 from five, the middle one ".

The morale being : one could pretend anything about everything when about " labels " meant to cover the facts : you could say SL was designed as a business platform ; Gitmo was designed specifically for research and education , too.

We already know how the humans behave in an environment where are no regulations in place or the regulations are weak , thank you very much . Both the SL and Gitmo are good examples.

[Thomas Malaby]

52.

Amarilla, it strikes me that you're not really debating with Robert at all. You've clearly got an axe to grind about unregulated virtual worlds, and it's a position with which I have some sympathy, but it's hardly fair to Robert to try to turn his thread into a debate about an issue that is at a fair remove from what he wants to propose and think about. Now that I think about it, it seems to me that you try to turn nearly every thread on TN in which you participate into that discussion. Maybe we could have your thoughts on that discussion in threads where it's on topic, and get other opinions from you in other threads?

[Amarilla]

53.

"You've clearly got an axe to grind about unregulated virtual worlds..."

More clearly : about unregulated on-line environments where i'm invited to invest money, to submitt my ID and Bank Accout infos , to gamble , to run Ponzi schemes and to mimmick child-porn. The fact that Mr.Bloomfield would - or not - make profit from his VW , it's debatable and irrelevant same time : debatable , because he can engage in RMT in his VW using " covered " alts , he also can sell inside infos for real cash. Irrelevant, because no matter what his profit is , what we the players are doing there is gambling.

"Now that I think about it, it seems to me that you try to turn nearly every thread on TN in which you participate into that discussion. "

Not at all , but only in the threads where the subject is :

"Goldilocks and the Three EULAs"
" regulations "
"regulators "
" how to circumvent players' rights , while making the players believe they have rights "
" the player have to send some cash to Cornell University , so that Mr.Bloomfield can do research ".

Thomas, i have no " axe " against Vegas, nor agaist Stock Exchanges , nor against VWs. I have an " axe " against dishonesty , even when - or , more when - it have a " legalese " cover-up :

" The lawyers told me that i could do it , if i can manage to build a special EULA ".

Thomas, do you have any ideea of why they use a sort of harmless paint-projectiles when playing war-games like Paintball ?

Robert said :
"...Instead, I am talking about worlds designed specifically for research and education."

To put it simple : yes you can and may build a virtual environment , a " lab " where to do research . When you intend to( or the effect is )educate , especially on internet , worldwide , you may not set a special set of rules above or against the established laws and rules. Especially when you're dealing with players' money , online.

[Amarilla]

54.

Sorry , i forgot to mention :

Robert, LL already did that mistake , and i'm sure their lawyers told them that they can run a VW where players can gamble and all. I would sugest you to wait until the lawmakers takes a decision about " doing business with real money in a Virtual World ".

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