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Valve hires economist to assist with linking its virtual economies

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"It all began with a strange email" from Gabe Newell Yanis Varoufakis

Valve Economics
Valve Economics

Valve has brought on academic economist Yanis Varoufakis as an economist-in-residence. He will work for the company as a consultant and analyst.

Valve has brought on academic economist Yanis Varoufakis as an economist-in-residence, announced Varoufakis on Valve Economics, his new blog at the company.

Varoufakis, a Greek professor who grew to international prominence as an analyst and commentator during the ongoing European financial crisis, will work for Valve in a variety of capacities. His primary role is consultant on Valve's attempts to scale up and link its virtual economies, a position for which Valve co-founder Gabe Newell first reached out to him in October 2011 with what the economist called a "strange email."

The principal allure for Varoufakis is the ability to use Valve as an empirical test bed for the kind of economic analysis that is impossible in the real world. He called it an "economist's paradise," explaining that Valve's economies will allow him to experiment with "the economy's underlying values, rules and settings," and then observe "how the community responds, how relative prices change, [and] the new behavioural patterns that evolve."

While he admitted, "horror of horrors," that he does not play video games, he asserted that studying Valve's economy will ultimately allow the company to better serve its customers. "My academic curiosity blended nicely into Valve's burning desire to serve its gaming community better, through the development of services that are in tune with the community's needs as gamers," he explained. In addition, he pointed out that Valve sees its fans not just as customers, but as "traders, developers, participants in something much bigger than just video games."

Varoufakis also plans to study Valve's famed internal management structure and discuss it in his blog, which he will update weekly. With his real-world economic expertise combined with the brilliant people at Valve, this could be an eye-opening project.