Metaverse Design: 4 Game-Changing Behavioral Economics Principles

Metaverse Design: 4 Game-Changing Behavioral Economics Principles


metaverse behavioral science gaming

Did the title of this article throw you off? If so, that is because we rarely equate fun things with boring concepts.

metaverse, and virtual reality, one might not immediately connect these cutting-edge fields with the academic rigor of behavioral economics. However, the triumphs of games, VR, and the Metaverse are deeply rooted in scientific principles.

This article aims to bridge the gap between these seemingly disparate worlds. Drawing inspiration from behavioral science, which laid the foundation for the Octalysis framework with its 8 core drives of gamification, we present four pivotal behavioral economics principles. These insights will ensure your metaverse design is both scientifically sound and engaging.

Psychological Priming: The Power of the Unconscious Mind

About 80% of our identity is shaped by our primitive, instinctual “lizard brain,” which operates mostly under the radar of our conscious awareness. This part of our brain, while crucial for survival in the past, often misinterprets modern stimuli due to its evolutionary origins.

Psychological priming is a testament to this. It demonstrates how our brains, once exposed to a certain stimulus, tend to apply this initial impression to subsequent experiences. For instance, a study showed that students exposed to words associated with old age subsequently moved slower, a clear indication of how subtle cues can unconsciously shape behavior.

In the metaverse, this principle can be harnessed by carefully curating user experiences. Embedding stimuli within a compelling narrative (Core Drive 1) ensures they blend seamlessly into the virtual world, subtly influencing user behavior without overt intrusion.

Cognitive Ease: Familiarity Breeds Comfort

Our brains prefer the familiar, finding comfort in predictability.

Cognitive ease is a fundamental concept in understanding human behavior, particularly in how we interact with and perceive our environment. It revolves around the brain’s preference for things that are familiar, easy to understand, and predictable. This preference stems from our evolutionary past, where recognizing and sticking to known patterns and environments increased our chances of survival.

The Role of Familiarity

Familiarity plays a crucial role in cognitive ease. When we encounter something we’ve seen before, our brain processes it more effortlessly. This ease of processing not only makes the experience more comfortable but also imbues a sense of safety and trust. For instance, in marketing, repeated exposure to a brand or product makes it more recognizable and, therefore, more trustworthy in the eyes of consumers.

Impact on Learning and Comprehension

Cognitive ease also extends to learning and comprehension. Information presented in a clear, concise, and familiar format is more easily absorbed and retained. This is why educational materials often build upon prior knowledge and use familiar examples to illustrate new concepts. In the metaverse, this principle can be applied by designing interfaces and experiences that align with users’ existing knowledge and intuitive understandings, thereby reducing the learning curve and enhancing user engagement.

The Illusion of Truth Effect

A related phenomenon is the “illusion of truth” effect, where repeated exposure to a statement increases the likelihood of it being perceived as true. This effect underscores the power of familiarity in shaping our beliefs and perceptions, even in the absence of factual accuracy. In virtual environments, this can be leveraged to reinforce positive behaviors or beliefs through repeated messaging and thematic consistency.


Familiarity in User Experience Design

In the context of user experience design, especially within virtual environments like the metaverse, cognitive ease suggests that interfaces and interactions should be designed with familiarity in mind. This could mean using common design patterns, metaphors from the physical world, or established navigational schemas. The goal is to create an environment where users feel at ease, reducing cognitive load and allowing them to focus on the immersive experience.


Balancing Novelty and Familiarity

While familiarity breeds comfort, it’s important to balance it with elements of novelty to maintain engagement. A metaverse that is too familiar might become mundane, while one that is overly novel could be disorienting. The key is to introduce new concepts and experiences in a framework of familiar contexts, easing users into the unfamiliar while maintaining a base level of comfort.

 By integrating familiar elements within a meaningful storyline (Core Drive 1), the metaverse can leverage this bias to create a more immersive and appealing experience.


Endowment & Scarcity: Value of Ownership and Desire

Human behavior is heavily influenced by the endowment effect (overvaluing what we own, Core Drive 4) and the scarcity effect (overvaluing what we lack, Core Drive 6). These effects highlight our innate desire to avoid loss (Core Drive 8) and our complex relationship with ownership and desire. In the metaverse, these principles can be applied through the strategic use of virtual assets, like tokens or cryptocurrency. Creating a sense of ownership and potential loss can drive engagement and investment in the virtual world.

The Endowment and Scarcity Effects are two pivotal concepts in behavioral economics that significantly influence human behavior, particularly in the realms of ownership, value perception, and decision-making. Understanding these effects is crucial in designing engaging experiences in virtual environments like the metaverse.

The Endowment Effect: Overvaluing What We Own

The Endowment Effect is a cognitive bias where individuals ascribe more value to things merely because they own them. This effect is rooted in a sense of loss aversion; losing something we own feels more significant than the joy of acquiring something of equivalent value. In the context of the metaverse, this can be observed in how users interact with virtual possessions. For instance, virtual items or properties that users have earned or purchased in the metaverse are often perceived as more valuable than similar items that are not owned. This heightened sense of value can drive deeper engagement and attachment within the virtual world.

The Scarcity Effect: The Lure of the Unattainable

Conversely, the Scarcity Effect is based on the principle that items or opportunities perceived as scarce or limited are valued more highly. This effect plays on the basic human instinct of competition and survival – if something is rare, it must be worth pursuing. In virtual environments, this can be leveraged by creating limited edition items, exclusive access events, or time-bound opportunities. Such strategies can significantly boost user engagement and motivation, as users are driven to acquire or experience something that is perceived as rare or exclusive.

Interplay in Virtual Environments

The interplay of the Endowment and Scarcity Effects in virtual environments creates a dynamic landscape of motivation and engagement. For example, a metaverse might introduce a rare item that can be earned through specific achievements. The scarcity of the item drives users to pursue it, and once acquired, the endowment effect kicks in, increasing the item’s perceived value because it is now owned.

Psychological Ownership in Digital Spaces

In digital spaces like the metaverse, psychological ownership becomes a key factor. Users develop a sense of ownership over their avatars, virtual assets, and even spaces within the metaverse. This sense of ownership can be enhanced through customization options, personal achievements, and interactive narratives. The stronger the sense of ownership, the more significant the endowment effect, leading to a deeper emotional investment in the virtual world.

Balancing Scarcity and Accessibility

While leveraging scarcity can be effective, it’s important to balance it with accessibility. If items or experiences are too scarce, it can lead to frustration and disengagement. The challenge is to create a sense of rarity without alienating users who may feel left out. This balance can be achieved by offering a range of items and experiences, some scarce and others more accessible, catering to different user motivations and preferences.


The Cost of Zero Cost: The Paradox of Freebies

The concept of “The Cost of Zero Cost,” often referred to as the paradox of freebies, is a fascinating aspect of behavioral economics that plays a significant role in consumer behavior and decision-making. This principle explores the intriguing ways in which the allure of ‘free’ can impact our choices, often leading to irrational or unexpected outcomes.

Understanding the Allure of Free

At its core, the idea of getting something for free is incredibly appealing. The concept of ‘zero cost’ creates a psychological trigger that can often override rational assessment. In a world where cost and value are closely linked, something being free is an anomaly that draws attention and interest. This is particularly potent in virtual environments like the metaverse, where the introduction of free items or experiences can significantly drive user engagement and behavior.

The Irrationality of Free Choices

The paradox lies in how the allure of free can lead to choices that might not align with our best interests or intentions. For example, a person might choose a free item that they don’t particularly need or want, over a more useful item that comes at a small cost. In the context of the metaverse, users might flock to a free virtual event or collect free digital items, even if they hold no real value or interest to them, simply because they are free.

Impact on User Behavior in the Metaverse

In virtual environments, the cost of zero cost can be leveraged to guide user behavior. Offering free virtual goods, bonuses, or experiences can be a powerful tool for increasing user engagement, encouraging exploration, and driving traffic to specific areas of the metaverse. However, it’s important to strategically plan these free offerings to ensure they align with the overall objectives of the environment and do not lead to unintended consequences, such as overcrowding or diminished value perception of paid offerings.

Balancing Free with Value

While freebies can be a strong motivator, it’s crucial to balance them with a sense of value. If everything in a virtual environment is free, it can lead to a devaluation of the experience. Users might start perceiving the offerings as less valuable or lower quality. Therefore, it’s important to create a mix of free and paid experiences, where freebies serve as an entry point or teaser that leads to more substantial, premium experiences.

The Psychological Impact of Free

The cost of zero cost also plays into the psychological concept of scarcity and perceived value. When something is free, it can create a sense of urgency and scarcity, as users rush to take advantage of the offer before it disappears. This urgency can enhance the perceived value of the offering, even if its actual value is low.


In conclusion, while the application of behavioral economics to the metaverse and VR may seem unconventional, it is a potent tool for creating engaging and scientifically grounded virtual experiences. At Octalysis, we harness these principles within our renowned gamification framework, bringing depth and effectiveness to virtual world design.

So if you’d like to get it right the first time, contact us

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