Valve hires economist Yanis Varoufakis

Valve hires economist Yanis Varoufakis
Seth Tipps

By Seth Tipps

June 15th 2012 at 11:05PM

New hire to investigate for game studio's virtual economies

Valve has hired economics professor Yanis Varufakis, who will be helping the games company navigate the labyrinth of digital economies.

Varufakis, a native of Athens, has become well known for mixing labyrinths and economics as an influential commenter on the Euro Zone Crisis, and author of "The Globabl Minotaur".

It was this work which drew the attention of Valve president Gabe Newell, who had been following Varufakis' blog.

"I’m the president of a videogame company,” began Newell's letter to Varufakis.

"We are running into a bunch of problems as we scale up our virtual economies, and as we link economies together. Would you be interested in consulting with us?”

Varufakis, who had not played a video game since space invaders in the '80s, almost deleted the e-mail before reading the second line, but wrote "something in my head prevented me from pressing the DEL key".

“I have been following your blog for a while," continued Newell.

"Here at my company we were discussing an issue of linking economies in two virtual environments (creating a shared currency), and wrestling with some of the thornier problems of balance of payments, when it occurred to me 'this is Germany and Greece', a thought that wouldn’t have occurred to me without having followed your blog. Rather than continuing to run an emulator of you in my head, I thought I’d check to see if we couldn’t get the real you interested in what we are doing.”

Varoufakis still didn't recognize the signature, but the idea of a game company that was aware they were managing virtual economies which needed study and regulation was enough to get his interest.

He stopped to visit Valve's office in the middle of a lecture tour a few weeks later, and was thrilled with what he saw.

"I realised that this bunch of people were not just weird but also wonderful and, to boot, that what they were describing, the digital community they had facilitated into existence, was an economist’s dream-come-true," he wrote in a Valve blog post.

"Think of it: An economy where every action leaves a digital trail, every transaction is recorded; indeed, an economy where we do not need statistics since we have all the data!"

This was a dream come true for Varoufakis, who describes contemporary economics as "computerized astrology" that without real data is destined to rely on statistical models that can only differentiate between contradictories.

But with the hard data recorded by Valve, economists have a unique ability to make truely scientific observations.

Varoufakis couldn't miss the opportunity, and within hours an agreement was reached that named him "in-house economist", allowing him access to data that can sharpen his own thinking as he strives to help Valve hone their customer experience.

Valve is not the first company to employ an economist.

CCP hired Eyjólfur Guðmundsson to study the economy of their virtual world EVE Online several years ago, and now employs a full team of economic experts to make regular reports on the game.

Varoufakis will also make weekly reports on the Valve blog.