Incentives, Gamification, and Game Theory: An Economic Approach to Badge Design

Easley, D., & Ghosh, A. (2016). Incentives, Gamification, and Game Theory: An Economic Approach to Badge Design. ACM Transactions on Economics and Computation, 4(3), 1–26. https://doi.org/10.1145/2910575.

This source was looking at how the use of badges can encourage participation in on-line tools. Rather than studying a group of individuals that received badges, the paper was looking at various on-line tools that already are using badges, and examining how individuals responded to them. Badges served to increase engagement the most if the badges were limited, either by only giving it out to a set number of individuals (top 10 lists) or if the badges are based on a percentage of the population, it should be balanced to create a zero sum situation.

• Badges work most efficiently when they are limited in their use. This can be from making them more difficult to obtain, or by giving out only a few of the badges to individuals. By making the resource more scarce, it tends to make people want it more, thus encouraging more participation with the material.
• How to display the badges also has an impact on how individuals perceive the value of the badges. When badges are rarer, they should be displayed more explicitly with the calculation of how to earn the badge very prominently along with who has it, while if the badge is more common, then it should be primarily displayed directly tied to the user’s profile rather than in one central location. This second method is very similar to how most video games display achievements, where they are only displayed on the player’s account rather than having a large leaderboard showing how much has been earned.

This is a resource showing how game theory has been applied to build a system. By looking at the different badges that are available, and seeing what needs to be done to earn them, people can change their own actions. But in order to earn the badge because of the scarcity of it, the players have to consider the actions of other players so they can ensure they are in the very small group to earn the badge.