Life Inside a Simulated World

I was thinking in class: could we ever simulate our own world? As a programmer, I really enjoy the thought of creating worlds. Each time you run a binary, the computer assigns part of its memory and created a tiny little world with a specific mission. But what if we could recreate reality? Maybe we could use millions of yotabytes to accurately represent a house with every detail. Air, materials, physics, and whatnot could be included. Every single aspect you would see in real life. Maybe we can achieve such detail that if you were connected with a special pair of goggles and had special effects in your room, you would actually doubt whether it is real or not. However that’s not my main interest. What I’m really looking for is to simulate society. Maybe we could throw in users Matrix-style and make them live inside the simulated world. We would give them enough space and virtual resources to live. Of course, they would need to eat in the simulation in order to be nourished in real life (somehow). If we (I’m volunteering) don’t eat inside, we don’t get fed outside. If we starve inside, we starve outside. Let’s say we manage to gather 500 people and throw them in. We, the users, will be assigned virtual strengths. Maybe magic. Who knows. What would happen with us? By the way, it should be evident, but death inside is death outside. Now I think I’ve set the panorama. Here goes what interests me the most: would we create a society from scratch? No one said everyone would speak the same language. No one stated age restrictions. Just 500 humans inside a virtual world. Maybe someone would step up and enforce laws. Maybe we would go berserk and terminate each other. We can’t know till we try. I believe that we would quickly form governments. What do you think that would happen inside the simulation?