The Psychology of Video Games

If I were to compile a list of frequently asked questions people send me, the first would be, “Hey, I have this awesome idea. WRITE AN ARTICLE ABOUT IT!” The answer to this question is, “Uh, okay. I’ll put it on the list. Stop yelling.”

Another common question is “I love this topic. What kinds of books would you recommend?” This one takes a little more time to answer, but since I keep getting it I thought I’d recommend some of my favorite popular books in psychology. None of these deals with video games, but if you’re interested in the psychology behind this stuff, you can’t go wrong with any of these recommendations.

Best Social Psychology Book: Influence: The Art and Science of Persuasion by Robert Cialdini

The central thrust of Cialdini’s book is on psychological mechanisms that elicit what he calls the “Click, Whirrr” phenomenon. That is, things that cause us to react automatically and without thinking about it. As you might guess from the title, most of these Click, Whirrr mechanisms have to do with how people influence us –to like them, to give them things, to do what they ask us to, and most often to buy things from them. Each chapter focuses on a particular psychological lever, like reciprocity, liking, scarcity, consistency bias, and so forth. Cialdini wraps up each segment of the book with advice about how to recognize these manipulations and how to defend against them.

What I love about this book is how every topic is made imminently practical and relevant to my every day life. There’s lots of discussion about science and studies, but everything is in the context of things that matter to us from buying groceries to volunteering to making friends. It’s very easy to read and quite likely to contain a lesson or two that will stick with you for the rest of your life.

Some of my articles drawn from what I learned in Influence:

• How Reciprocity Yields Bumper Crops in Farmville
• The Power of You. No, wait, others. I Meant The Power of Others
• Three Reasons Why We Buy Those Crazy Steam Bundles

Best Neuroscience Book: How We Decide by Jonah Lehrer

Strictly speaking, I’m not sure Jonah Lehrer is actually a neuroscientist, but he is an astute student of the field and he does a good job writing about it. Like other books near it on the bookstore shelf, How We Decide tackles a lot of the same “how does psychology affects what we decide?” questions, but it looks less at things like cognitive biases, decision-making heuristics, and social identities and more at the world of neurons, brain chemistry, and bits of gray matter with names ending in “-alamus.” I liked his chapters on reward seeking behavior particularly well.

Most of the conclusions that Lehrer comes to are similar to those arrived at by psychologists, but it’s really interesting to see how he does it with a largely different set of tools. And like all of the books in this list, it’s very readable.

Some of my articles drawn from what I learned in How We Decide and Lehrer’s blog:

• Phat Loot and Neurotransmitters in World of Warcraft
• Zerg Rushed by a Tiger? Just Give Up.
• Fundamental Attribution Error and a Tale of Two Tigers

Best Behavioral Economics Book: Predictably Irrational by Dan Ariely

If you want to get a feel for where the field of behavioral economics (basically, judgment and decision making in the real world) you could do a lot worse than Predictably Irrational and probably not any better. In it, Ariely examines what economics and human decision making in general look like when you stop pretending that people are completely rational. What’s great about this book is how the author draws from his own, deep well of experimental research to deal with practical issues related to every-day decision making. He covers things like the difference between economic and social rules in exchanges, the power of “free,” what makes people steal, what makes us think irrationally, and what makes us honest. There are also chapters that make the bulwark concepts of behavioral economics easy to understand –things like anchoring, the endowment effect, conformation bias, and more.

The best part of Ariely’s writing is how he seamlessly weaves descriptions of experimental procedures and results into those practical issues. You’ll see very clearly why the studies he and his colleagues conduct matter to you and everyone around you. There’s hardly any inferential leaps to be made; it’s all very practical stuff that will change the way you think about a lot of things that you do. Really, if you were to only read one book on this list, I’d say Predictably Irrational would be your best bet.

Some of my articles drawn from what I learned in Predictably Irrational:

• Just One More Level: Decision-Making Under Arousal
• The Endowment Effect and Used Game Sales
• Xbox Game Room’s Dummy Pricing (Not for Dummies)
• The Psychology of Sony’s Playstation Move Announcement

Second Best Behavioral Economics Book: Nudge by Richard Thaler and Cass Sunstein

I almost left this book off the list because I think Ariely did the behavioral economics a little better, but ultimately I think I have to recommend it because Nudge is good enough and covers enough different ground to stand on its own. This is in large part because of how the authors widen their scope to encompass not just personal decision-making, but also law, public policy, and politics that are born from those individual decisions. So topics range from how we can improve people’s decisions about what to eat to how to support socially progressive issues.

The book gets a little meandering in the back quarter, but generally it’s very tight and the authors have a slightly cheeky tone that makes it easy to read and easy to relate to. And again, many of the topics, like the status quo bias, compensatory decision-making, and anchoring are made relevant to bigger issues like saving the environment, social progress, organ donation, charitable giving, saving for retirement, and choosing a prescription drug plan. It’s some of the same stuff as in Predictably Irrational, but writ large.

Some of my articles drawn from what I learned in Nudge:

• Why Do We Love Genres So Much?
• The Status Quo Effect (Or, Pay Without Play)

So, that should get you started. But what about you all? Have you read any other books that you think are worth recommending?

Last week at the Electronic Entertainment Expo (or “E3” if you’re in a hurry) the two big stories for console makers were 3D¹ and new motion controllers. As I watched Sony’s press conference where they pitched the Playstation Move² something struck me about the way that they presented the pricing for the product.

Peter Dille, a Senior Vice President at Sony, started the announcement by throwing up a $49.99 price up on the screen behind him. The crowd, which had been worried that the Move and its competitor Kinect on the Xbox 360 would come out in the $150 range, seemed really pleased by this. There was even cheering! That mood tanked, though, when Dille plunged ahead and noted that, uh, actually that was just for ONE part of the thingie. To get the quasi-optional “navigation controller” you’d have to drop another $29.99. You could FEEL the wave of “WTF?” that swept through the theater. Then Dille went on to point out that you’d need to buy a Playstation Eye camera accessories to get the full effect, but that they were bundling it, some sports game, and the Move controller (but not the navigation controller) for $99.99. Here, you can see it in the first 30 seconds of this video:

Those adept at the maths quickly figured out that if you wanted to buy all four things –the Move, the navigation controller, the game, and the Eye camera– you’d be out about $130 give or take a penny or two even with the bundles.

I myself quickly started thinking through Sony’s announcement from a psychology angle, and my first thought was that they had screwed up. I wrote last week about how our preference for all-you-can-eat/play pricing is rooted in the fact that we experience diminishing sensitivity to increases in losses as they go up –we experience a bigger jump in aversion between a loss of $5 and a loss of $10 than we experience between losses of $1,005 and $1,010. The thing is, prospect theory³ holds that we have similarly diminishing sensitivity to gains. Look at the graph!

Figure 1: Diminishing Sensitivity to Gains. Uh, sorry about recycling an earlier graph, but I kind of ran out of time.

What this means is that we more enjoy getting lots of little things that add up more than we like getting one big lump of thing, even if their objective values are the same. Finding a series of four $5 bills is going to make us more giddy than finding one $20. Or, to put it another way, according to our mental accounting:

That’s just how our emotional brains work.

And it hasn’t gone unnoticed by advertisers and marketers, who have followed its lead to create what I call the famous “But wait! There’s more!” style of pitching your wares. Just look at any late night infomercial for an example. “Order now and you not only get the juicer for $99.99, but you get the a chopper attachment, a recipe book, five pounds of mangoes, and this adorable kitten –all for free!” True masters of this pitch will stretch out the “free” bonus gifts, parceling them out like a trail of candy so that you perceive them as a series of separate additions to the offer instead of one big bundle. This is a more effective sales technique than just saying “You get all this stuff for $99.99″ because it side steps that diminishing sensitivity to gains.

This is, in fact, the boat I thought Sony was missing with the way they did their Move price announcement. It seemed to me that it would have made more sense to come out at a price of $129.99 for the Move, but then systematically and not too quickly note that for that price in addition to the Move controller they’re also going to throw in a navigation controller –valued at $29.99! And a Playstation Eye accessory that currently goes for $39.99! Does that sound like a good deal? But wait! What if we threw in a free game valued at $59.99? OMFG! Dude! All for $129.99? That’s CRAZY! That’s like getting the Move controller FOR FREE!

But wait! Buy now and we'll throw in 1 + 1 + 1 + 1 Move controllers for the price of 4! What a deal!

I got to thinking, though, and eventually came to the conclusion that Sony probably beat me to: despite the power of what I describe above, the way they did it was probably smarter but because of a different psychological phenomenon: anchoring.

You may remember anchoring as our tendency to give undue weight to the first figure⁴ we hear when determining the value of something, even if the number is completely unrelated. As I mentioned in my article about the efficacy of those Steam bundle sales, behavioral economist Dan Ariely and his colleagues did a nifty experiment⁵ where they effected auction prices just by having bidders write the last two digits of their social security number on the top of their bid sheets. Those with high numbers (like 85) bid way more on items than those with low numbers (like 18). Anchoring!

Sony’s presenter capitalized on anchoring, quite deliberately I bet, when he threw up the $49.99 price for just the Move controller. There will be plenty of chances for Sony to advertise the value of bundles using diminishing sensitivity and the “But wait! There’s more!” tropes. Its job at E3 was to come out ahead of Microsoft in terms of how expensive people see its motion controller as when THAT was an important question on everyone’s mind. By throwing out the $49.99 number instead of the $129.99 number, Sony accomplished that. Sure, anybody can do the math, and judging by the audible groans from the audience plenty of people did. But that’s not the point. The point is that you⁶ are going to anchor on the lower number and think of the Move as relatively cheap.

And just imagine how much more effective that $49.99 anchor would have been if Microsoft really had announced the $149.99 price everyone expected for its motion controller, Kinect. I bet some folks at Sony were pretty annoyed that things didn’t break that way.

1. God, don’t get me started… [↩]
2. Think Wii Motion Plus with a glowy ball on the end [↩]
3. Kahneman, D. & Tversky, A. (1979). Prospect Theory: An Analysis of Decision under Risk. Econometrica, 263-291. [↩]
4. Or any perception, really [↩]
5. Ariely, D., Loewenstein, G., & Prelec, D. (2003). Coherent arbitrariness: Stable demand curves without stable preference. Quarterly Journal of Economics, 118, 73-105. [↩]
6. Or if not you, Mr. hyper rational guy, then plenty of buyers and analysts [↩]

Back in April of this year, Realtime Worlds announced the pricing model for its soon to be released MMO, All Points Bulletin, or “APB” as the cool kids say. A lot of people were looking forward to the futuristic cops vs. robbers game, but the announcement about the pricing elicited jeers from a lot of players. Here’s how the press release at the time broke it down:¹

• Buy the game for the MSRP of $50
• Play 50 hours for “free.”
• Buy additional game time using one of two options:
• $6.99 for 20 hours OR
• $9.99 for unlimited hours during the next 30 days²

Upon hearing this, the nerd rage was palpable on some forums. For sure, this was partially over the fact that APB was to have any monthly fee AT ALL, despite that being par for the MMO course. But there seemed to be two other targets of the virtual hand wringing. First, the play time included with the retail product was doled out in hours (50 of them, to be precise) rather than the traditional 30 days of unlimited play. Second, the $6.99 for 20 hours of game time seemed a bitter pill to swallow, apparently because people didn’t want to pay by the hour. People seemed to willfully ignore the fact that the game DOES include traditional 30 days of unlimited play for one flat rate option, though.³

A typical fan reaction to APB's metered payment plan.

Now, I’m actually not 100% sure as of the time of this writing what APB’s pricing models will look like when the game launches. I can’t find anything on the official site, and Realtime World’s designer Dave Jones recently told GamePro magazine said that “gamers won’t have to commit to any kind of monthly subscription fee or utilize a traditional microtransaction system.” I’m not sure what that means, but regardless I think it’s still interesting to focus on people’s reaction to that initial press release in May. Why were they so turned off by the pay by the hour options?

As it sometimes turns out, psychology holds the answer. But let’s get there by way of a discussion about cell phones.

Phones and MMOs

Earlier this year I needed a new cell phone but my wife forced me to admit that I didn’t really need anything fancy. So I went shopping and, being a completely rational decision maker, I selected one of those cheap, pay-as-you-go phones where you buy prepaid minutes. The plan I selected essentially worked out like this:

1. Buy the phone for the MSRP of $50
2. Get $35 worth of air time included for “free.”
3. Pay $0.10 per minute for all calls, $0.20 per text message
4. Buy additional air time as needed

Does that look familiar? It’s not too far off from APB’s “$6.99 per 20 hours” option, but more on that in a minute.

I could have easily gone for a $60 a month plan that let me spend unlimited hours on the phone, only taking breaks to send unlimited text messages. Or I could have sought out a plan that gave me hundreds of minutes per month, which equates practically unlimited minutes for my purposes. And not only would I have had plenty of company, many of us would probably have been overpaying. A 2009 article in the LA Times⁴ reported on a study showing that the average user was paying over $3.00 a minute when you considered how much they paid and how many of their plan’s minutes they actually used. But not me! Bravo! Hooray my precious rationality!

Only it still doesn’t feel right. Because I know that every time I flip that thing open to make a call I have to pay $.10 a minute I’m actually loathe to use the phone. I keep calls as short as possible, I groan when people ask me to text them, and when I’m traveling I’ll actually stalk my wife on Facebook until she comes online so I can ask her to call me on her phone.

A Bias for Flat Rates

The reason for my discomfort is something called “the flat rate bias.” Generally, people like flat rates and don’t like being on a meter.⁵ But why does the flat rate bias exist? Well, as is often the case with psychology, it’s turtles all the way down⁶ because that’s just how people are.

A bit of work by psychologists Daniel Kahneman and Amos Tversky known as “prospect theory” does a pretty good job of taking us down ONE turtle, though. One thing that Kahneman and Tversky found was a “law of diminishing sensitivity.” Basically, this means that the amount we wince at any one reasonable losses eventually flattens out. If you graphed it for a random person, it may look something like this:

Figure 1: Artist's rendition of diminishing sensitivity to losses. Actual curves may vary by person and situation.

The idea is that our comparative displeasure at different losses ramps up quickly but then levels off. This is known as “diminishing sensitivity”⁷ So, for example, we experience a bigger jump in aversion between a loss of $5 and a loss of $10 than we experience between losses of $1,005 and $1,010. It’s related to the reason why we’ll feel great about saving $.30 on a tube of toothpaste, but probably won’t bother to drive across the street in order to save $3 –ten times as much!– on a flat screen TV.⁸

One implication of diminishing sensitivity is that we experience greater subjective pain from multiple losses than we do to one big loss of equal value. Answer honestly: implications for your insurance aside, would you be more pissed about three $30 parking tickets over three days or one $90 ticket? Researchers have posed exactly that kind of question, and found that people generally prefer the one big loss over multiple little ones. Why? Because of diminishing sensitivity to losses:

• Pain of $30 loss = 100 “pain points”
• Pain of $90 loss = 250 “pain points”
• 100 X 3 = 300
• 300 > 250

This is the same reason people buy unlimited or excessive minutes on their cell phone plans. We’d rather have one big cut that seems less painful overall than endure a thousand (or 900 + unlimited mobile to mobile) cuts as the minutes fall away one by one. As a side note, it’s also the reason that rent-by-mail services like GameFly are so appealing relative to renting games one at a time. It’s preferable to sweep all our losses into one big, monthly pile and feel like we have “unlimited” rentals for that price than it would be to rent one game at a time by the day or even by the week. Ditto for Netflix and DVDs. Yet how many of us have let games or DVDs sit around for days or weeks before getting to them? Personally, I know that by my calculations renting “The Hangover” from Netflix just cost me over $11 because I held on to it for 5 weeks before finally watching it last night. Not exactly a great deal.

Flat Rate Bias and APB Revisited

So, armed now with this information about the flat rate bias and diminishing sensitivity, let’s circle back to one of the APB pricing described in that April press release, particularly that “$6.99 for 20 hours” option. My guess is that most people won’t go that route because of the flat rate bias. It’ll just be too painful to feel every individual hour pass away and think that it’s another one your prepaid hours gone forever. In contrast, people who paid just a little more can feel comparatively less pain because they experience just one loss instead of a parade of many smaller losses that feel like they add up to more.

The funny thing is, though, that like those people paying over $3.00 a minute for their cell phone calls and me with my rented copy of “The Hangover,” there will be some number of APB players who OVER pay by selecting the $9.99/month, unlimited hours plan. Because they play fewer than 20 hours in a month but think it’s worth it not to have to feel like they’re “wasting” limited minutes all the time.

In actuality, Realtime World should probably be commended for giving its players the option to save money with a metered plan, especially since it’s in their financial interest to take advantage of the flat rate bias and encourage those people to over pay. Yet they’re not. I asked MMO game designer Nik Davidson of The Amazing Society what he thought, since he had presented a pretty great talk at this year’s Login conference, in part about this very topic. ” I think what they’re doing is brilliant,” Nik said. “People love having options. Being able to choose between two ways of paying and feeling good about the choice they made makes it much more likely that they’ll make a choice at all. I think a relatively small minority of their users will choose the rated plan, but simply having the rated plan will encourage more people overall to play and pay.”

I couldn’t agree more. Now, if you’ll excuse me, I have to go psych myself up to add $20 to my prepaid cell phone balance.

1. For those of us paying in US Dollars, anyway. USA! USA! [↩]
2. Or you can also buy 60 or 90 day subscriptions at discounts [↩]
3. There was also some vague stuff in there about being able to earn game time in-game, but I’m gonna ignore that for now. [↩]
4. Lazarus, David (2009). Talk Isn’t Cheap? For Cellphone Users, Not Talking is Costly Too. Los Angeles Times, March 8, 2009. [↩]
5. Actually, aversions to metered payments vary a bit by culture; Eastern cultures show much lower preferences for flat rates. But you know …USA! USA! [↩]
6. Click here if you need help with that reference. [↩]
7. We also have diminished sensitivity towards gains, but because of loss aversion the magnitudes are smaller. [↩]
8. The caveat here, though, is that we don’t treat expenses from purchases in quite the same way as other losses, but that’s another article. [↩]

While doing research for an article on the effects of anonymity on player behavior, I came across a fascinating study that I couldn’t find a place for in that piece, but which I wanted to share somewhere.

In an article appearing in the Journal of Personality and Social Psychology¹ cultural anthropologist R. J. Watson considered the question of what makes it easier for young men to kill enemies² while at war. Deindividuation theory holds that people who lose their sense of self-identity are more likely to lay aside internally held morals and look to the situation or the dominant morality of a crowd for guidance. You see this kind of thing most starkly in people who become anonymous and blend into groups.

Think about it: soldiers and warriors throughout history have changed their appearance when they go into service, especially when they prepare for active battle. At a minimum, they change their clothes, hair style, and mannerisms. Obviously, there are various benefits to such standardization, including making it easier to outfit an army, build group cohesion, and tell friend from foe. But at the more extreme ends, warriors apply war paint, piercings, masks, or make other drastic changes to their appearances. Watson wondered if soldiers and warriors who most radically change their appearance were more likely to not only get on with the killing, but be more willing to engage in more brutal acts like mutilation and torture. To test this hypothesis, he looked at archival data about world cultures compiled by anthropologists, missionaries, and other first-hand observers.

The results were pretty stark and pretty clear: in 90 percent of the cultures where wartime opponents were mutilated or tortured³ the acts were done by warriors who radically changed their appearance before going into battle. One could see this as support for the supposition that when you make a person feel less like an individual and more like a faceless part of a group, they’re more likely to go whole hog when you sic them on the enemy in a combat situation. Then, when peace time comes, they can step out of that identity by reverting their appearance.⁴

As you can see, the addition of ...well, actually this one does kind of look like me, so maybe it's a bad example.

This got me thinking about character creators in video games. A lot of games allow extensive control over the appearance of your in-game identity, letting you adjust eye size, nose position, cheek height, chin prominence, and many frankly ridiculous other factors. Some of these are so extensive that you might be able to create, if you wanted to, someone that looks quite a bit like YOU instead of applying all kinds of fierce tatoos, face paint, piercings, or bowler hats. (If you actually do have fierce facial tattoos, then, well, that’s cool. That’s cool.) Other games even let you use photographs of yourself to virtually put yourself in the game.

So, given Watson’s findings above, would you expect people who made in-game avatars to look like them act differently, on average, from those who make savage looking avatars that look nothing like them? I think so. This is one of those times when I wish I had an awesome research lab complete with computers and a popcorn machine, because I’d love to do this study. Deindividuation theory suggests that playing as someone who looks like you would lead you to pay more attention to your internal moral compass (whatever that may be) in the same way that losing your identity behind a costume would make you more likely to adopt the morals of those around you or the ones implied by your environment or even the costume itself. Heck, one study⁵ even showed that simply placing a mirror in front of subjects led to this kind of effect, so it make sense. Maybe you’d have a harder time playing that “evil” character in the latest Bioware RPG.

So, anyway, somebody get out there and do this research. Then when you publish it I’ll settle for being listed as the second author.

1. Watson, R.J. (1973) Investigation into Deindividuation Using a Cross-Cultural Survey Technique. Journal of Personality and Social Psychology, 25, 342-345. [↩]
2. Or anyone, really [↩]
3. And killed; don’t forget killed [↩]
4. And, of course, nobody means disrespect to our (or your) men and women in uniform; this study looked at acts far beyond donning simple Army fatigues [↩]
5. Froming, W. J., Walker, G. R. & Lopyan, K. J (1982). Public and private self-awareness: When personal attitudes conflict with societal expectations. Journal of Experimental Social Psychoogy, 18, 476-487. [↩]