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Theory of the Avatar

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  • Edward Castronova

Abstract

The internet has given birth to an expanding number of shared virtual reality spaces, with a collective population well into the millions. These virtual worlds exhibit most of the traits we associate with the Earth world: economic transactions, interpersonal relationships, organic political institutions, and so on. A human being experiences these worlds through an avatar, which is the representation of the self in a given physical medium. Most worlds allow an agent to choose what kind of avatar she or he will inhabit, allowing a person with any kind of Earth body to inhabit a completely different body in the virtual world. The emergence of avatar-mediated living raises both positive and normative questions. This paper explores several choice models involving avatars. Analysis of these models suggests that the emergence of avatar-mediated life may increase aggregate human well-being, while decreasing its cross-sectional variance. These efficiency and equity effects are contingent on the maintenance and protection of certain rights, however, including the right of agents to free movement, unbiased information, and political participation.

Suggested Citation

  • Edward Castronova, 2003. "Theory of the Avatar," CESifo Working Paper Series 863, CESifo.
    • Handle: RePEc:ces:ceswps:_863
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    File URL: https://www.cesifo.org/DocDL/cesifo_wp863.pdf
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    References listed on IDEAS

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    5. Eshel, Ilan & Samuelson, Larry & Shaked, Avner, 1998. "Altruists, Egoists, and Hooligans in a Local Interaction Model," American Economic Review, American Economic Association, vol. 88(1), pages 157-179, March.
    6. Edward Castronova, "undated". "Virtual Worlds: A First-Hand Account of Market and Society on the Cyberian Frontier," Gruter Institute Working Papers on Law, Economics, and Evolutionary Biology 2-1-1008, Berkeley Electronic Press.
    7. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    8. Edward Castronova, 2001. "Virtual Worlds: A First-Hand Account of Market and Society on the Cyberian Frontier," CESifo Working Paper Series 618, CESifo.
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    Cited by:

    1. Jean-Pierre Dumazert, 2012. "Chef de guilde et entrepreneur-leader : des points de liaison pour quelle appréciation du risque ?," Post-Print hal-01878309, HAL.
    2. Olivier Hueber, 2011. "Innovation in virtual social networks: the widespread of new electronic currencies and the emergence of a new category of entrepreneurs," International Journal of Transitions and Innovation Systems, Inderscience Enterprises Ltd, vol. 1(2), pages 163-174.
    3. Olivier Hueber, 2008. "Online communities of payments and consumer behaviour," Post-Print hal-00440942, HAL.

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    More about this item

    Keywords

    information and internet services; computer software; equity; justice; inequality; synthetic worlds;
    All these keywords.

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