Case Study: The Economics of Arden
A synthetic world is a computer-generated Earth-like environment that is accessible online to hundreds or thousands of people on a persistent basis. Due to the genuine human interactions that are cultivated in these environments, this technology may stand to offer much as a social science research tool. In this paper we describe a synthetic world, Arden, which has been designed and constructed for use in macroeconomic experiments. We detail the basis of the Arden economy, the resources and production technologies involved, the game structures that will entice players to make use of them, and the monetary and fiscal policy tools available for regulating the virtual market. The paper concludes with a description of example experiments that could be conducted, as well as a review of key principles and practical considerations to keep in mind when employing this new research tool.