Hello, my name is Natanael Tomé, and I will be talking about our paper, entitled “Risking
Treasure: Testing Loss Aversion in an Adventure Game”.
As the title of the paper suggests, this research is based on a cognitive bias called loss aversion,
which is the tendency that people have on preferring to avoid losses than
acquiring equivalent gains.
And the reason for this is because, overall, losses are twice as impactful than gains.
In other words, people feel way more miserable losing $100 than they feel happy when they
win $100.
Loss Aversion is an intensively studied phenomenon regarding decision making in many contexts,
such as the stock market, law, health sciences, tech, and so on.
However, there are barely any studies related to loss aversion and video games.
Despite the popularization of game mechanics that can be linked to loss aversion,
such as daily quests, there is no published empirical research proving that players are, in fact,
as loss averse in games as they are in other contexts.
There are reasons to believe that loss aversion will be reduced in games, since, for example,
currency in a game generally only has value inside the game, and consequences of failure
in a game are small in comparison to failing doing similar activities in the physical world.
But despite the reduced stakes in games, one can assume that players can get attached to
the virtual world, and start being more aware of losing assets or progress in a game, re-calibrating
their notion of risk.
This is especially true when people invest a considerable amount of time interacting
with digital assets, giving them a high subjective value.
This lack of knowledge can negatively affect the work of game designers when balancing
their games and building interesting player choices and dilemmas.
For example, they can envision a game where players have to play aggressively to have
the most fun, but, if players are loss aversive, and the rewards for playing fast do not outweigh
punishment for failure, it can create a very different experience than they originally
envisioned.
For the previous reasons and to better understand loss aversion in games, we built a custom
2D Zelda-like adventure game in Unity called Small Adventure.
The game was a short single-player experience, and the money players acquired in the game
only had value inside the game.
In short, the game consisted of players exploring stages, killing monsters, opening treasure
chests, and progressing through different stages, having the opportunity to wager some
of their in-game money, called gold, in specified locations.
This gold could be used to buy one of two powerful swords in the game.
Our main goal for this study was to understand if, and when, loss aversion occurs in games,
by analyzing wager behavior during the game, taking into consideration variables such as
the amount of wager, demographic factors such as gender and age, and participant’s perceived
satisfaction with their progress.
We also collected qualitative data regarding participant’s attachment to gold, the in-game
currency in the game, to be able to better understand why players valued or not their
in-game money.
At the end of each stage players could choose if they wanted to wager part of the gold they
earned during the game.
As you can see from the picture, players were informed that they had a 50% chance of winning
or losing gold by engaging in those wagers.
The wagers were divided by ratios, and were categorized as favorable and unfavorable wagers.
Wagers people could lose more gold than they could win were unfavorable, while wagers where
people could win more gold than they could lose where considered favorable.
Also, each unfavorable wager formed a pair with a favorable wager when analyzing the
data, which we call equivalent wagers.
Equivalent wagers are pairs of bets that are an equal distance from the win:loss ratio
of 1.0.
For example, 0.25 and 4.0 If the difference of refusing an unfavorable
wager was significantly larger than accepting a favorable wager, that would signify that
people were biased towards avoiding losses.
As for the main results, we found evidence that players were loss averse in our game.
The overall likelihood of accepting a wager only notably exceeded 50% when the win amount
was more than double the loss amount.
Also, players were less likely to accept wagers with larger amounts than wagers with low amounts,
despite the ratio being the same.
Further, we could not find a significative difference of gender, but Wilcoxon analysis
for each gender individually showed that overall men were more loss averse than women in three
of the four pairs of equivalent wagers analyzed.
Other demographic variables analyzed, such as age, player type, and gambling propensity,
didn’t showed any significative difference as well.
We also found that satisfaction decreased more when players lost a wager than it increased
after a win, with participants being twice as dissatisfied with their progress after
losing.
These results highlight the challenges of designing and balancing punishment in gameplay
systems.
As for the responses related to players attitude towards gold in the game, overall most participants
where attached to their gold, felt that gold had purchasing power, and where hoping to
save money to buy the sword upgrades, which signify that we had success in introducing
sword upgrades as a way to give utility to our game currency.
The majority of participants also avoided wagering at least once during the game, with
the most common reason being that the amount they could win was lower than the amount they
could lose, so they viewed the wager as “unbalanced” or “unfair”.
Knowing that videogame players can feel loss aversion similarly to people in other contexts
is important when designing and balancing decision and players’ choices,
as to create games where players feel encouraged to explore and be creative instead of trying
to “optimize the fun” as a way to avoid losses. Also, knowing that losses can be so
much impactful for video game players can explain why some people stop playing games,
maybe becoming afraid of losing their status in case they start losing, for example.
The two main takeaways from this study is that loss aversion influences how people play
and behave in video games, and game designers need to consider loss aversion when designing
punishment and rewards in their games.
Thanks for watching.