"An economy bigger than India or China"

[Daniel Davies]

 After all the recent science fiction nerderie, it is with a certain sense
of trepidation that I provide the link below, to an economics paper by
someone with far too much spare time:

http://papers.ssrn.com/paper.taf?ABSTRACT_ID=294828

Virtual Worlds: A First-Hand Account of Market and Society on the Cyberian
Frontier

 
EDWARD CASTRONOVA
California State University at Fullerton ; CESifo (Center for Economic
Studies and Ifo Institute for Economic Research)
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December 2001 

CESifo Working Paper Series No. 618  

Abstract: 
In March 1999, a small number of Californians discovered a new world called
"Norrath", populated by an exotic but industrious people. About 12,000
people call this place their permanent home, although some 60,000 are
present there at any given time. The nominal hourly wage is about USD 3.42
per hour, and the labors of the people produce a GNP per capita somewhere
between that of Russia and Bulgaria. A unit of Norrath's currency is traded
on exchange markets at USD 0.0107, higher than the Yen and the Lira. The
economy is characterized by extreme inequality, yet life there is quite
attractive to many. The population is growing rapidly, swollen each each
day by hundreds of emigres from various places around the globe, but
especially the United States. Perhaps the most interesting thing about the
new world is its location. Norrath is a virtual world that exists entirely
on 40 computers in San Diego. Unlike many internet ventures, virtual worlds
are making money -- with annual revenues expected to top USD 1.5 billion by
2004 -- and if network effects are as powerful here as they have been with
other internet innovations, virtual worlds may soon become the primary
venue for all online activity.  


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