Gaming the System

Jim Wasserman

I’M AN AVID PLAYER of video and computer games—along with 150 million other Americans. They’ve been a nice occasional escape from the pressures and obligations of the real world for more than 40 years and, now well into my 50s, I’m old enough to see them as merely that.

Youth, on the other hand, is more susceptible to having their behavior influenced, if not shaped, by interactive entertainment. There’s much debate as to whether such games promote dissociative behavior and even violence. But few consider the economic habits reinforced by repeated gameplay.

One of the most popular forms of electronic gaming, and my favorite genre, is the role-playing game, or RPG. The basic format: You play a character—or avatar—who goes on quests. As you complete quests, vanquish baddies and so on, you accumulate in-game wealth, often in the form of coins or gold. You can then spend your wealth in cyber-villages or at vending machines to acquire upgraded armor, weapons, magical items and other accoutrements of the game. To the extent there are any banks in such villages, they’re little more than extra storage space for gold and gear.

There are positive economic lessons to be had. I’ve used such games in my economics classes to demonstrate concepts such as marginal utility (better to spend on offense or defense?) and scarcity of resources (how does one maximize the available space in one’s backpack?). True, there are often high-priced items in the cyber-shops that require you to amass gold if you’re to purchase them. But almost always, the best strategy—and the game’s financial message—can be summarized in two words: Spend now.

Even more insidious: Some games seek to extract real money from children. A controversial technique is “loot boxing,” where children pay perhaps $2 to $20 to a gaming company for the chance to win rare and special items that help players succeed. Many countries now regulate such promotions, because they encourage gambling in children. While there have been calls to “look into it” in the U.S., to date there’s been no concerted action taken.

It’s tempting to dismiss these “nudges” (as Nobel Laureate Richard Thaler would call them) toward spending as minor influences. But we need to remember that financial behaviors and habits are built up like stalagmites—one small drip at a time until it’s an immovable block. Coupled with other media that send a concerted message to spend, and given the lack of counter-messaging, it’s small wonder that consumption is rising, while personal savings are in decline. By the time banks and financial institutions start advertising to potential customers, the bad habits are already inculcated.

Currently, only 17 states require high school students to take a class in personal finance, and fewer than half require an economics course of any kind. There are great private initiatives, such as Tim Ranzetta’s Next Gen Personal Finance, but they’re relatively few in number. The fact is, few educational systems, public or private, have a consistent, incorporated course of study on basic finance, the psychology of economic decision-making, or how to decode and respond to media messaging about financial issues. Kids are told to “follow their passion.” But how do you generate the income needed to support that passion? Good luck getting an answer to that question from today’s educational system.

What should parents do? You might ask your children to describe the economics of the video game they’re playing and whether they think it applies to real life. Better still, consider setting up a financial “game” with your children, where you research savings and investment opportunities. Your children have probably researched gaming advice in online forums. Let them show you how they can use those same internet research skills in real world finance. True, your real-world finance game will never allow your children to slay a dragon. But helping your children to earn real money—rather than just cyber-gold—can be a pretty big thrill, and it may nudge them toward better financial habits.

Jim Wasserman is a former business litigation attorney who taught economics and humanities for 20 years. He has published articles on education, law and media literacy. Media, Marketing, and Me, Jim’s three-book series on teaching behavioral economics and media literacy, will be published in early 2019. Jim lives in Granada, Spain, with his wife and fellow HumbleDollar contributor, Jiab. Together, they write a blog on retirement, finance and living abroad at

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