[Continuing his regular look at game-related psychology issues for GameSetWatch, Jamie Madigan looks at how points-based purchasing systems affect how we think about money.]

Ever bought something from Xbox Live Arcade? The first time you may have been a bit bamboozled by the process because Microsoft doesn’t just let you put $15 on your credit card to buy a new game; purchases are done in “Microsoft Points” that you deposit into a kind of virtual wallet. Then you spend the points on stuff. And Microsoft isn’t the only one --Sony and Nintendo have similar systems, and Valve has even rolled out a “Steam Wallet” for in-game microtransactions.

Gamers possessed of equal parts suspicion and curiosity may wonder why our gaming overlords adopted such a strange system instead of just letting us pay real money for our purchases. Sure, it lets parents put finite funds in kids’ accounts and lets you buy points on gift cards, but are there psychological factors at play with these kinds of point-based systems that affect how we spend our money? I’m glad you asked, because yes there are. And what’s more, Microsoft may be missing a chance at getting us to pay more. Let’s take a closer look.

The Psychology of Waste Aversion

Leaving money on the table or in our Xbox Live account (or our Playstation Network account or our Wii Shop account) makes most of us a bit uncomfortable because it feels wasteful. Hal Arkes, who pioneered the study of the psychology of waste, theorized that this is a holdover from what’s called “the sunk cost effect.” This is when not losing unrecoverable money you’ve already sunk into a losing proposition becomes the main justification for throwing new money in.

[Continuing his regular look at game-related psychology issues, Jamie Madigan examines what studies of fairness in the workplace can tell us about how people react to "nerfing" in MMOs]

Most of us have been in a situation where we feel that we’ve gotten the short end of a pointy stick. Maybe we were booted from a game server, banned from a message board, or had our favorite MMO game character weakened by a patch in such a way that left us shaking our tiny fists at the injustice of it and vowing that we’ll show them, we’ll show them all. And maybe other times the same exact things have happened but we've able to just sigh and say, "Well, that sucks, but looking back I can see why they did it," and move on.

Such differing ideas of what constitute "fair" treatment given identical outcomes have long been in the interest of psychologists, particularly those studying justice in the workplace. The research started in the '60s by examining what people considered fair pay and distribution of other rewards relative to inputs like work, time, and nice bottles of scotch. Since then, though, the field has expanded to include the fairness of the process by which decisions are made, and several "procedural justice" rules to live by in order to create procedural justice have been discovered.

In addition to some applications in consumer psychology of pricing fairness, most of this research has been done in the context of the workplace, specifically trying to understand fairness perceptions of compensation, performance appraisal, and hiring decisions. For example, some jughead named Madigan identified several sure-fire ways in which you could mistreat job applicants during the interview process in order to make them hate you and think that the whole thing was unfair. Or, if you preferred, you could NOT do these things and better the odds that people feel treated fairly. Your choice!

It occurs to me that these same rules apply to the perceived fairness of "nerfing" in MMOs -- that is, when the efficacy of a class, ability, or any other part of a game is toned down. It is not hard to find people complaining about a given nerf and calling it unfair. But fairness is not an objective state like having an elevated heart rate being on fire. It's a judgment made by squishy human brains, and as such it's susceptible to molding by perceptions and how information is presented or framed.

Below are a few lessons from fairness in the world of work that developers and community managers should keep in mind when putting together the patch notes on any big nerfs. I've even included relevant quotes from World of Warcraft players on the official Blizzard boards for the sake of illustration. (Which isn't to say I think Blizzard is doing a bad job in this regard. You'll never make all the people happy all the time, and with 15 bajillion players it's not hard to find a few disgruntled ones to quote.)

[Continuing his regular GameSetWatch column, psychologist and gamer Jamie Madigan looks at a recent study about how our perceptions of simple game features can be affected by something as simple as seeing them presented in minutes or seconds.]

Hey. Hey! I've got a some questions for you:

• Do you think you'd be more likely to buy a new MMO if it came with a 28 day trial vs. a 4 week trial?
• Would you be happier if your game character got a new ability with a 1.5 minute cooldown or a 90 second cooldown?
• Would you feel more pressure from a 5 minute countdown timer or a 300 second timer?
• Would you be happier with new loot that improved your armor rating of 10,000 by 10% or loot that improved it by 1,000?

The non-idiotic among you (which, I think, should be ALL of you) may be thinking that those choices are meaningless, since the options within each pair are mathematically equivalent. Presenting people with different units that they can easily convert between shouldn't influence their choices. An article in an upcoming issue of Journal of Consumer Research suggests otherwise.

In the article, the authors propose what they call a "unit effect," which says that people often don't pay attention to the unit in which a figure is presented and can thus be overly influenced by the magnitude of numbers when comparing options. They found, for example, that subjects tended to see a smaller difference between warranties lasting 7 and 9 years, than between warranties lasting 84 and 108 months. This despite the fact that the differences between warranty length is identical in either case -- 7 years is the same as 84 months and 9 years equals 108 months.

In a follow-up study, the researchers manipulated the presentation of energy content in apples and candy by presenting the numbers in either kilocalories or kilojoules (1 kilocalorie = 4.184 kilojoules, so the latter unit resulted in bigger numbers). They found that presenting in kilojoules (i.e., with a bigger number) caused people to choose the apples more often if they were concerned about watching their calorie intake.

[Continuing his regular GameSetWatch column, psychologist and gamer Jamie Madigan looks at the psychological biases and quirks that may rear their head during those interminable Game of the Year debates.]

Ah, late December. The time when the gaming press gets its members together and tries to convince each other that one awesome game is more awesome than other awesome games –also known as the Game of the Year Awards.

When I worked as part of the creative team on GameSpy.com we would lock ourselves in a conference room and argue literally for hours about the minutia surrounding every big title released that year in order to generate our awards. I’m also listening attentively to the GotY content over on GiantBomb.com, which is dedicating a full week of multi-hour podcasts to the raw debates that generated its lists.

These podcasts are interesting to me because I keep seeing well established psychological phenomenon coming up, but almost as interesting is when a psychological quirk doesn’t manifest itself because the guys seem to be aware of its danger to the process and have taken steps to avoid it. So in this post I present my list of 2010's Top 5 Biases That Affect 2010 Game of the Year Discussions. Sponsored by Crest Whitening Tooth Strips (not really):

[Continuing his regular GameSetWatch column, psychologist and gamer Jamie Madigan looks at how a few simple psychological manipulations could tip players in online games in the right direction.]

Imagine that two people, Kim and Carlos, notice that their cars are filthy and both go to the same car wash to make things right. With their wash they each receive a special card that lets them earn a free car wash if they get the card stamped enough times during future visits.

Kim’s card says it requires 10 purchases for a free wash, but the perky girl at the counter gave her a head start with two free stamps. The card Carlos got doesn’t have any free starter stamps, but it only requires 8 future purchases instead of 10. So both Kim and Carlos are looking at the same number of purchases to score their complimentary car cleaning.

Who do you think is more likely to come back enough times to fill up his or her card? Kim or Carlos?

It turns out that it’s Kim, who got saddled with a card that required 10 total stamps, but who received enough free stamps to get her 20% of the way towards her goal. This is thanks to a phenomenon called “the endowed progress effect.”

Basically, the idea is that when you give people just a feeling of advancement towards a distant goal, they’re more likely to try harder and try longer to reach that goal, even relative to people who have an equally easy goal but who got no sense of momentum off the bat.

[Continuing his regular GameSetWatch column, psychologist and gamer Jamie Madigan looks at how a few simple psychological manipulations could tip players in online games in the right direction.]

How can developers of multiplayer games get their players to behave, cooperate, play their role, and not be such incredible jerks? I have an idea. Psychology is involved. You probably guessed this.

One of my favorite little experiments in psychology was done by John Bargh, Mark Chen, and Lara Burrows who were interested in how stereotypes were triggered.

In one experiment, they had participants unscramble sentences that made heavy use of words like Florida, old, bingo, wrinkle, ancient and the like. A control group did the same thing, but with words not reminiscent of the elderly. That wasn't the real experiment, though.

The important part of the experiment actually happened after the participants left the lab. Another experimenter sat in the hallway outside and discretely used a stopwatch to time how long it took participants to walk from one end of the hall to the other. Those who had been working with words related to old people actually walked significantly slower (you know, like an old guy) than those who had worked with other words.

Bargh, Chen, and Burrows also did another experiment where some people unscrambled sentences with words related to rudeness (bold, bother, brazen) and some worked with words indicating politeness (patiently, courteous, unobtrusively). All subjects then walked in on a scene where they had to interrupt a conversation to get some needed information. Those in the "polite" condition waited 9.3 minutes on average. Those in the "rude" condition jumped in after just 5.5 minutes on average.

[Continuing his regular GameSetWatch column, psychologist and gamer Jamie Madigan examines how research on jam reviews, of all things, might have surprising lessons for video game reviews.]

For every one of us, making decisions is part of hour daily human existence. Most of them are of little consequence –what to eat, what movie to see, what video game to buy– so we have developed an astonishing array of mental short-cuts to make these kinds of decisions comparatively quick, easy, and not too mentally taxing.

We may eat what we have eaten and enjoyed in the past, and by and large we use simple decision rules such as "I like this genre" or "I like this developer" to choose movies or games.

Other decisions, though, are either much more important or much more public and thus we put more work into it. Whom should we date? What college should we attend? Which house should I buy?

When faced with questions like these, many of us have probably drawn two columns on a piece of paper, labeling one "Pro" and one "Con" and then listing things in each column. When trying to decide whether to marry or stay a bachelor, famous biologist and five-time Counter-Strike world champion Charles Darwin did exactly that, producing the list below.

[Continuing his regular GameSetWatch column, psychologist and gamer Jamie Madigan takes a complex look at the psychological concepts behind immersion with regard to video games.]

Along with "OMGDUDESOAWESOME" one of the words that gamers like to toss around when describing their favorite titles is "immersive." But what exactly does that mean? And what makes a game immersive? Ask 5 people and you'll probably get 10 opinions, but psychologists have been studying immersion in various kinds of media for decades, including video games, so they could probably shed some light on those questions.

Except they don't call it "immersion." Instead, they call it "presence," which, admittedly, isn't as cool. Regardless, researchers have identified several kinds of presence in regards to how we perceive media, but it's spatial presence that I think comes closest to what gamers think of as "immersion."

Briefly, spatial presence is often defined as existing when "media contents are perceived as ‘real' in the sense that media users experience a sensation of being spatially located in the mediated environment." The idea is just that a game (or any other media from books to movies) creates spatial presence when the user starts to feel like he is "there" in the world that the game creates.

People who experience immersion tend to only consider choices that make sense in the context of the imaginary world. Someone immersed in Red Dead Redemption, for example, might be more likely to use travel methods, like stagecoaches, that make sense within the game, instead of methods that don't (like fast traveling from a menu screen). People immersed in media also tend to enjoy it more.

[Continuing his regular GameSetWatch column, psychologist and gamer Jamie Madigan looks at the psychological underpinnings of one of Bioware’s trademark RPG elements, defining 'psychological reactance' and pointing out how it's used in titles like Mass Effect.]

Earlier this year I was playing through Bioware’s Dragon Age: Origins and found myself on the twin points of one of the company’s signature dilemmas: with which of the non-player characters should I pursue a romantic interest? Should I woo the crabby but sexy Morrigan or should I court the more pure hearted and worldly Lelliana?

Or hey, maybe I should put the “role play” in “role playing game” and succumb to the roguish (literally) Zevran’s advances? Oh, I can’t commit! Bioware has been presenting me with this same basic choice since Baldur’s Gate (Viconia, before you ask) and I always end up doing the same thing: I string everyone along as far as I can until I’m absolutely forced to make a choice.

So why is this? Why do I invest so much mental and emotional energy into this pointless choice between make-believe people in a video game and why am I so reluctant to commit?

[Continuing his regular GameSetWatch column, psychologist and gamer Jamie Madigan examines a regular household tradition to muse on whether overindulging on games affects our reception of them.]

My wife and I have a Father's Day tradition where I get to celebrate the joy of parenthood by kicking everyone out of the house and playing video games for 12 hours straight. This year I decided to take a chunk out of my backlog by unwrapping Bioshock 2 and popping it in.

Normally it would take me weeks of playing a game like this in one or two hour chunks when I could find the time, and I'd often look forward to these bite-sized gaming sessions. But this time I wanted to use my annual alone time to burn straight through as much as I could without stopping.

A few hours later I was slinging plasmids and stomping splicers, but I was enjoying the game less and less. This made me think of something called "hedonic adaptation" that Dan Ariely had written about in his new book, The Upside of Irrationality, which explores some of the upsides of our irrational human nature. Had my playing Bioshock 2 for hours and hours straight diminished my enjoyment of the game?