Virtual Worlds Test Social and Economic Theories

April 18, 2007. One of the problems with social and economic theories is that they are hard to test in real life. Simulations are equally difficult because it is hard to mimic the various behaviors of individuals. But, I have an idea.

What if social ideas were tested on virtual worlds. Imagine if World of Warcraft had a progressive tax system. What would the effect of players be? Or, have a setting where one country has a progressive tax and another a flat tax. Put on both countries the need to generate revenues, maybe. You require that player's declare a country on this virtual world, and they are automatically taxed accordingly. Make both countries effectively the same in resources. It does not matter if the income is earned in flat-taxland (Flaxia), the progressive has to pay his progressive tax (Progressia).

The effect would be to see how players react. Do the big earners move to Flaxia? Does Progressia generate more revenue? What is the average per-person tax? This idea can extend further. What would the effects of a tax rate increase/decrease be?

Granted, it would be hard to simulate a tax system. The first logical consequence is to find out what happens when the tax code is simplified.