Munich Risk and Insurance Center

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Project 3: Assessing Risk in the Digital World: Evidence from Mobile Video Games

Contact: Dennis Strümpel, Johannes Jaspersen, Andreas Richter

In the wake of digitization, products, processes and services need to satisfy the requirements of an increasingly digital world. New business models that charge their customers no monetary fee, but instead monetize on customer data and ad services, raise concerns about transparency and privacy issues which might be attributed to asymmetric information between providers and consumers of digital goods. On the contrary, digital applications like 2016’s Pokémon Go indicate the potential of rewarding analog actions with digital rewards. These could be used to foster more active lifestyles and counteract health problems like obesity.
With this research project we aim to analyze how individuals assess risks digitally. In this regard, we perform a series of behavioral experiments which will be implemented into a simple mobile video game. The first experiment aims to analyze the privacy concerns of mobile app users and their valuation of different types of data. The second experiment will test if digital applications can incentivize more active lifestyles by offering digital rewards for physical activities. In this regard, we also analyze the duration of potential effects to allow for temporary and long term effects (e.g. habit formation).