It began with an e-mail. “I have been following your blog for a while,” wrote Gabe Newell, president of the videogame developer Valve, in October 2013. “Here at my company we were discussing an issue of linking economies in two virtual environments (creating a shared currency), and wrestling with some of the thornier problems of balance of payments, when it occurred to me ‘this is Germany and Greece’…. Rather than continuing to run an emulator of you in my head, I thought I’d check to see if we couldn’t get the real you interested in what we are doing.”
The recipient of that e-mail was an economics professor. His name was Yanis Varoufakis, and he had become well-known for predicting the terrible problems that now afflicted his native Greece in the wake of the 2008 financial crash. As he wrote on his blog, “every 70 years or so…a major economic collapse turns us economists from creatures to be avoided at all costs (especially on TV or around the dinner table) into minor celebrities whose words are eagerly followed by a despairing public”.
Varoufakis’s words are now followed eagerly worldwide, because the January elections that swept the populist left-wing party Syriza to power in Greece also made him the country’s finance minister. The challenge facing him is huge—Greece experienced six straight years of recession after the crash and needed 240 billion euros’ worth of bailouts from its neighbours, contingent on harsh austerity measures. But he has one advantage over any other politician in Europe: he has had the chance to study a huge, functioning economy in incredible detail already, through an online multiplayer videogame.
Team Fortress 2 is a game developed by Valve Corporation, an American video game company. After that e-mail from Gabe Newell, Varoufakis agreed to become Valve’s economist in residence. His appointment provoked surprise: What was a 50-something academic doing watching people shoot each other with rocket launchers? But if you looked a little closer, the appointment made perfect sense. Varoufakis’s specialty as an economist is game theory, the study of strategy and decision-making. In Team Fortress and other games available through the Steam portal, 50 million players were making decisions every day. And even better, unlike lab subjects, they cared about the outcomes. They’d spent money on the game and they had the opportunity to spend even more money on in-game extras, like better guns or fancy hats.
What’s more, the full data set was available immediately, accurately measured and in machine-readable form, and you could even change the underlying conditions of the scenario to see how players responded. On his blog, Varoufakis described videogames as an “economist’s paradise.”
He wasn’t the first to come to this conclusion, Earlier, the Icelandic company CCP, which makes the massive multiplayer online game EVE, had appointed Eyjólfur Guðmundsson as their in-house data cruncher. (“I would like to thank [him] for making my name sound almost easy-going,” joked Varoufakis.) Since then, other academics have become involved in the field, including a doctoral student at Princeton who studies in-game spaceship insurance.