Learn Economics From Pokemon Go

Hmm... apples? I was collecting oddishes
If the makers of Pokemon Go ever implement trading, it will instantly because an economics-heavy game, as a miniature economy will suddenly be established around trading pokemon. My friends and I have noticed that different pokemon are prevalent in different regions. Boston is Drowzee City. But I'd never seen a Pinsir until I visited my brother in Brooklyn. He, apparently, sees them so often that he doesn't bother to try to catch them anymore! If we could have traded, we'd have both gained some new pokemon from the deal. Mutual gains from trade, supply and demand, scarcity, comparative advantage - think of all the economics concepts we could learn.

I have noticed, though, there are still things we can learn about economics from Pokemon Go. Although there's no trading, there is still personal resource management. Here are the economics terms I've thought about while playing.


"Pokemon Go has really made me want to take more walks."

An incentive is a motivator that gets people to do what you want them to do. If you want people to work for you, for example, paying them in a huge incentive. You can use incentives on yourself; if you want to take more walks, the hope of getting pokemon might just be the extra incentive you need to get yourself off the couch. Of course, the makers of the game hope to incentivize you to spend money in their in-app store (or, at least, play and enjoy the game enough that you promote it to friends who may spend money in their in-app store).

Perverse Incentive

"I got Pokemon Go to take more walks, but it turns out I can access a pokestop from my house, so I just sit there spamming it and throwing down lures. I haven't left my apartment in three days."

Whether an incentive is effective  depends on what behavior you want to encourage. A perverse incentive is one that actually encourages the opposite behavior, making the problem worse.

Sunk Costs

"This dumb pokemon has escaped from 9 pokeballs. I don't care if it's a CP 15 Pidgey, I've already wasted those pokeballs so I might as well have something to show for it!"

Sunk costs refers to the pokeballs you already wasted. There's no getting them back. The sunk costs fallacy is feeling more committed to this course of action just because you've already sunk resources in it.  Logically, you should evaluate your willingness to make each throw based on your remaining pokeballs and your interest in getting this particular pokemon, without regard for what you have done previously. Whether you get that Pidgey in the next throw or not, you'll never get those tossed pokeballs back.

Opportunity Costs

"Ooh, a Venonat. Ooh, an Eevee. Ooh, a Rattata. Darn, I'm out of pokeballs… Augh! A Scyther! I've never seen one before! Why, oh why, didn't I reserve a few pokeballs?!"

"If I take the short path directly to the lurre, I'll have more time there,but if I take the long route along the bridge, I might catch a water pokemon."

"Yes! I finally caught the Vulpix! -- Hmm, what fox cub? There was just a baby fox cub here? I didn't see it because I was glued to my phone? Auugh!"

If you spend your limited resources in one way, you can't spend them in another way. The thing you gave up is the opportunity cost. We often choose to spend limited resources (time, money, pokeballs) on whatever shiny thing is in front of us, forgetting about the opportunity cost - all the other things we could do with that resource.


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