Gamification and Game Theory



What is Gamification?

Gamification is the application of game-design elements and game principles in non-game environments. Though those who developed the idea generally state that it is not directly tied to game theory, many of the concepts used in gamification are clearly modeled on ideas central to game theory. Essentially gamification is a set of activities and processes to solve problems by using or applying the characteristics of game elements. These elements may  include metrics, and algorithms. Over the last few decades there has been an increased interest in gamification in business.



Why is Gamification so Important in the 21st Century?

When used skillfully,  and effectively, gamification techniques can leverage people’s natural desires for socializing, learning, mastery, competition, achievement, status, self-expression, altruism, or closure. It may even  influence  their response to the framing of a situation as game or play. Early gamification strategies use rewards for players who accomplished desired tasks or competition to engage players.  Back then, types of rewards included points, achievement badges or levels, the filling of a progress bar, or providing the user with virtual currency. Making the rewards for accomplishing tasks visible to other players, or providing leader boards are ways of encouraging players to compete or in the best of environments, to  collaborate. In gamification, teammates, whether they are other real players or virtual non-player characters, can induce conflict, competition or cooperation. The latter can be fostered particularly by introducing teams, i.e., by creating defined groups of players that work together towards a shared objective.



One of the things that separates gamification from classical game theory is that while the latter focuses on rational and logical patterns of thought and behavior, gamification tends to be more holistic, creating a space for intuition, and non-linear elements. For within gamification models one is likely to encounter game design elements known as Meaningful stories.  Meaningful stories do not relate to the player’s performance as they might might in a game-based model.


Rather, in gamification the narrative context in which a gamified application can be embedded contextualizes activities and characters in the game, and gives them meaning beyond the mere quest for points and achievements. A story can be communicated by a game’s complex story lines typical of contemporary role-playing video games (e.g., The Elder Scrolls Series), or simply by title (e.g., WarCraft). Narrative contexts can be oriented towards real, non-game contexts, or act as analogies of real-world settings. The latter can enrich boring, barely stimulating contexts, and consequently, inspire and motivate players particularly if the story is in line with their personal interests. As such, stories are also an important part in gamification applications; as they can alter the meaning of real-world activities by adding a narrative ‘overlay’, e.g., being hunted by zombies while jogging, or being protected by an angel-magician.



If you saw the movie or read the book– The Big Short,  (Here is the trailer for the film –  you could see the importance of gamification in finance, in this case, in real estate investing. In the affiliate marketing world, gamification in marketing and the application of algorithms has been key to success. Of course there is philosophical musings about game theory and gamification; and then there is actionable gamification. They are clearly not the same. Of course it is easier to teach these ideas to children than to adults. That is why, today we have gamification in learning, gamification apps, gamification in the classroom, and gamification tools kahoot. With these tools the gamification of learning can make it easier for children to understand a concept and retain information related to what they have just learned.


Another approach to gamification is to make existing tasks feel more like games. Some techniques used in this approach include adding meaningful choice, on-boarding with a tutorial, increasing challenge, and adding narrative. Game design elements are the basic building blocks of gamification applications, and are often embedded in activities such as, sports betting, fantasy sports, and other group based social and competitive activities. Among these typical game design elements, are points, badges, leader-boards, performance graphs, meaningful stories, avatars, and teammates.



Using Gamification Performance Graphs

Performance graphs, which are often used in simulation or strategy games, provide information about the players’ performance compared to their preceding performance during a game. Thus, in contrast to leaderboards, performance graphs do not compare the player’s performance to other players, but instead, evaluate the player’s own performance over time. Unlike the social reference standard of leaderboards, performance graphs are based on an individual reference standard. By graphically displaying the player’s performance over a fixed period, they focus on improvements. Motivation theory postulates that this fosters mastery orientation, which is particularly beneficial to learning. These are all important elements in sports betting and fantasy sports. In more sophisticated models sports analytics of a more complex level may come  onto play.



Gamification has been applied to almost every aspect of life. An example of gamification in a business context, includes the U.S. Army, which uses the military simulator “America’s Army”; as a recruitment tool. Another example can be seen in the American education system. Students are ranked in their class based on their earned grade-point average (GPA), which is comparable to earning a high score in video games. Students may also receive incentives, such as an honorable mention on the dean’s list, the honor roll, and scholarships; which are equivalent to leveling-up a video game character or earning virtual currency, or tools that augment game success. Job application processes sometimes use gamification as a way to hire employees by assessing their suitability through questionnaires, mini games, and puzzles that simulate the actual work environment of that company.



Gamification has been widely applied in marketing, especially in affiliate marketing; (please see the offers at the end of this page),  something I am deeply involved in. Over 70% of Forbes Global 2000 companies surveyed back in 2013, said they planned to use gamification for the purposes of marketing and customer retention. For example, in November, 2011, Australian broadcast and online media partnership Yahoo!7, launched its Fango mobile app/SAP, which TV viewers use to interact with shows via techniques like check-ins and badges. Gamification has also been used in customer loyalty programs. In 2010, Starbucks gave custom Foursquare badges to people who checked in at multiple locations, and offered discounts to people who checked in most frequently at an individual store.  Gamification also has been used as a tool for customer engagement, and for encouraging desirable website usage behavior, which has been invaluable for affiliate marketers. Additionally, gamification is applicable to increasing engagement on sites built on social network services. On the programming question-and-answer site Stack Overflow, users receive points and/or badges for performing a variety of actions, including spreading links to questions and answers via Facebook and Twitter. A large number of different badges are available, and when a user’s reputation points exceed various thresholds, the user gains additional privileges, eventually including moderator privileges.



Gamification can be used for ideation (structured brainstorming to produce new ideas). A study at MIT Sloan found that ideation games helped participants generate more and better ideas, and compared it to gauging the influence of academic papers by the numbers of citations received in subsequent research.

Gamification commonly employs game design elements to improve user engagement, organizational productivity, flow, learning, crowdsourcing, employee recruitment and evaluation, ease of use, usefulness of systems, physical exercise, bodystorming, traffic violations, voter apathy, and more. A collection of research on gamification shows that a majority of studies on gamification find it has positive effects on individuals. However, individual and contextual differences exist.



You can learn much more about gamification by exploring my course

Game Theory from A to Z and Beyond. 

If you’re interested in learning more about gamification as it relates to sports analytics and game theory,  or if you’re interested in the other domains of game theory, read my blogs on a regular basis, and please SUBSCRIBE BY CLICKING  any of the three links below: Winning at Sports Betting, How to Increasing Jumping Ability or Winning at Fantasy Sports.

Winning at Sports Betting – click here:

How to Increasing Jumping Ability – a click here

Winning at Fantasy Sports – a click here

Please share these ideas with your children. Many experts on early child development and peak performance have begun to study how teaching your child game theory can be used make your kid good at anything.

In conclusion, remember that game theory in peak performance can offer the greatest benefits at the lowest possible cost by reducing risk. Game theory is a perfect tool to take your life-game to the next level. In my wellness coaching work I have often turned for information to Your peak performance guide: a spotlight on wellness | London Business School


Lewis Harrison is a professional Business, Success, and Life Coach. The author of over 20 books on game-based thinking, he teaches his proprietary approach to gamification and creating winning strategies, Harrison’s Applied Game Theory in seminars, workshops, and speeches throughout the world.

Lewis can be contacted at:

3 Responses to Gamification and Game Theory

  1. Sunil Kapila says:

    I would be keen to get started on this new career and lead a life of joy and freedom


    Sunil kapila

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