The research program began with the financial assistance of IFREE and the Mercatus Center at GMU and the purchase of Terraeconomicus ‐‐ a virtual region inside the computer network of Second Life.  In 2006, Steve Saletta, a Ph.D. student at CSN, programmed the first demonstration experiment, a monopoly pricing experiment, on Terraeconomicus, and in the Fall of 2007, we began running virtual lab meetings on Terraeconomicus. It was then that we began designing and building an undergraduate course to be taught entirely on Terraeconomicus.  The course, called Economics of the
Metaverse was first taught in the Spring of 2009, and undergoing continuous improvement has been taught a total of three times.

In 2008, Ph.D. students Peter Twieg and Jaap Weel (now at Facebook) joined the group, and we began to design and build our first virtual world experiments. This has resulted in the building of two research islands. On Hurricane Island we have been studying Elinor Ostrom’s principles for the effective management of a commons. On Trade Island we have implemented the long distance trading experiment designed by Bart Wilson, Erik O. Kimbrough and Vernon Smith (AER 2008) to further study the effect of property rights on exchange.

Many lessons are being learned from these early experiments including the need to develop expertise in natural language processing. With this in mind we invited Ph.D. student Stephan Kunath to join the group and add his expertise in natural language processing. We are now using Amazon Mechanical Turk to enlist human intelligence in classifying the conversations between subjects before, during, and after their decision making in Second Life.

A second lesson was the need to develop a more robust virtual world platform for experimentation.  In 2010 we began development of an OpenSim (an open source virtual world package) server on ReactionGrid (a virtual world hosting company) that gives us full control over the server including the ability to remote desktop into the server and save and restore virtual islands with a single OpenSim command. This together with the ability to modify the code in open source client viewers, such as the Hippo virtual world viewer, will eventually allow us to recruit subjects on Mechanical Turk, monitor them during their participation in a reaction grid experiment, and pay them using PayPal or Amazon. This new technology will allow us to collaborate with universities around the world in designing, running, and analyzing virtual world experiments.

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