What drives demand for loot boxes? An experimental study
What drives demand for loot boxes? An experimental study
The market for video games is booming, with in-game purchases accounting for a substantial share of developers’ revenues. Policymakers and the general public alike are concerned that so-called “loot boxes” – lotteries that offer random rewards to be used in-game – induce consumers to overspend on video games. We provide experimental evidence suggesting that common design features of loot boxes (such as opaque odds and positively selected feedback) indeed induce overspending by inflating the belief of winning a prize. In combination, these features double the average willingness-to-pay for lotteries. Based on our findings, we argue for the need to regulate the design of loot boxes to protect consumers from overspending.
Cordes, Simon
b92b023b-cb6f-475f-ad88-baa6475bba94
Dertwinkel-Kalt, Markus
f1ea1217-6cc3-46b8-9ed8-d43f36233238
Werner, Tobias
b1f092c4-e6b8-42e1-b615-4e150cd4b165
2 November 2024
Cordes, Simon
b92b023b-cb6f-475f-ad88-baa6475bba94
Dertwinkel-Kalt, Markus
f1ea1217-6cc3-46b8-9ed8-d43f36233238
Werner, Tobias
b1f092c4-e6b8-42e1-b615-4e150cd4b165
Cordes, Simon, Dertwinkel-Kalt, Markus and Werner, Tobias
(2024)
What drives demand for loot boxes? An experimental study.
Journal of Economic Behavior & Organization, 228, [106755].
(doi:10.1016/j.jebo.2024.106755).
Abstract
The market for video games is booming, with in-game purchases accounting for a substantial share of developers’ revenues. Policymakers and the general public alike are concerned that so-called “loot boxes” – lotteries that offer random rewards to be used in-game – induce consumers to overspend on video games. We provide experimental evidence suggesting that common design features of loot boxes (such as opaque odds and positively selected feedback) indeed induce overspending by inflating the belief of winning a prize. In combination, these features double the average willingness-to-pay for lotteries. Based on our findings, we argue for the need to regulate the design of loot boxes to protect consumers from overspending.
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More information
Accepted/In Press date: 22 September 2024
e-pub ahead of print date: 2 November 2024
Published date: 2 November 2024
Identifiers
Local EPrints ID: 505957
URI: http://eprints.soton.ac.uk/id/eprint/505957
ISSN: 0167-2681
PURE UUID: a8347776-d772-4060-a7a4-5b36f9dce93a
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Date deposited: 24 Oct 2025 16:35
Last modified: 15 Nov 2025 03:26
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Author:
Simon Cordes
Author:
Markus Dertwinkel-Kalt
Author:
Tobias Werner
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