Event-Driven Economic Behavior in Virtual Economies: Evidence from Hypixel Skyblock

The sunk cost effect in pigeons and people: A case of within-trials contrast?

There is a wide literature that temporary shocks in real exchange rates and volatility will cause structural breaks in foreign trade. As a result of temporary shocks in real exchange rates, the real exchange rate elasticity of imports decreases. The decrease in the sensitivity of the import volume to real exchange rates and the failure to return to its former levels after the temporary shock is expressed as the hysteresis situation. In case the exchange rates return to their previous levels after the temporary shock, the main dynamic of hysteresis is that the firms exhibit the behavior of staying in the market due to sunk costs. In the study, foreign trade flows in the Turkish economy were analyzed for the period 2003Q1-2021Q2 by using the asymmetry hypothesis in order to test the hysteresis effects. According to the findings obtained from the asymmetry hypothesis, the absence of a decrease in the import volume during the period of depreciation of the domestic currency indicates the existence of the hysteresis effect. The fact that the firms exhibited the behavior of staying in the market in exchange rate depreciation in the Turkish economy means that sunk costs are extremely effective in hysteresis. Based on this information, as a solution to the hysteresis effects in foreign trade flows in the Turkish economy at the point of policymaking, reducing the sunk costs in market entry to reasonable levels and ensuring stability in exchange rates come to the fore as suggestions in terms of hysteresis.

Hysteresis means literally “that which comes later,” being derived from the Greek verb ύστερέω. Thus, hysteresis effects, generally defined, are those that persist after the initial causes giving rise to the effects are removed.During the course of the 1980s, it became increasingly fashionable to invoke hysteresis effects to explain economic phenomena. Two of the main areas of application were to unemployment and international trade. In the case of unemployment, distinctive features of labor markets, such as social norms that rule out wage-cutting in the face of rising unemployment, imply that “increases in unemployment have a direct impact on the ‘natural’ rate of unemployment” (Blanchard and Summers, 1988, p. 15). The implication for macroeconomic systems is that “temporary shocks can have a permanent effect on the level of employment” (Ibid., p. 307). In the case of international trade, hysteresis effects arise from the industrial economics of sunk costs: “the argument is that firms must incur sunk costs to enter new markets, and cannot recoup these costs if they exit.… thus foreign firms that entered the U.S. market when the dollar was high do not abandon their sunk cost investments when the dollar falls.” The implication for trade flows is “an effect which persists after the cause that brought it about has been removed” (Dixit, 1989, p. 205).

This paper offers a unified framework to analyze both short- and long-run trade dynamics in a consistent manner. It explains “the international elasticity puzzle”, a low trade elasticity against temporary shocks and a high trade elasticity against permanent shocks, studied in Ruhl (2008). The model in this paper extends the idea of export sunk costs and uncertainty to more general productivity shock processes by embedding the classical theory of “export hysteresis” into a continuous-time trade model with heterogeneous firms, and considers the effects of both aggregate and idiosyncratic productivity shocks. A sharp analytical characterization of the equilibrium elucidates the microfoundations of trade dynamics linking a static trade model with heterogeneous firms and an international macroeconomic model. Due to the sunk costs and uncertainty, firms do not change their export status against small temporary shocks. Aggregate productivity shocks and export sunk costs explain the elasticity puzzle because of the different adjustments on the extensive margin. If the productivity shocks are idiosyncratic, the economy is in a steady state, with individual firms moving around within a stationary distribution of productivities. Export hysteresis gives rise to a region of firm productivity where both exporters and non-exporters coexist given the same current productivity. The full model incorporates both types of shocks and offers realistic microfoundations of trade dynamics including simultaneous export entry and exit, an evolving productivity density of exporters, and the sluggish trade response to aggregate shocks.

The article examines the determinants of the functioning of the virtual economy, examines the role and principles of virtual enterprises, the authors attempt to describe graphical specification of the transition of the actual economy into the virtual one, and review the agents of the virtual economy. Attention is focused on the post-industrial society, specifics of the informatization of the public life, partial (or full) virtualization of economic activity of the enterprises of regions of the Russian Federation. Some economists criticize the idea, while other researchers talk about the positive effect of the virtual economy. Neither of these, the third ones state that the virtual economy represents the most advanced stage of development of capitalism. The article examines the conditions of formatting and developing of the virtual economy: information, knowledge, and the ways of its transmission. The present treatise highlights the role of virtual organization. The conclusion is that these days the category of "virtual economy" is being intensified in almost all spheres of society and giving rise to new phenomena of the development of the person`s virtual activity, social and economic changes, spatially localized and virtual economic systems. DOI: 10.5901/mjss.2015.v6n3s6p247

The importance of sunk costs in economic decision making is a major source of disagreement between neoclassical and behavioral economists. We provide a direct test of the role played by sunk costs using evidence from the National Basketball Association. Because teams have a greater financial and psychic stake in players chosen in the lottery portion of the draft and in the draft’s first round, behavioral economists predict that teams are more committed to them than to players selected later in the draft and give these players more playing time. Neoclassical economists would assert that current performance should be all that matters when allocating playing time. Our study builds on previous studies in two ways. First, we use a more appropriate data set than earlier studies, one that captures total available playing time more accurately than previous studies by accounting for time lost due to injury, suspension, and other exogenous factors. Second and more importantly, we use a more appropriate estimation technique --- regression discontinuity (RD) --- to show how behavior changes when a player's draft position crosses the threshold between lottery and non-lottery or first- and second-round status. Our RD estimates provide little evidence that teams allocate more playing time to more highly-drafted players than to otherwise identical teammates. We conclude that the neoclassical model more appropriately captures behavior.

ABSTRACT- Purpose This research looks at the relationship between gamer roles, motivations, and their association with problematic gaming. Particularly, attitudes, flow, and sunk cost were explored within EA Sport’s FIFA, a popular eSports video game that features loot boxes. Loot boxes are purchases made within video games that yield random in-game items, akin to gambling. eSports are popular video games that have attracted fandom, spectators, and audiences often streamed online. Design/methodology This study conducted an online survey (n = 200) of FIFA gamers. Participants were screened to ensure they played FIFA’s Ultimate Teams game mode which features the predominant use of loot boxes. Findings Attitudes and flow predicted problematic gaming. Sunk cost was also found to be highly associated with problematic gaming. Importantly, two emergent gaming roles (manager and trader) were explored and discussed in this study. These roles that gamers adopt within the game are defined by gamer motivations. This provides knowledge regarding the impact of loot boxes and its association with problematic gaming. Practical implications The findings from this research suggest that the gamer roles of trader and manager in FIFA are dynamic, such that sunk cost is greater for those that lean more toward trading, which is associated with problematic gaming. Additionally, games like FIFA as an eSport may create a sense of normalcy for competitive online games that utilize gambling style mechanics.

The digital gaming business has changed in the last years. Digital games are no longer just products. They developed into services. People play games not only on a stationary device, but on mobile devices, too. The change of gaming devices also had an impact on game design. Competition between mobile digital games mostly takes place at a download price of zero. Today the Freemium monetization method is the dominant monetization method. Players of digital games often have to go through a core loop by repeating the same tasks inside the game. The stability of the virtual economy inside the game affects the game’s core loop. This paper discusses the role of instability in virtual economies in the context of core loops. A small instability inside a virtual economy can increase revenue of a digital game. Players tend to stay in a game because of sunk cost fallacy. If instability inside a virtual economy happens for a too long time players will quit playing and revenue will decrease.

The biomedical and pharmaceutical industry, being intrinsically tied to human life and health security, currently demonstrates a development paradigm predominantly propelled by biopharmaceutical innovation and cross-disciplinary technological convergence, with sustained growth in Research and Development (R&D) investment intensity observed across the sector. To sustain competitive dominance in the marketplace, enterprises must continuously allocate substantial capital towards pioneering technologies and next-generation product development. However, the substantial allocation of funds to R&D inevitably triggers the sunk cost effect, exerting measurable impacts on corporate profitability. This aspect of the issue has not yet been comprehensively analyzed or thoroughly studied within academic and industry research frameworks. Based on this background, this article will partially supplement the research gaps in this area by combining relevant data. Based on biomedical and pharmaceutical enterprises, this article analyzes the impact of R&D intensity on financial risk and R&D intensity on asset utilization, and summarizes the relationship between R&D intensity and corporate profits. The findings reveal that there is an inverse relationship between R&D intensity and Debt-to-Asset Ratio, a coexistence of high R&D intensity with low Total Asset Turnover, and a nonlinear (roughly inverted U-shaped) correlation between R&D intensity and ROE. Contemporary biomedical and pharmaceutical enterprises are also roughly divided into two categories according to the effect of sunk costs: innovative biomedical and pharmaceutical firms and generic biomedical and pharmaceutical firms.

With the rise of digital entertainment, the phenomenon of GACHA in games has become increasingly common, attracting widespread social attention. GACHA games are a form of non-transparent sales where players purchase chances to randomly obtain in-game items or characters. This mechanism has been widely applied in many online video games, especially in free-to-play games, where it is designed to encourage in-game purchases. This paper aims to explore the inducing traps of GACHA mechanisms and their impact on the game market and player behavior. Through literature review, the social issues and industry development issues caused by GACHA in games are analyzed, pointing out that existing studies have mainly focused on game quality and player motivation, while neglecting the inducing traps in game design. This paper adopts case study methods, selects two popular games, "Genshin Impact" and "Honor of Kings," and deeply analyzes their GACHA mechanisms. Combined with interviews with senior game designers, it reveals how game developers induce players to GACHA through means such as the "foot-in-the-door effect," sunk costs, recharge exchange ratios, increasing secondary game content, and strengthening social status after recharging. The study points out that GACHA mechanisms not only lead game companies into a low-quality internal competition but also may trigger players' excessive consumption behavior. The article finally suggests that through policy restrictions and market self-adjustment, it is expected to guide the game industry towards healthy competition and promote healthy development.

The permanent effects of temporary shocks in exchange rates on foreign trade flows are defined as hysteresis. In this study, hysteresis is analyzed on the basis of exchange rate and import relationship. Empirical findings point to the validity of hysteresis in the Turkish economy. Sunk costs are the main dynamics of hysteresis in the Turkish economy. As a matter of fact, hysteresis effects caused by sunk costs are determinant in the sustainability of the current account deficit.

Studying human behavior in response to large-scale catastrophic events, particularly how moral challenges would be undertaken under extreme conditions, is an important preoccupation for contemporary scientists and decision leaders. However, researching this issue was hindered by the lack of readily available models. Immersive virtual worlds could represent a solution, by providing ways to test human behavior in controlled life-threatening situations. Using a massively multi-player zombie apocalypse setting, we analysed spontaneously reported feelings of guilt following ethically questionable actions related to survival. The occurrence and magnitude of guilt depended on the nature of the consequences of the action. Furthermore, feelings of guilt predicted long-lasting changes in behavior, displayed as compensatory actions. Finally, actions inflicting immediate harm to others appeared mostly prompted by panic and were more commonly regretted. Thus, extreme conditions trigger a reduction of the impact of ethical norms in decision making, although awareness of ethicality is retained to a surprising extent.

We analyze the role of both permanent and temporary factors in affecting the Indonesian current account and real exchange dynamics before and after 2000. Adopting Lee and Chinn (1998; 2006) approach as well as Chinn et al. (2007), two results stand out. First, we confirm that the behavior of the real exchange rate has altered since 2000. Identifications show that permanent shocks are the primary causes for the movement of the real exchange rate after 2000, while in the period before 2000, the Indonesian real exchange rate changes are characterized by greater dominance of temporary shocks. The apparent change in the real exchange rate behavior may be strongly justified by the implementation of free-floating exchange rate system since August 1997. Second, the shift of the real exchange rate behavior after 2000 does not necessarily affect the current account dynamics. Empirical evidence confirms that the variance of current account post 2000 remains largely due to temporary shocks. Albeit having increasing influence, permanent shocks have insignificant effect in explaining fluctuations of the current account. In this sense, the current account surplus after 2000 is attributed largely to nominal variables such as price increase, while the impact of productivity improvement is still limited.Keywords: Current Account; Real Exchange Rate; Asian Crises 1997/1998AbstrakKami menganalisa peranan faktor permanen dan temporer dalam memengaruhi neraca berjalan dan dinamika nilai tukar mata uang riil Indonesia sebelum dan setelah tahun 2000. Mengadopsi pendekatan Lee dan Chinn (1998; 2006) serta Chinn et al. (2007), telah diperoleh dua kesimpulan. Pertama, kami mengonfirmasi bahwa pola nilai tukar mata uang riil telah berubah sejak tahun 2000. Identifikasi menunjukkan bahwa shock permanen adalah penyebab utama pergerakan nilai tukar mata uang riil setelah tahun 2000, sedangkan di periode sebelum tahun 2000 perubahan nilai tukar mata uang riil dicirikan oleh dominansi shock temporer. Perubahan pola nilai tukar mata uang tersebut dapat berakar dari penerapan sistem nilai tukar mengambang bebas sejak Agustus 1997. Kedua, perubahan pola nilai tukar mata uang setelah tahun 2000 tidak serta merta memengaruhi dinamika neraca berjalan. Bukti empiris mengonfirmasi bahwa variansi neraca berjalan setelah tahun 2000 tetap disebabkan utamanya oleh shock temporer. Meskipun menunjukkan peningkatan pengaruh, shock permanen memiliki pengaruh yang tidak signifikan dalam menjelaskan fluktuasi neraca berjalan. Atau dalam kata lain, surplus neraca berjalan setelah tahun 2000 dapat diatribusikan kepada variabel nominal seperti kenaikan harga, sedangkan pengaruh peningkatan produktivitas masih cenderung terbatas.Kata kunci: Neraca Transaksi Berjalan; Nilai Tukar Riil; Krisis Asia 1997/1998JEL classifications: F31; F41

Current Account and Real Exchange Rate Dynamics in Indonesia

Effectiveness of using visual approaches in health education and its influential factors were still in debate. This study aimed to asess the effects of visualized nutrition education on dietary knowledge and behavioral changes, and factors influencing them. A comprehensive search of PubMed, EMBASE, Scopus, and Cochrane Library was conducted. Eligible studies were trials assessed effects of visualized nutrition education on dietary knowledge or behavior changes, compared with non-visualized or no education group. Fourteen studies (n = 7,259) were qualitatively analyzed and 7 of them were included in the meta-analysis. We found a higher fiber intake in both short term (1.59 g/1000 kcals, 95% CI 0.90–2.27) and long term (1.36 g/1000 kcals, 95% CI 0.64–2.09). A marginal advantage was shown in short-term fruits and vegetables consumption (F&V consumption) (standardized mean difference [SMD] = 0.08, 95% CI −0.00 to 0.16). The education effects were more pronounced when education was delivered in series (SMDF&V consumption = 0.09, 95% CI 0.00–0.17), avoiding loss-framing (SMDFat intake = 0.31, 95% CI 0.10–0.51) and video modeling (SMDF&V consumption = 0.23, 95% CI 0.03–0.43), with short length plus cultural adaptation. Visualized nutrition education was overall promising in improving dietary behaviors. Delivering in series, short in length, with cultural adaptation were features tended to enlarge the benefits of visualized education while loss-framing and video modeling might be avoided.