The Taiwanese Government has gamified Tax Collection since 1951!

Government Gamification

Government Gamification on Tax Collection

Taiwan is my home country and as I became more knowledgeable in gamification, I continue to be more impressed with the level of gamification that is implemented in its society and culture (without these innovations ever really being called gamification). One of the things I have been most impressed with is how the Taiwanese government uses gamification (specifically Rolling Rewards) to ensure tax compliance.

Tax evasion is very common in most countries, where businesses prefer to take cash over credit cards so they could report less on their earnings. Most countries use the penalizing Core Drive 8: Loss & Avoidance by cracking down and punishing companies that evade taxes when they are caught, but besides a chronic lack of complete enforcement, it is also extremely costly to investigate all the businesses that are suspected of tax evasion.

Introducing Core Drive 7 into Taiwan’s gamified tax collection process

As early as 1951, the Taiwanese government has sought to resolve this problem by doing two things. First, it unified all receipt and invoicing systems into a central system, which means that all businesses that give out a receipt would have the unique receipt number and amount sent to the government for tax reporting.

But the second step is where we see true innovation. The Taiwanese government turned each receipt and invoice number into a lottery ticket for citizens to play. For every odd-numbered month, citizens can see if their receipt numbers match the winning prize, with the first place winning the equivalent of $62,000 (about 5 years worth of salary for an average new college graduate), second place $6,200, and scaling all the way down to $7 wins.

Because of this “Uniform Invoice Lottery” system, consumers are now demanding receipts and invoices from businesses, preventing the businesses from evading taxes by exchanging cash under the table. Not only that, consumers are likely to be willing to spend more since every time they make a purchase they can become a winner, boosting the economy in the process.

Even my grandmother has won many of the small $7 and $31 wins over the past two decades, just by doing what she already does – buy groceries, food, and gas.

As a result of the Uniform Invoice Lottery, the Finance Ministry collected 75% more in tax revenue in 1951 compared to 1950. Great ROI, especially for government efforts.

This has been so successful that the government added much higher prizes after that, topping at over $300,000 prize money, or the equivalent of over 25 years of salary.

In 2006, the Taiwanese government even started to transition these unified invoices into e-invoices, reducing the involved processing costs by $250 million and saving 80,000 trees every year.

We should see more of our governments implementing innovative solutions by motivating and engaging its constituency instead of just clamping down harder or making punishments for infractions more severe.

Collection of all Intrinsic vs Extrinsic Motivation Blog Posts

Intrinsic Motivation

Left Brain vs Right Brain Core Drives, and how they related to Extrinsic vs Intrinsic Motivation

There is a lot of literature out there on Extrinsic vs Intrinsic Motivation. Most people talk about how Intrinsic Motivation is better, but is that always the case? And even so, how to design for more intrinsic motivation?

In a string of snippets from my book Actionable Gamification, we will be exploring topics like the below:

Introduction to Left Brain (Extrinsic) vs Right Brain (Intrinsic) Core Drives in Octalysis Gamification
This is a general understanding of how Extrinsic and Intrinsic Motivation relate to our 8 Core Drives (basically, Extrinsic Motivation comes from Core Drives 2,4,6; while Intrinsic Motivation comes from Core Drives 3,5,7).

How Extrinsic Rewards can KILL Intrinsic Motivation
Most companies like to use Extrinsic Motivation in their motivation design, mostly because it is much easier to put a reward on a behavior you want, as opposed to making it fun. However, the consequences can be detrimental in creating longterm motivation!

How Extrinsic vs Intrinsic Motivation explains why our Education System is Broken
Have you ever tried to reward your child for doing their homework or house chores? How well did it work in the long run? Here we see why our Education System is broken primarily because people don’t understand the differences between Intrinsic and Extrinsic Motivation. Continue reading Collection of all Intrinsic vs Extrinsic Motivation Blog Posts

Serious Games, Advergames, Gameful Design? Implicit vs Explicit Gamification

Serious Games

Serious Games, Advergames, Gameful Design? Implicit vs Explicit Gamification

(Below is a snippet of Gamification Book: Actionable Gamification – Beyond Points, Badges, and Leaderboards. If you like this blog post, you will LOVE the book. This is also a flushed out version of my guest post at G.co)

One of the most popular debates and criticisms in the gamification industry is what is considered gamification and how it relates to Serious Games and Advergames.

For those who are unfamiliar with these terms, Wikipedia defines serious games as, “a game designed for a primary purpose other than pure entertainment.” In other words, games that are generally built for a productive purpose, such as training, education, healthcare, and the like (Hence, the term “serious”).

BusinessDictionary.com defines advergames as, “A video game which in some way contains an advertisement for a product, service, or company.” These are games that basically act as interactive advertisement campaigns which draw potential customers onto a website or into a business. When I refer to “shoot-the-duck banner ads” as early and embarrassing forms of marketing gamification, those banner ads are technically classified as Advergames.

As you can see, both definitions have the word “a game” in them, which seems to go against the core essence of what “gamifying” something means. In my own writings, I talk about how you can gamify anything that involves human motivation, as long as it is not already a game, just like how you can’t liquefy liquid. You can however, apply better game design to games.

So because advergames and serious games are “games,” by that standard you can’t really gamify them. Right?

The Semantics of Gamification vs. The Value of Gamification

Continue reading Serious Games, Advergames, Gameful Design? Implicit vs Explicit Gamification

Affection Held Hostage – how my love for my wife got me duped in China

Chinese Scam

My Affection Held Hostage

(Below is a snippet of Gamification Book: Actionable Gamification – Beyond Points, Badges, and Leaderboards. If you like this blog post, you will LOVE the book.)

In early 2014, I was invited to the global conglomerate *Huawei* in Shenzhen, China to do a few workshops on gamification. During this trip, I had an assigned tour guide that took me to the beautiful Tea Stream Valley for a full day trip. (You can see much of this trip, including my camel ride and a jaw-dropping lion dance performance, in my video series – The Beginner’s Guide to Gamification). Between all that excitement, the educational part of my trip came towards the end.

As I was leaving Tea Stream Valley, I saw people soliciting for pencil drawn portraits. My tour guide was using the restroom, so I decided to check them out and if they were any good – that’s the power of Core Drive 7: Curiosity. They saw me approach and asked if I wanted a portrait which I politely turned down.

I was about to leave, when I saw another artist drawing a portrait based on an iPhone photo for another customer. I asked (in Mandarin of course), “Oh, so if I give you a mobile photo, you can draw it too?” He responded, “Of course! Do you want one?”

I decided that this would be a great way for me to bring something back for my wife to show that I was thinking about her during my long trip away from home. Instead of just buying something expensive on the shelf at an airport, a hand-drawn portrait of her would be more personal and more endearing. It would show her that I actually spent time to have something unique and custom-made for her.

I asked the artist, “So how much for one?” He told me it was about the equivalent of $50 USD. I thought, “Wow, that’s extremely expensive, even by U.S. standards.” Instead of negotiating with him, which I generally dislike doing because it requires too much emotional energy, I decided to use the walk-away tactic in Core Drive 6: Scarcity & Impatience.

“Sorry, that’s way too expensive for me.” As I started walking away, he rushed to say, “What if I could do it for $35?” I felt happy that my scarcity tactic was working, but $35 was still too expensive so I said, “Naw, like I said, it’s way too much.” Of course, I wasn’t bluffing. I truly did not intend to buy anything at that point.

He then said, “Okay…I can do it for $25. Since the day’s about to end, I’ll just do you a favor and wrap up with this one.” At this point, even though it still wasn’t very cheap (for comparison, a 90-minute massage in Shenzhen was only $25), I thought I haggled well by cutting his original asking price down by 50% – feeling a sense of Core Drive 2. He also just used a Core Drive 5: Social Influence & Relatedness tactic of “I like you, so I’ll do you a favor,” so I thought I might as well agree to do it. I’m on a fun trip anyway.

After working for twenty minutes, he was almost done with the portrait. It was alright. It wasn’t great but you could tell that it looked like my wife.(That was my main goal – I didn’t want her thinking that I was having another woman drawn!)

As he was wrapping up, he asked, “Would you like to add a transparent protective layer to the drawing? It will protect the pencil lead from being smudged.” I said, “Sure, sounds good!” He gave me a concerned look and said, “It’s going to cost more though.” Slightly surprised, I asked, “How much more?” He told me nonchalantly that for the protective layer, it was going to cost me $15 extra.

I then realized his sneaky tactic and felt fairly annoyed. I responded in an emotionally disturbed tone, “Then forget about it. I’m not going to pay $15 just for that layer.”

Then, with a very concerned and considerate facial expression, he explained, “But if you don’t add the protective layer, the pencil lead will definitely smudge in your luggage bag and ruin the whole drawing. Look how easily the pencil lead falls off.” He then proceeded to use his thumb to rub a corner of the portrait, and indeed a layer of graphite came off onto his thumb. “It would be such a shame if this nice drawing got destroyed!”

What would you do in this situation? Continue reading Affection Held Hostage – how my love for my wife got me duped in China

When to use Extrinsic Rewards to Motivate People

Extrinsic Rewards

The Advantages of Extrinsic Motivation Design

(Below is a snippet of Gamification Book: Actionable Gamification – Beyond Points, Badges, and Leaderboards. If you like this blog post, you will LOVE the book.)

Obviously designing for Extrinsic Motivation is not all negative. Besides enhancing a person’s focus on completing monotonous routine tasks, it also generates initial interest and desire for the activity.

Often, without there being extrinsic motivation during the Discovery Phase (before people first try out the experience), people do not find a compelling reason to engage with the experience in the first place. Promoting, “You will get a $100 gift card if you sign-up,” usually sounds more appealing than “You will utilize your creativity and be in a fun state of unpredictability with your friends!” (Though both actually utilize Core Drive 6: Scarcity & Impatience.)

When people consider themselves “too busy,” they won’t justify spending time to try out your experience. But when you offer them an extrinsic reward to try out the experience, they will at least test it out, assuming of course that the reward is not an insult to the value of the user’s time investment.

Rewarding users $2 for trying a new search engine for an entire month is pretty weak, while paying people $3 to spend weeks going to stores, taking pictures, and sharing them with their friends is also a path to failure. It is better to not give them a reward at all!

And of course, as we have seen earlier, if people continuously justify doing something for high extrinsic rewards, their intrinsic motivation dwindles as the Overjustification Effect settles in.

Therefore, as Michael Wu of Lithium points out, it is better to attract people into an experience using Extrinsic Rewards (gift cards, money, merchandise, discounts), then transition their interest through Intrinsic Rewards (recognition, status, access), and finally use Intrinsic Motivation to ensure their long term engagement. Through this process, users will start to enjoy the activity so much that they will focus on relishing the experience itself without thinking about what can be gained from the experience.