Research

Abstract.

Loot boxes are digital containers of randomised rewards commonly found in video games and mobile apps. Loot boxes are especially common in free-to-play games, a videogame genre popular among adolescents and young adults. Recently, scholars examined the mechanism behind loot boxes due to their potential negative impact on consumers. For example, scholars suggested that loot boxes may distort the economic behaviour of the average consumer and thus be considered a form of unfair practice. This study examines the role of virtual currencies, money illusion, and non-intuitive exchange rates on consumers' spending behaviour for online transactions involving risk and ambiguity in an incentivised randomised controlled trial on UK citizens. We find that virtual currencies under fixed exchange rate induce subjects to increase spending, contributing to the debate on the neutrality of virtual currencies and experimental currency units. Moreover, when the nominal value of a virtual currency is higher than its real value, subjects reduce their willingness to pay and become more sensitive to risk and ambiguity. Lastly, the use of non-intuitive exchange rates further reduces the willingness to pay of our subjects (non significantly though). Based on our findings, we recommend policymakers not to underestimate the impact of virtual currencies in the online gaming sector. Finally, we suggest that video game developers support the use of real-world currencies in loot box transactions to enhance transparency and consumer understanding. 

Abstract.

Emergency room (ER) overcrowding is an urgent issue in healthcare. This study examines whether real-time information on ER congestion affects individuals’ choices. We model decisions under uncertainty about health status to formalize expected behavioral responses and test these predictions in an online incentivized experiment with a between-subject design. In our setting, when hypothetical patients must choose where to be treated, we observe that real-time congestion data increase visits, particularly for less urgent cases, suggesting that reduced uncertainty encourages riskaverse individuals to choose the ER more often, potentially worsening overcrowding. As an alternative, coarsening information at intermediate congestion levels reduces inappropriate visits while preserving the benefits of transparency. Finally, when decisions are made on behalf of others, such as pediatric cases, participants are more cautious and visit the ER more frequently. These findings highlight the role of uncertainty in shaping ER demand and the potential role of information design in managing overcrowding.