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Andrea Langer-Ballion

Article “What Drives Demand for Loot Boxes? An Experimental Study” has been accepted for publication in the Journal of Economic Behavior & Organization

This study by Markus Dertwinkel-Kalt with Simon Cordes, University of Bonn, and Tobias Werner, Max Planck Institute for Human Development, examines the effects of common loot boxes and shows that they can lead to excessive spending. Loot boxes, digital lotteries with randomized rewards often used in video games, are widely used in the gaming industry and resemble games of chance. In an experiment, we analyze the effects of two central features of loot boxes, namely censored winning probabilities and selective feedback, where only particularly good results of other players are highlighted. Our results show that these features can increase players' willingness to pay by up to 100 %. These findings underline the need for regulation of loot boxes to protect consumers from overspending.