Risking Treasure: Testing Loss Aversion in an Adventure Game

Loss aversion is a cognitive bias in which the negative feelings associated with prospective losses have a greater magnitude than the positive feelings of winning equivalent gains. Although well studied in behavioural economics, there is little understanding of whether and how it arises in game contexts. In games, the 'magic circle' may free players from their held attitudes, especially because in-game losses and gains are virtual. On the other hand, experienced immersion and a desire to achieve may make in-game decisions similar to out-of-game contexts. Knowing whether cognitive biases like loss aversion affect players is important for game designers when they create decision points and choices for players. We carried out a study in a Zelda-style game with 18 decision points about wagering gold at different win:loss ratios. Our results show that despite the temporary and digital nature of the game world, and the virtual nature of the gold, players still exhibited a strong bias towards avoiding losses. Our findings imply that designers should understand and account for loss aversion when setting up risk and reward structures in their games.