Truck, barter and exchange versus the endowment effect: Virtual field experiments in an online game environment

We examine the feasibility of using a massively multiplayer online role-playing game (MMORPG) to test economic theories. As a test vehicle we use the well-known endowment effect. Even though our goods are entirely virtual, our results confirm earlier results that individuals with more trading experience are less likely to exhibit status quo behaviour in trade. However, we also find evidence that highly experienced individuals are more likely to swap the item rather than keep it – i.e. there appears to be a propensity to ‘truck, barter and exchange’. A further experiment suggests that this feature is robust and is unlikely to be due to subject misperception or experimenter demand effects. However we are unable to eliminate selection effects as the source of our correlation between experience and propensity to trade. We conclude that virtual economies may be useful venues for field experiments.http://www.grips.ac.jp/list/jp/facultyinfo/munro_alistair