Social Games that Sway Behavior

With the rise of social networks, game designers are finding new paths to desired outcomes.

By Kristina Grifantini

Can your social network make you healthier? It's a question that health organizations are asking more and more--as part of a wave of new gaming experiments that aim to persuade players to think and act differently while having fun.

To your health: Healthseeker, a Facebook game which launched this summer, encourages users to take on healthy "missions." When players complete healthy actions, they are rewarded with points, virtual gifts, and approval from friends in their social networks.

In June, Vancouver game consulting company Ayogo launched a Facebook game called HealthSeeker that awards "life experience" points or virtual gifts when players with diabetes make small lifestyle changes. For example, it might assign a challenge such as not putting sugar in a single cup of coffee and then reward the player for completing the mission.

The challenge of this kind of game isn't to convince people of something but to get them to act. "People are already emotionally committed to their health," says Michael Fergusson, the founder and CEO of Ayogo. "They know they need to eat better and exercise." But approaching that challenge all at once can seem overwhelming and thankless. "We pay them to take healthy actions," says Fergusson. Reinforcing those small actions could turn them into habits that add up to better health.

"The game is an ongoing exploration for each player," adds Manny Hernandez, cofounder and president of the Diabetes Hand Foundation, a nonprofit social-media group that worked with Ayogo and the Joslin Diabetes Center to develop the game. "We hope that through that it can become a very strong source of support for the player," he says. So far, more than 3,000 people have signed up.

Businesses see value in the concept. "We were really trying to utilize the game players' own online social network as a source of inspiration and support," says Susan Holz, a public affairs and communications representative at the German pharmaceutical company Boehringer Ingelheim, which funded the project as part of an initiative to encourage creative online games related to diabetes.

The real power of the game lies in the principle of reciprocity, the tendency to do something positive for someone who did something positive for you. Game designers take advantage of reciprocity by making it easy for users to send gifts to friends ("You just accepted this pig" in Farmville, or "Thank Don by sending a free mystery bag back!" in Mafia Wars). Even if users know that the cost of a gift is minimal--often no more than a mouse click--"in general we found people will value the thing they receive," says Fergusson.

In HealthSeeker, a user can send a "Kudo"--a virtual gift designed to be interesting or amusing--to reward friends for completing a task such as going a day without chocolate. When they receive a Kudo, users feel rewarded and acknowledged for doing something difficult, Fergusson explains. They will also feel a subtle but powerful obligation to return the favor, he says: "That obligation drives the loop of social games."

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The game also draws on the power of social networks in other ways. Users can accept challenges from friends, which Fergusson says make them more likely to take on the recommended mission (the average player is working on two active missions; players who have accepted a friend's challenge average four). What's more, users tend to return to the game more frequently when their friends are also playing.

While it's too early for HealthSeeker to have more than anecdotal evidence of the success of the game, other games have shown conclusively that they can alter behavior--even more than expected at times. MovieSet is a website that chronicles movie production to generate advance buzz for largely unknown films before promos hit TV or radio. When it launched a behind-the-scenes Web show last year, it initially attracted few viewers. The prerelease excitement that MovieSet craved wasn't there.

So the company turned to Ayogo, which created an online trivia game with answers hidden in the show itself. Players could test themselves, invite friends to take the quizzes, and compare scores. Successful players were rewarded with more video trailers of the MovieSet films. What would have been given away for free now had to be "earned."

It worked. Within a month, MovieSet's overall Web traffic skyrocketed from 24,000 to 125,000 unique visitors, according to Ayogo. The average visitor watched five trailers, up from one or two, while video views rose to 500,000, up from 30,000. The rest of the site benefited as well, with traffic to pages not featured in the game growing from 24,000 viewers to 45,000. What's more, users readily volunteered valuable information on their movie-watching habits--an alternative way to win the trailer clip if they failed to answer the trivia questions correctly.

The psychology is simple but powerful: not only do people like to win, but they don't like to feel like they've lost something, even if it's just a chance to watch a trailer.

The movie game ultimately resulted in over a million views of promotional videos without requiring the producers to pay for any traditional marketing. "It was a very successful mechanism for jump-starting our traffic," says Colleen Nystedt, the president and CEO of MovieSet. "It helped build the audience both for the hosted show and the films being discussed."

As more and more industries look to social games to change habits, games can become a win-win situation: the user feels engaged and rewarded for winning while a company or a society can achieve a critical goal.
"Games are stylized systems of social interaction that incentivize engagement and behavior," says Kati London, who serves as the senior producer at the New-York based game consulting company Area/Code. "That potentially makes them great engines for influencing and producing behavior change."

Area/Code was hired by the Discovery Channel to produces games meant to stimulate new thinking about energy while promoting the network's programs. Area/Code created a Facebook game called Power Planets, in which users are assigned a planet. Players gain points by creating buildings and developing energy sources. They lose the capacity for earning points when pollution increases or natural resources are depleted. Every few days the planets are shuffled among the players.

Rather than explicitly promoting conservation, the designers wanted the game to make users feel the effects of risky environmental decisions by tapping into their sense of social responsibility. "You make choices about how to keep your inhabitants happy while maintaining a healthy planet, but then you pass your planet to another player on Facebook and you get someone else's planet--which may or may not be left in a good state," says Allison Rand, a vice president at Discovery. "The response was much like the real-life feeling of treating your planet poorly and leaving it to your grandchildren to clean up."

The game, sponsored in part by Shell, was also meant to promote the Discovery series Powering the Future, which aired in July and gave viewers codes that unlocked powers in the game. Power Planets was the most popular game across the Discovery websites while the show was being promoted and aired, according to Rand, and the most popular game in Science Channel's history.

As social games grow increasingly popular, more and more companies are recognizing their inherent power to persuade. "This idea of gamification is spreading broadly," says Ayogo's Fergusson. "I hope that we can make the world better and more fun at the same time."

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China supports Euro, Offers to buy Greek debts

China's premier, Wen Jiabao, pledges support for euro

The country vows it will not reduce its holdings of European government bonds, and will double trade with Greece

• Reuters
• The Guardian, Monday 4 October 2010
• Article history

 

Chinese prime minister Wen Jiabao, addresses the Greek parliament in Athens yesterday. Photograph: Petros Giannakouris/AP 

China pledged to support a stable euro and not reduce its holdings of European government bonds, in an effort to deflect criticism of its foreign exchange policy ahead of this week's EU-China summit.

Chinese premier Wen Jiabao, who is at loggerheads with the United States over the yuan and likely to face similar complaints during his tour of European countries emphasised China's willingness to cooperate with the EU.

"I have made clear that China supports a stable euro," he said during a visit to Greece at the start of a one-week European tour. "We will not reduce the holdings of European bonds in our foreign exchange portfolio."

Wen, who offered on Saturday to buy an unspecified amount of Greek government bonds when debt-laden Athens resumes issuing, said he was glad Greece was starting to emerge from the shadows of its debt crisis. Wen vowed to double trade with Greece to $8bn (£5bn) within five years and provide a $5bn credit line to Greek shipowners buying Chinese-built vessels.

China has said it needs to diversify its foreign currency holdings and has bought Spanish government bonds. Chinese state entities have been conservative about investing in foreign financial markets and the Chinese government faces domestic criticism over losses incurred from the global financial crisis.

At the height of the European debt crisis this year, Chinese officials, concerned that the crisis could hurt the global economy, pressed European officials to restore confidence in the euro. But Beijing has rejected discussion of its foreign exchange policy. It even blocked an attempt by G20 leaders in June to praise its decision to allow greater flexibility in the yuan's exchange rate.

Ahead of a China-EU summit on 6 October, Wen urged the bloc to recognise China as a market economy, making it less vulnerable to anti-dumping charges under WTO rules. In exchange, China offered to boost copyright protection and widen bilateral trade.

"China commits to improving the investment environment, to intensify copyright protection, widen bilateral trade and upgrade technology cooperation," he said in his speech in Greece's parliament through an interpreter.

But despite its growth, China remains an emerging economy, Wen said. "The basic reality of China, such as a huge population, a weak economic base, and unbalanced growth has not radically changed," Wen told parliament.

"Per capita GDP is just one eighth of Greece's and the percentage of population below the poverty line is three times that of Greece. China continues to be an emerging country."

Wen and his Greek counterpart George Papandreou said in a joint statement the world's nations need to coordinate economic policies for global recovery to find a sure footing. "Global economic recovery is a journey with many turns and a full exit from it requires joint efforts," Wen said yesterday. He made no comments on the yuan. On Saturday he said he was willing to work with the EU to confront the financial crisis and reform the international financial system.

He said he was confident Greece was on track to exit a debt crisis that shook the euro and said China wanted to boost cooperation with Greece, which faces its worst recession in decades.

"Greece is China's best friend in the EU," Wen said at a meeting with Greek opposition leader Antonis Samaras. Bilateral trade volume should double to $8 billion euros a year in 2015 with Greek traditional exports, such as olive oil, increasing.

"A few months ago, [we] signed an agreement to purchase 290 tonnes of Greek olive oil," Wen said. "Last night, for the first time in my life, I dipped a bite of bread in olive oil. It tasted very good."

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China offers to buy Greek debt

Prime minister Wen Jiabao says his country will support Greece and rest of euro zone to overcome financial crisis. Last Modified: 03 Oct 2010 16:23 GMT http://www.youtube.com/v/ZN7DFPVz0qw Gerald Tan reports on the significance of China's proposal to buyout Greece's debt

China has offered to buy Greek government bonds, in a show of support for the country whose debt burden pushed the euro zone into a crisis. Wen Jiabao, the Chinese prime minister, made the offer on Saturday at the start of a two-day visit to Greece, his first stop in a European tour. During talks with George Papandreou, the Greek prime minister, Wen said China would double its trade ties with Greece over the next five years, underscoring Beijing's use of economic strength to win friends. "China will undertake a great effort to support euro zone countries and Greece to overcome the crisis," Wen said. In addition to seeing economic opportunities in Greece, China's support of a struggling European country may also help deflect international criticism of its trade policies and its refusal to let its yuan currency appreciate sharply. 'Full market status' Wen said during the visit that China will address European concerns over its investment rules and copyright violations, but wants the EU to relax remaining trade barriers with Beijing in return. Speaking at Greece's parliament, he urged the EU to recognise China's "full market economy status" and relax restrictions on high-tech exports. "I have repeatedly said that China supports a strong euro and will not reduce the number of European bond holdings from its foreign exchange reserves," he said. Wen sought to ease European concern that overseas companies operating in China face licensing rule restraints that give local competitors an unfair advantage. He said China would "strengthen dialogue" with the EU and was committed to continue "improving investment, confronting issues of intellectual copyright protection, expanding bilateral commerce and upgrading cooperation in technology." Wen did not specify how much Greek debt China would be willing to buy or which Chinese entities would buy the bonds. Chinese state entities have been generally conservative about investing in foreign financial markets and the Chinese government faces domestic political criticism over losses incurred by these entities during the global financial crisis. China has a lot to gain from getting a foothold into Europe, Vagelis Agapitos, an economist in Athens specialising in investment, said. "They [China] get a bargain in terms of buying into strategic industries, such as the port authorities, the railways and the logistic centre, which is important for the export of Chinese goods," Agapitos told Al Jazeera. High borrowing cost A senior Greek government official said Wen made clear his offer concerned buying bonds only when the country returned to markets. Greece, which is currently funded through a 110 billion euro ($150 billion) EU/IMF bailout, is only issuing short-term treasury bills for the time being. Since the true scale of its debt burden emerged late last year, investors have shunned its bonds. The yield they demand to hold 10-year Greek debt has shot up to 10 per cent, compared with just 2.3 per cent for similar bonds from the euro zone's biggest economy Germany, making it too expensive for Greece to seek long-term funding in international markets. It has said it wants to return to markets some time next year to sell longer-term debt. "There is domestic pressure [in Greece] not to sell itself cheaply, but there is also quite significant international pressure regarding the total debt, which is at 120 per cent of the GDP, and rising," Agapitos said. "This needs to go down in order to avoid debt restructuring which would be disastrous, not only for Greece but also for the European Union as a whole," he said. China, at loggerheads with the US over the yuan and likely to face similar complaints during this European tour, emphasised its willingness to co-operate with the 27-nation EU on financial issues. "China is prepared, hand in hand with the EU, as passengers in the same boat, to strengthen co-operation ... to confront the financial crisis," Wen said. "I believe that we can undertake a genuine effort to promote the reform of the international financial system and strengthen its supervision," he said.

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China Bashers Pass Buck on What’s Ailing U.S.

By Kevin Hassett

'Blaming China is fun for the political and intellectual elites because it allows them to ignore their own failures'

 

Oct. 4 (Bloomberg) -- China bashing is all the rage in Washington, as politicians of both parties blame the world’s fastest-growing major economy for high jobless rates in the U.S.

Such a popular target is China that the U.S. House of Representatives, all but paralyzed by the prospect of next month’s election, easily passed a bill last week that might impose tariffs on China in retaliation for currency manipulation.

Blaming China is fun for the political and intellectual elites because it allows them to ignore their own failures. Gridlocked politicians on both sides of the aisle are equally attracted to the claim. The problem with U.S. growth isn’t that we have an out-of-control government and the second-highest corporate tax rates on earth; it’s all China’s fault.

As political scapegoating goes, this is easy -- too easy. In truth, the impact on the U.S. economy of a change in Chinese currency policy could well be so small that it would be almost impossible to detect.

First consider the arguments of those who say the U.S. would see significant benefits from a more freely floating yuan.

C. Fred Bergsten of the Peterson Institute for International Economics testified in the House last month that “elimination of the Chinese misalignment would create about half a million U.S. jobs, mainly in manufacturing and with above-average wages, over the next couple of years.”

Toward Equilibrium

How to accomplish that? Bergsten estimates that an appreciation of about 25 percent against the dollar would be necessary to restore an equilibrium exchange rate. When he testified on Sept. 15, the yuan had risen at an annualized rate of only about 4 percent since June, when the Chinese government pledged more flexibility. The growth rate does seem to have increased since Sept. 15.

Bergsten recommends that the U.S. designate China as a “currency manipulator” and encourage other nations to apply pressure on China to change its policy. He also says the U.S. should engage in “countervailing currency intervention,” which means purchasing yuan to offset China’s dollar purchases.

There is a good deal of academic disagreement over the Bergsten analysis. Helmut Reisen, head of research at the OECD Development Center, part of the Organization for Economic Cooperation and Development, wrote in April that “it is far from assured” that an appreciation of the yuan would influence current account balances.

He added, “There is a clear political focus on the bilateral U.S.-Chinese trade balance, but bilateral imbalances are of no economic interest -- there are more than two countries in the world.”

Ripple Effects

Philip Levy, my colleague at the American Enterprise Institute, shares this view. The ripple effects throughout the trading world of a more flexible yuan could be enormous, diluting the specific impact on any one country, even if that country is the U.S.

If we buy fewer imports from China, we might just buy more from some other country. A sign that this effect might be important, Levy argues, is that even while Chinese imports into the U.S. have been surging, total Asian imports have been roughly constant. This suggests that at least part of the impact of a change in Chinese currency policy would be a tweak in U.S. trade with Malaysia or Japan.

Economist Ray Fair of Yale University attempted to account for ripple effects in a paper that analyzed the macroeconomic impact of Chinese revaluation.

“The estimated effects on U.S. output and employment are modest,” he wrote. “Positive effects on U.S. output from a decrease in imports from China are offset by negative effects on U.S. output from increased inflation and from a decrease in U.S. exports to China because of a Chinese contraction.”

History as Guide

History also is a guide. If changes in the exchange rate are truly a big deal, then the U.S. trade deficit with China should have decreased during the Chinese currency appreciation from 2005 to 2008. Instead, it grew.

Then there’s the question of scale.

Assume that starting in August 2008, when China’s last revaluation ended, U.S. imports from China started tracking those of Japan, another big Asian trading partner of the U.S. that does let its currency float. Under that scenario, imports from China this year would have been about $27 billion lower. In a $14 trillion economy, that is hardly enough to have much of an impact on jobs, especially if imports from other countries increase.

Economic policies with uncertain benefits can be defensible if they carry no cost. Bashing China has real costs: It might cause a trade war reminiscent of the one that put the world economy into a death spiral in the 1930s. And it definitely distracts attention from the need for government policies that directly help the U.S. economy and those looking for jobs.

So isn’t it time we left China alone?

(Kevin Hassett, director of economic-policy studies at the American Enterprise Institute, is a Bloomberg News columnist. He was an adviser to Republican Senator John McCain in the 2008 presidential election. The opinions expressed are his own.)

--Editors: Laurence Arnold, James Greiff
Click on “Send Comment” in the sidebar display to send a letter to the editor.
To contact the writer of this column: Kevin Hassett at khassett@bloomberg.net
To contact the editor responsible for this column: James Greiff at jgreiff@bloomberg.net

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