Redemption Education

Twisted Supreme October 20, 2008 0

Ever thought that playing redemption games could teach you anything? No? Me neither. But below is an interesting piece on how a parent has actually noticed the way there kids play redemption games, and how it can teach them how to invest thier money. It’s quite an interesting way to look at it, but one that seems obvious to me, now that it’s been pointed out.

[via Three Thinking Hats]

I mentioned in a previous post how I am teaching my eldest daughter about money, saving, and frugality using a “money jars” system. I have been looking for a good way to introduce the concept of investment, risk, and return to her but I realized yesterday that one of her favorite pastimes is providing her with a great introduction to the subject.

Every big mall in Indonesia, and pretty much all over Asia, has a video arcade. In Indonesia, the biggest chain of these arcades is called Timezone. A lot of the games give out tickets based on how well you have performed in the game. A large number of the games are games of chance, for example; the kind of game where you have to press a button that drops a ball into a spinning wheel of fortune which, depending where it falls, could either win you one ticket or one hundred. Some of the games are more skill or reaction time focused such as hitting moving crocodiles on the head with a mallet or metal fish with a magnetic fishing rod.

At the end of your session in the arcade, you can take your collected tickets and exchange them for toys and knick-knacks at the main desk. The more tickets, the nicer the gift. If you are feeling particularly frugal, you can save up your tickets over the months and go for a particularly large item (the biggest thing I ever saw being collected was a portable air conditioner for about 15,000 tickets which must have taken years to save up for). 

The fascinating thing to watch is how my daughters learn the likelihood of a good return from a particular game. It has some useful parallels to investment. For instance, they know from experience that they will earn 9 or 10 tickets from playing a basketball game. They’ve done it before and their skills are unlikely to have diminished. It is a low-risk investment.

 A purely luck-based game, however, might have a top prize of 500 tickets but a tiny likelihood of winning. The most likely outcome from such a game is only 1 ticket. It is a high risk investment.

 My daughters have a fairly high risk appetite and it is actually a lot of fun to watch them making investment decisions balancing their assets (20 coins to use in the machines), their financial goals (a minimum of 50/60 tickets covers some distracting little toys for the trip home), and their urge to win big and collect one of the enormous prizes from the top shelf. To meet these goals, they invest about half their coins in low-risk low-return games to generate the required “income” and half in high risk games in the hope of winning big.

 Now I come to think of it, they may have a healthier attitude to risk than me. My own investment strategy is the equivalent of playing the same low-risk basketball game with all twenty of my coins. Maybe I should be learning about investment from them.

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  1. Molloy October 21, 2008 at 10:57 am - Reply

    I had free access to slot machines by the time I was 6 or so. None of the arcades in my area were properly supervised. I only ever had a tiny bit of money so there was no way in hell I was going to gamble it. I just headed straight for the arcade machine that gave me the longest time per credit, assuming they hadn’t changed it because kids were getting too good at it.

    The redemption games in my area always had really crappy prizes so I never bothered much with them. Except perhaps coin pushers, because you couldn’t do much else with your 2ps and they’re a bit more ‘transparent’ than slot machines, which often decide you’ve lost before you even put the coin in.
    http://news.bbc.co.uk/1/hi/technology/2979142.stm

  2. SaraAB87 October 22, 2008 at 12:23 am - Reply

    I think most people realized something similar when they played Dragon’s Lair for the first time since it forced you to put in 2 quarters instead of one, and since most people lost instantly, they moved onto one of the tried and true classics that would last a bit longer than a few seconds.

    You need more than just a tiny amount to get anything out of redemption games nowadays though, they used to have 1-2 ticket prizes which got you some candy but they don’t have that in most arcades anymore so your looking at, at least 20 tickets for a small trinket now.

    The prizes were enough in the 80s to satisfy me but I quickly learned when I was old enough that it wasn’t that much fun to be blowing money (it was ok when I was like 6 years old). I came around faster than my friends who liked to blow money at carnival games and on redemption games while I stood there and watched. I was also taught to save early as I had my own bank account at about age 8. I actually thought arcade games in general were a waste of money for the longest time, it took me a really long time to realize they were cool!

    The crane games were better than anything else though and it was worth spending quarters on because first of all they had some nice stuffed animals in there and second you would win probably 90% of the time in the 80’s. Sometimes it would only take 25 or 50 cents to win. Unfortunately its not like that anymore. My mom and I hooked about 4-5 animals in a single quarter at some points. Much better than redemption prizes. Nowadays stuffed animals are a dime a dozen but in the 80’s they cost way more than 25 cents in stores!

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