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Money illusion in free-to-play games

Author

Listed:
  • Benti, Behailu Shiferaw
  • Haß, Dominik
  • Stadtmann, Georg

Abstract

Regularly, free-to-play games use their own virtual currency for in-game store purchases. We analyze the money illusion phenomenon by examining free-to-playgames and their virtual currency exchange rate policies. We find that above pari exchange rates and advertising bonus packs instead of price discounts lead to money illusion on the side of the customer. Based on our findings, we derive managerial and policy implications.

Suggested Citation

  • Benti, Behailu Shiferaw & Haß, Dominik & Stadtmann, Georg, 2021. "Money illusion in free-to-play games," Discussion Papers 422, European University Viadrina Frankfurt (Oder), Department of Business Administration and Economics.
    • Handle: RePEc:zbw:euvwdp:422
    DOI: 10.11584/opus4-1028
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    References listed on IDEAS

    as
    1. Georg Stadtmann & Christian Pierdzioch & Timo Schöber, 2020. "Law of one price: BigMac versus Fortnite - A Note," Economics Bulletin, AccessEcon, vol. 40(4), pages 3338-3348.
    2. Lehdonvirta, Vili & Castronova, Edward, 2014. "Virtual Economies: Design and Analysis," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262027259, December.
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    4. Alford, Bruce L. & Biswas, Abhijit, 2002. "The effects of discount level, price consciousness and sale proneness on consumers' price perception and behavioral intention," Journal of Business Research, Elsevier, vol. 55(9), pages 775-783, September.
    5. Raghubir, Priya & Morwitz, Vicki G. & Santana, Shelle, 2012. "Europoly Money: How Do Tourists Convert Foreign Currencies to Make Spending Decisions?," Journal of Retailing, Elsevier, vol. 88(1), pages 7-19.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Money illusion; free-to-play games; virtual currency exchange rate; price incentives; bonus pack versus price discount;
    All these keywords.

    JEL classification:

    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection
    • L88 - Industrial Organization - - Industry Studies: Services - - - Government Policy
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising
    • Z28 - Other Special Topics - - Sports Economics - - - Policy

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