Contextual advertising in games: Impacts of game context on a player’s memory and evaluation of brands in video games

Contextual advertising is growing in digital marketing communication. Previous research on traditional media has shown that the surrounding context affects advertising effectiveness. Similarly, the context in a game may influence a player’s processing of brands advertised in that game. To examine the effects of contextual advertising in games, the present article affords two independent experiments investigating how positive and negative game contexts influence players’ memories and attitudes with respect to brands advertised via billboards in games. Drawing from literature on the limited capacity model, the authors demonstrate that positive and negative game contexts decrease brand memory since they require a high level of cognitive effort. The authors also find that varying a game context influence the perception of brands advertised in the game via the contextual priming mechanism and that positive contexts generate more positive brand attitudes than negative or neutral contexts. The findings have important implications for consumer researchers and marketers, as they indicate how contexts in games can be utilized to establish brand awareness and increase positive brand perceptions in contextual advertising using games.     

Brand placements in video games: How local in-game experiences influence brand attitudes

Brand placements are omnipresent in video games, but their overall effect on brand attitudes is small and varies substantially between studies. The present research takes an evaluative conditioning perspective to explain when and how brand placements in video games influence brand attitudes. In two experiments with a 3D first-person video game, we show that only brands encountered during positive in-game experiences benefit from the placement, but not those encountered during negative in-game experiences. Building on the cognitive processes underlying evaluative conditioning, we also show that brand attitudes largely depend on the memory for the pairing of a brand with positive/negative in-game experiences. Pairing memory and thus also evaluative conditioning effects increase when players attend to the pairing of brands and positive/negative experiences, for example, when such pairings are a central part of the game's storyline. Overall, our findings show that evaluative conditioning and its cognitive mechanisms can be utilized to explain and predict advertising effects in applied settings, such as brand placements in video games.     

The Effect of Stake Size in Experimental Bargaining and Distribution Games: A Survey

We review the literature on bargaining and distribution experiments to investigate whether changes in stake size have significant effects on behaviour in laboratory/field settings. We conclude that experiments in this field do not lead to clear/common results. The joint presence of opposing factors (e.g., increasing relative risk aversion and increasing cost of fairness) might be one reason contributing to this. Moreover, we argue that variables such as subjects’ financial conditions, cognitive abilities, risk attitudes, loss-aversion, justice orientations, and relevant personality characteristics should be controlled in laboratory experiments to understand the effect of stake size on behaviour, more clearly. Finally, quasi-experiments using data from (very) high-stake games/events and meta-analysis studies should complement (individual) controlled experiments.     

The (Negligible) Benefit of Moving First: Efficiency and Equity in Principal-Agent Negotiations

Like the first-mover in an ultimatum game, the principal is a first-mover with foreknowledge of the agent’s “rational” best response function. The solution to the “principal’s problem” is to choose a contract that maximizes the principal’s expected profit given the agent’s marginal efficacy and marginal effort cost. However, this paper reports experiments that show that principals make large concessions toward an equal division outcome. As in ultimatum games, agents are at times willing to punish principals who are perceived as being overly acquisitive. Variations in agent effort cost and effectiveness that should (theoretically) produce qualitatively different game-theoretic equilibria have little impact on outcomes.     

How Advergame Content Influences Explicit and Implicit Brand Attitudes: When Violence Spills Over

Well-liked advergames foster favorable brand attitudes. Research has been conducted on games where the content offers positive associations (e.g., racing: speed) that may transfer to the brand. Yet games may offer negative associations (e.g., combat: violence). Using the affect transfer and associative-propositional evaluation models, we test the influence of game content (combat, racing) on implicit and explicit brand attitudes. Results of an experiment showed that negative content resulted in less favorable attitudes toward the game and the implicit (unfamiliar) brand attitudes. The relationship between content and explicit attitude toward the brand was mediated by attitude toward the game.     

EVOLUTION IN IMPERFECT COMMITMENT BARGAINING—STRATEGIC VERSUS IGNORANT TYPES

To commit in bargaining is crucial: in the ultimatum game with its one‐sided commitment power the ‘proposer’ (almost) receives the whole pie while the ‘responder’ is left with (almost) nothing. When bargaining parties commit simultaneously the symmetric Nash (Econometrica, 1950, vol. 18, pp. 155–162) bargaining solution predicts equal shares. Continuously connecting these two games yields a one‐parameter family of games ( Fischer et al. , Experimental Economics, 2006, vol. 9, pp. 17–33) for which we distinguish two behavioral dispositions, namely (1) neglecting commitment power and (2) reacting to it strategically. Their pay‐off implications define the evolutionary set‐up for which we derive the evolutionarily stable behavioral disposition. Our analysis sheds light on the hypothesis that in experiments participants neglect strategic aspects such as commitment power.     

A New Axiomatization of the Banzhaf Index for Games with Abstention

(3, 2)-Simple games are a model for voting situation in which players can vote not only in favour or against a proposal but they can also abstain. Also in this model, power indices are used to evaluate the power of players. In particular, the Banzhaf index and the Shapley–Shubik index have been generalized to define analogous power indices in the context of games with abstention. In this work we provide a new axiomatization of the Banzhaf index for games with abstention, to underline its properties and increase the justification of the use of this index as a solution concept also in the family of games with abstention.     

Estimating discrete-choice games of incomplete information: Simple static examples

We investigate the computational aspect of estimating discrete-choice games under incomplete information. In these games, multiple equilibria can exist. Also, different values of structural parameters can result in different numbers of equilibria. Consequently, under maximum-likelihood estimation, the likelihood function is a discontinuous function of the structural parameters. We reformulate the maximum-likelihood estimation problem as a constrained optimization problem in the joint space of structural parameters and economic endogenous variables. Under this formulation, the objective function and structural equations are smooth functions. The constrained optimization approach does not require repeatedly solving the game or finding all the equilibria. We use two static-game models to demonstrate this approach, conducting Monte Carlo experiments to evaluate the finite-sample performance of the maximum-likelihood estimator, two-step estimators, and the nested pseudo-likelihood estimator.     

Understanding repeat playing behavior in casual games using a Bayesian data augmentation approach

With an estimated market size of nearly $18 billion in 2016, casual games (games played over social networks or mobile devices) have become increasingly popular. Because most casual games are free to install, understanding repeat playing behavior is important for game developers as it directly drives advertising revenue. Game developers are keenly interested in benchmarking their game versus the market average, and understanding how genre and various game mechanics drive repeat playing behavior. Such cross-sectional analysis, however, is difficult to conduct because individual-level data on competitors’ games are not publicly available, and that the casual gaming industry is highly fragmented with each firm making only a handful of games.I develop a Bayesian approach, based on a parsimonious Hidden Markov Model at the individual level in conjunction with data augmentation, to study repeat playing behavior using only publicly available data. After applying the proposed approach to a sample of 379 casual games, I find that the average daily attrition rate across game is around 36.5%, with an average “play” rate of 47.9%, resulting in an average ARPU (average revenue per user) across games of around 20.5 cents. Certain genres are linked to higher attrition rates and play rates. In addition, giving out a “daily bonus” or limiting the amount of time that gamers can play each day are associated with a 17.7% and 16.4% higher ARPU, respectively.     

Acceptability and Ethics of Product Placement in Sport Video Games

Product placement in sport video games is an emerging area of marketing and advertising communication, but it also raises controversial ethical issues. In order to investigate these issues from a consumer perspective, this study examines the perceptions of the acceptability of product placement in sport video games (SVGs). Data were gathered from 253 sport video gamers using an online survey. The results indicate that while sport video gamers generally have favorable attitudes toward product placement in sport video games, ethically-charged products such as alcohol, cigarettes, and guns are perceived as less acceptable than other products. Individual differences among sport video gamers are found based on their related attitudes, hours of playing sport video games, and gender. Also, sport video gamers who have favorable attitudes toward product placement, in general, are more likely to intend to purchase a product or brand which may be placed in sport video games.     

Play Buddies or Space Invaders? Players’ Attitudes Toward In-Game Advertising

This article investigates beliefs that players of digital games hold toward the practice of in-game advertising (IGA), referred to as “attitudes toward in-game advertising” (AttIGA). The hedonic nature of IGA is the strongest, positive predictor of AttIGA. Beliefs about IGA as a means to lower games’ prices contribute positively, and beliefs about fostering materialism contribute negatively to AttIGA. Further, the relative importance of the belief factors determining AttIGA relates to the playing frequency of role-playing games and racing games. The results contribute to theory building and practical considerations of digital games as an important yet underutilized advertising medium.     

Optimal tariffs on exhaustible resources

We characterize the Markov perfect equilibria of two games in which oligopsonistic importers of an exhaustible resource confront competitive suppliers who have rational expectations. The games differ only in the timing of moves, or the speed with which participants can adjust their plans. The optimal tariff when sellers move first (are less flexible) differs considerably from that in which buyers move first, and sellers retain more control over intertemporal arbitrage opportunities. If the initial stock is small, buyers suffer a disadvantage from being the first-mover; this is reversed if the stock is large.     

Children's Responses to Advertising in Social Games

This study explored children's (ages 9 through 12) level of persuasion knowledge and peer influence susceptibility concerning advertising in social games and investigated how these variables affect children's desire for the brands advertised in these games. Results showed that (1) children have a fairly good knowledge of the advertising in social games yet hold uncritical attitudes toward it and claim to be not very susceptible to peer influence; (2) the most important predictors of children's desire for the advertised brands are a low critical attitude and high peer influence susceptibility; and (3) recognition and understanding of advertising in social games is effective in reducing advertised brand desire only for children who are familiar with social games.     

Game theory in marketing science uses and limitations

This paper reviews some major concepts in game theory and indicates how they may apply to marketing science. The theory of games provides a framework for addressing problems of competitive strategies and of buyer-seller interactions. These issues are important in studying industrial markets where there are a small number of buyers as well as for studying how to incorporate knowledgeable, active competitors into consumer marketing mix models.Few marketers have seen much benefit in the past from developments in game theory. This is partly because of the historical preoccupation of game theorists with complete information, zero sum games. The richer area of games of incomplete information may have much more to offer the marketing scientist.In this paper we review how game-theoretic approaches (interactive models) differ from most previous approaches, which are optimizing and asymmetric. We then look at how these alternative approaches apply to two problem areas - competitive entry and bargaining. Then we review potential applications of game theory in marketing and the value of applying marketing science approaches in game theory. We conclude with a perspective on future developments in this field.     

Playing With Food: Content Analysis of Food Advergames

This study examines how food marketers use advergames, custom‐built and branded online games, to promote food products to children and provides the nutritional content of the food products featured in the advergames. The results reveal that food marketers use advergames heavily, with candy and gum or food products high in sugar most frequently appearing in the analyzed games. Children are often invited to “play with” the foods integrated as active game components. Finally, despite the educational benefits of interactive games, fewer than 3% of the games analyzed in this study appear to educate children about nutritional and health issues.     

Negotiating a Stable Government: An Application of Bargaining Theory to a Coalition Formation Model

In this paper, we apply bargaining theory to a certain model of coalition formation. The notions of a feasible government and a stable government are central in the model considered. By a government, we mean a pair consisting of a majority coalition and a policy supported by this coalition. The aim of this paper is to establish which stable government should be created if more than one stable government exists or, in case there is no stable one, which feasible government should be formed if more than one feasible government exists. Several bargaining procedures leading to the choice of one stable (or feasible) government are proposed. We define bargaining games in which only parties belonging to at least one stable (or feasible) government bargain over the creation of a government. We consider different bargaining costs. We investigate subgame perfect equilibria of the bargaining games defined. It turns out that the prospects of a party depend on the procedure applied, and on the bargaining costs assumed. We also apply the coalition formation model to the Polish Parliament after the 2001 elections and apply the different bargaining games for the creation of a government to this example.     

Promoting Persistent Strategic Reasoning Behavior: An Experimental Approach

The present research is aimed to apply experimental techniques to study strategic behavior in one-shot-hide-and-seek games as a frame to elicit more real and elaborated business situations. To promote strategic thinking and persistence, we conducted treatments with repeated matching games among strangers, and one of them with a fixed endowment (fixed initial payment that decreases each round an amount) with the possibility of abandon in any round, retaining the remaining of endowment. In fact, effortful strategic reasoning is found in deviation of subjects’ random choices along the repetitions and abandon, loss aversion, and cultural differences seem articulate a strategic behavior.     

A Hierarchy-of-Effects Approach to Designing a Social Marketing Game

While there is great enthusiasm and interest by social marketers for games as a social marketing intervention, there is little evidence of the impact of these games. This research seeks to fill this gap by testing a theoretical model based on the experiential hierarchy of effects. An online game about the physiological effects of drinking was designed for high-school students and implemented in an educational curriculum with 223 participants (96% response rate) completing an online survey. The data was analyzed using structural equation modeling (SEM) and showed support for nine of the eleven hypotheses. The results show game characteristics of enjoyment (feel), knowledge (learn), and challenge (do) significantly related to attitudes and moderate-drinking behavioral intentions, ability to control drinking, and awareness of the physical consequences of drinking. There were no gender differences.