The Rational Optimist: How Prosperity Evolves

by Matt Ridley

In 2004, a series of volunteer undergraduates sat down at computer screens at George Mason University in Virginia to play games for money. In the game each person found himself in a virtual village with his own house and field in which he could produce and consume red and blue virtual ‘units’ during brief sessions of the game. In each case, he knew that the more he acquired and the closer he got to a certain ratio of blue and red units (e.g., 3:1) the more real money he went home with. But unknown to him, he was either an ‘odd’ player, who was programmed to be faster at making red units, or an ‘even’ player, faster at making blue units. On his screen each player could see what other players (two, four or eight in total) were up to and he could chat with them on-screen during each run and in the 100-second gaps between runs. On one run of the game, in session six, two players had the following exchange: ‘wonder if u can give me objects’ ‘oh yeah.’ ‘heyyy, i make blues faster, what color do u make faster?’ ‘red’ ‘lol ok’ ‘LOL’ ‘so ill make all blues and u make all reds’ ‘then drop them to each other’s houses?’ ‘yea do it’ ‘ok 100% red’ ‘100% blue’ The purpose of the experiment, run by Bart Wilson, Vernon Smith and their colleagues, was of course to see if people discovered exchange and specialisation for themselves with no rules or instructions.