Gold - Currency x Token - Part 1 - What is a Token

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   This is a complicated theme, I'll begin with some definitions for this 3 part article. Please keep in mind that I'm Psychologist not an Economist, so there's no guarantee of the perfect use of the economic terms, but I'll try to use them as accurately as I can:

Currency - Wikipedia

• Word Origin: A medium of exchange (full credits to Wikipedia)
• Required qualities:
• Usable in any (normal) circumstances as a medium of exchange for some other good
• It's standardly used by the people in a group (like players inside a game world) when trading (it's preferred to use the currency to doing direct bartering with two goods)
• Note that a currency doesn't need intrinsic value - fiat money (modern currency) lacks  pure value itself but medieval gold coins didn't lack it (the gold in them defined their value)
• Desired qualities in a currency:
• Divisibility - a good currency allows precise measure of the value of things (one fresh bread loaf is worth U$1 and one from yesterday is worth U$0,70 otherwise you'd need to trade 7 fresh breads for 10 yesterday bread to make it fair)
• Easy Logistics - a good currency can be easily traded and don't spoil (unlike land or things with an associated cost for transportation)
• Stable value - A good currency doesn't variate much in value (something worth U$ 1 yesterday must no be worth U$ 2 today, if it's inside a similar market - can be understood as no upkeep cost)

Token - Wikipedia

• It's Psychological term from behaviorism theory
• Secondary reinforcement - something that increase the likehood of a behavior due another contingency involving it
• In simpler terms it can be understood something worth a reward (a reinforcement) but not a reward itself
• Requires:
1. Knowledge on how to trade the tokens (where, how and which rate to trade) usually a NPC store, but it can be other players or something much more abstract, like a Top 10 player list (the later is a good theme for a future article talking about achievements and motivation).
2. At least one possibility of token acquisition (a contingency) - This may sound simple but it's very important requirement when you consider that there are several ways (Alternative Schedules) for token acquisition in most games
3. A primary reinforcement - a contingency like "Trade X tokens to get Y" only works because Y is desired (increases the likelihood of the behavior "get X tokens")
• Usually game designers make (1) very intuitive. And it's obvious they have full control over (2). But, unfortunately, they tend to not pay as much attention to (3) as they should.

Currency x Token
   Well, just by looking at the description it's clear that a Currency is, ultimately, a Token. You can trade a Currency for something you want, even if you don't want the currency itself (fiat money). One could say that a good Currency is something that always works as a Token for all people involved because it attends requirements (1) and (3).  Additionally a fair market has no obvious better (2). Also:

• Currency value stability has to do with requirement (1) -A change in money buying power is a change to the ratio of token trading
• Anything a player find use less to himself but can be traded for something he really wants is a token in relation to that player. The likelihood of going to acquire such goods has to do with the ratio of trading that token for a primary reinforcement (I'll go farm "X" because other people will trade "X" for the "Y" I want
• You can chain contingencies involving Tokens. Trade A for B. Trade B for C. Because you could only acquire A instead of C. Example: I work (behavior) for a salary (token) to use the money to buy (behavior 2) food to finally eat food I like (primary reinforcement)

Two examples
     Keep both concepts in mind while I look at two very popular games old games now to understand how did the Token and Currency phenomena come to be:

• Super Mario World for SNES - 1990
• Had gold coins as a pure token - 100 coins always give an extra life
• No one regarded coins as getting richer (Lesson: Just because it looks like money it doesn't mean it's money)
• Some player prized these more than other players (this is better explained if we analyze player personality and traits - I'll investigate this in another opportunity)
• Final Fantasy VII for Play Station - 1997
• Enemies and chests give the player something called "Gil". It looks like a currency, but only because of it's divisibility.
• In reality what you can do with Gil is predetermined by designer, the NPC's Shops trade gil for Items, but buying the best items didn't make the game easy, in fact, it was usually required to be able to face the challenges (Lesson: The designers are fully responsible for defining what a player can do with tokens)

   Well until this point, most games were limited to a single player and didn't have to worry about a true economy simulation. That's why designers didn't have to worry about making a true currency. Calling FFVII "Gil" money was just a immersion resource, for example in the very beginning of FF VIII, it's stated that the protagonist is a mercenary employed for a of high sum "Gil" to help a group named AVALANCHE. But then, after 3 hours, the players easily realize that the "high payment" statement was only for narrative purposes. In fact it's quite blatant how the price of everything rises as the story progresses, even staying in hotels for resting (tough the change in token ratio is for balance purposes).
   It's no surprise that the token acquisition was just a way to reinforce behaviors like exploration and skillful playing in Super Mario World or Fighting Random Battles in Final Fantasy VII. Also, having a token system didn't stop both games from using other reinforcements like power ups or random dropped items respectively.

Token psychological uses
    Tokens work like positive reinforcements, and by definition they make a behavior more frequent. When designing a game, their use must be to increase the likelihood of a behavior, such as shaping more skillful playing or the plain repetition (usually regarded as Farming or Grinding). They can also be used in another ways such as:

• Concurrent schedules - Offering players different ways to get tokens (to get different behaviors) or variating token trading conditions (to make their behavior related to whatever factor you use to variate the token ratios)
• Chain Schedules - Like allowing a player to use the token to enter a new contingency - like a mini-game with an entering fee (skill based) or even a simple gamble (chance based)

    Now, on the other hand, taking away a token (or another positive reinforcement like a power up or rare item) is very unpleasant from the player's point of view and is called Positive Punishment. We should really only use it to extinguish a behavior like poor playing or griefing. To better understand how unpleasant is to be submitted to Positive punishment just look at the most hated enemy in any game - the thief or item destroyer. It's plausible to assume that most players state that their games would be better without these enemies.    But, there is another type of punishment - Negative Punishment - and it's much less used, especially for the token based behaviors. A negative punishment is used to decrease the likeness of a behavior by removing a previously established contingency - in simple terms, it's the decrease or removal of a reward from a previously established behavior. Since this procedure is much less aversive, players tend to respond well to it when you present them with an alternative contingency:

• If you reduce the amount of experience a weak enemy gives when defeated by high level players. Instead of complaining, most players will try to find another enemy that gives more experience. Extinction causes variability in behavior.
• If you reduce (or remove) the rewards for repeating the same behavior, you are in fact using Alternatives Fixed Interval Schedules. Human beings can easily understand such contingencies and adapt their behavior. They will avoid repeating the same Dungeon, if each successive runs give -20% loot chance, and rotate in different runs.

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  In part 2, I look at the recent title - Diablo III - a game that has a true functioning currency and economy, tough not without some difficulties. Grasping the use of Tokens as either Positive Reinforcement, Positive Punishment and Negative Punishment is essential to understand how some mechanics work in that game, and how it affects player's point of view.

For more information on Reinforcement and Punishing (Operant behavior), Currency and Token economy check:
Token economy  - Wikipedia
Operant Behavior
Currency - Wikipedia