Beliefs That Entertain

Ashvin Gandhi, Paola Giuliano, Eric Guan, Quinn Keefer (), Chase McDonald, Michaela Pagel and Joshua Tasoff ()
Additional contact information
Ashvin Gandhi: NBER
Eric Guan: Riot Games
Quinn Keefer: California State University San Marcos
Chase McDonald: Riot Games
Michaela Pagel: NBER
Joshua Tasoff: Claremont Graduate University

No 16877, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Economic research on entertainment is scant despite its large share of time use. We test economic theories of belief-based utility in the context of video-game engagement. Using data on 2.8 million matches from League of Legends, we find evidence supporting reference-dependent preferences, loss aversion, preferences for surprise and suspense, preferences for clumped surprise, and flow theory from psychology. We then leverage our estimated model and an evolutionary algorithm to find the information-revealing process that maximizes player engagement. We find that the optimal version of the game has increased game play equivalent to 43% of the winner-loser gap.

Keywords: belief-based utility; reference-dependent utility; suspense and surprise; loss aversion; video games; entertainment design (search for similar items in EconPapers)
JEL-codes: D8 D9 (search for similar items in EconPapers)
Pages: 53 pages
Date: 2024-03
New Economics Papers: this item is included in nep-cbe, nep-cul, nep-spo and nep-upt
References: View references in EconPapers View complete reference list from CitEc
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Working Paper: Beliefs that Entertain (2024)
Working Paper: Beliefs that Entertain (2024)
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