Console vs. Class Wars
Friday Seminar Wrap up!
In this post, I summarize two Friday Seminars. The first is about the effect of income concentration on long-run economic growth. The second is about video game industry over time. Through this post, consider the following question:
Could an expanded middle class have helped Little
Samson be more famous than a certain hedgehog?
The Effect of Income Concentration on Long-run Economic Growth
Speaker: Hyungsik (Chris) Shin, PhD Student
Affiliation: Department of Computational Social Science, George Mason University
Date: March 27, 2015
Hyungsik Shin is working on an ABM that looks at the effect of income concentration. He sets the stage by saying that inequality is the result of different pay for different skills and unfair compensations for almost identical labor. In his research thus far, Shin has found that by preserving the unequal distribution system, the GDP per capita rose and fell. However, inequality, measuring via the GINI index, continued to increase.
In the model, Shin creates firms and the wealth is distributed by CEOs. First the CEOs take some profit, then divide the rest among the employees in the company. Agents can utilize their wealth — if their basic news are met. He has concluded that when both the lower and middle income brackets cannot continue to afford to buy from businesses, that the economy gets dragged down.
To offset these trends, he considers two possible methods — taxation and minimum wage. The general policy suggestion made by Shin was to relieve the income concentration — as a result both groups, low/middle and the rich will be better off. Shin suggested to do this through the increase/stabilization of minimum wage.
Why Little Samson didn’t defeat the Hedgehog
Speaker: André Lhuillier, CSS PhD student
Affiliation: Department of Computational Social Science, George Mason University
Date: May 8, 2015
This is the story about social influence and the distribution of successful information goods, according to Andre Lhuiller. Lhuiller did a deep dive on the video gaming industry, asking the question — why are some games more successful than others? Why didn’t Little Samson defeat Sonic, The Hedgehog? Lhuiller chose the video game industry, because video game culture, along with industry, is a well documented example of a complex info goods market and is a good example of the ‘winner-takes-all’ phenomena.
One of the things that Lhuiller highlighted in his talk is how the model of the production chain has changed over time.
Lhuiller takes this basic chain and turns into a model that has a couple of agent types — consumers, markets, and stores. The environment starts with 1000 consumers and 50 stores. The stores gather a base client population. Consumers build social networks.
Lhuiller’s goal is to understand how a market winner emerges — ‘winner-take-all’. His hypothesis is that as technology is more available, little firms can get a piece and this pushes the log-log of all of the games (units sold) by year further to the right.
Lhuiller suspects that this is because of the democratization of video game development platforms. You don’t need a publisher or a store to carry you. Now anyone can create a game and there are tons of games on different platforms.
In the time of Little Samson:
Developer > Publisher > Distributor> Retail > Customer > Consumer
Present day:
Developer > Distributor > Customer > Consumer
Because of the democratization of the industry, Lhuiller suggests, ‘Maybe if Samson was released today, then we would actually know about it.’
