# Psychology of Payoff and player's misperception

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larienna
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Joined: 07/28/2008

I started to read the book "The paradox of choice" as many people suggested to me and I ran down in one of the chapters to an interesting pay off theory established by kahneman and tversky which could be illustrated with the following picture:

http://journal.sjdm.org/12/12502/jdm12502001.png

Now this picture say 2 things.

First rule

If you give people a choice between gainning 100\$ or having 50% chance to win 200\$, they will take the 100\$

But if you give people a choice between losing 100\$ or having 50% chance to lose 200\$, they will take the 200\$

So people are more risky when it's about losing something then when it's about winning something. It seems that winning 200\$ is not percieved as twice more than 100\$, instead you would need to have 50% chance to win 250\$ or 300\$ to make it accepted.

Second rule

People see the loss of something twice worse than the gain of something. So -100\$ is twice worse than +100\$. This could be important in game design to balance resources to pay or sacrifice versus gains.

One game that come into my mind is Twilight Struggle. When you play a card of opposing faction you feel like you are losing more than gaining something. But the problem is that it could simply be a matter of perception.

If a card mathematically gives you -2 and +3, it will be perceived as -4 and +3 which makes you feel that you are not progressing, but mathematically you are progressing.

So this is it. I think designer should keep that in mind since in certain game situation, that player misperception could show up.

X3M
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Joined: 10/28/2013
larienna wrote: If a card

larienna wrote:

If a card mathematically gives you -2 and +3, it will be perceived as -4 and +3 which makes you feel that you are not progressing, but mathematically you are progressing.

Are you sure? I mean, here players actually know that they gain something and loose something at the same time.

If it was only -2, than I understand -4.

But on the other hand, perhaps the starting value was 4. Then -2 is divided by 2, while +2 is multiplied by only 1,5.

People might see 1,5 < 2.

I will put this theory to a test to a couple of MtG users that I know. I guess, they are the best group for it.

How did the writer of that book determine that a loss counts twice as hard in peoples head?

McTeddy
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Joined: 11/19/2012
Loss aversion is actually a

Loss aversion is actually a common psychological fallacy. The human brain is FULL of shortcuts that cause us to wrongly assume things.

I actually read the same book (And about 10 others on the topic) and it's seriously amazing. Apollo Robbins had introduced me to a list of books on the subject and it's changed the way I make anything.

Zag24
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Joined: 03/02/2014
Opportunity cost

I think that the Twilight Struggle issue (at least for me) is that I am also counting the lost opportunity cost. That is, if I am forced to play a card which costs me 2 points, I see it as worse than 2 points because I always hope to gain points on my turn. Also, seeing the smirk on my opponent's face when I'm forced to help him rather stings. :)

On the other hand, I recall from my one time playing Twilight Struggle that there is a way to play a card that negates its action (that could cost me points). It's satisfying to play in this way a card that would have REALLY helped my opponent, but now it is wasted. Even though that technique doesn't gain me a whole lot, the opportunity cost to my opponent (if he had drawn that card) is what makes it gratifying.

My point is that opportunity cost comes into play in both directions, at least in most board games.

MarkD1733
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Joined: 07/05/2014
larienna wrote: First rule If

larienna wrote:

First rule

If you give people a choice between gainning 100\$ or having 50% chance to win 200\$, they will take the 100\$

But if you give people a choice between losing 100\$ or having 50% chance to lose 200\$, they will take the 200\$

The other thing that could be at play is simply the concept of consequences in terms of:
Immediate vs Future
Certain vs uncertain
Positive vs negative

This is something I picked up reading Aubrey Daniels. Basically, an immediate/positive/certain consequence trumps future/negative/uncertain. That is what I see in the first instance. In the second instance, its flipped sorta, because now its a negative/immediate/certain consequence competing with a less negative (i.e., more positive)...its not easy to simply take a loss without a chance of negating it. Its gambling, plain and simple. So, with what you said, that -\$100 feels like -\$200--twice as bad anyway. I might as well try my 50% chance at avoiding it. So does the model indicate how much higher it has to go to assure taking the chance in the first instance? Ever watch the gameshow "Let's Make a Deal!"?

However, in a game, unless you are using straight up chance or press your luck mechanics, the risk is more related to how well you think you know your opponents' plays and strategies. The basic concept still probably holds true; I would think that the perception feels different.