Virtual world order: the economics and organizations of virtual pirates

This paper investigates how order may emerge in anarchy using a novel empirical approach. It analyzes the predatory and productive interactions of 400,000 users of a virtual world. Virtual worlds are computer-created environments that visually mimic physical spaces, where people interact with each other and with virtual objects in manifold ways. Notably, the paper examines the behavior of users acting as virtual pirates. The paper finds that even in a largely anonymous and anarchic virtual world private rules of order mitigate the most destructive forms of conflict. This is true even though the virtual pirates are found to be conflict-loving rather than conflict-averse. Although the costs of conflict are dramatically reduced in virtual worlds, private rules that limit violence spontaneously emerge. An important part of the paper’s contribution is methodological. The analysis of the problem of order in anarchy serves to exemplify the power and usefulness of the new approach.