Gamification and Business

There is a Nice Q&A at Knowledge@Wharton with Rajat Paharia (of Bunchball fame) and Daniel Debow (of Rypple fame) on the rise of Gamification, and its relevance in the business world.
Its worth reading the whole thing, but I was particularly struck by Rajat's point that this isn't something that is specific to the current 'gaming' generation - it is relevant across humanity as a whole.
To quote directly from Rajat:

... it’s based on satisfying these fundamental human needs and desires we have for reward, status, achievement, competition, self expression, even altruism. Those things cross genders, they cross demographics, they cross any segmentation you want to apply. We’re all motivated by some combination of those ...

I find that remarkably accurate - we are always, always unconsciously acting on these paradigmatic behaviors, and mostly not unconsciously, but instead, actively doing so (if only to suppress the same behaviors!).  Explicitly calling these behaviors out via gamification is not really a bad thing, it may even create a much more natural interaction between users (and/or the product). 

That said, you have to be really careful about implementing gamification - by definition, if you are utilizing these behaviors, you are susceptible to being gamed in return.  Incentives can easily turn perverse, with people doing anything ranging from indulging in the wrong behavior, to outright rejection.  The key is to not just implement gamification, but to set up the incentives and the rewards such that the default ("equilibrium") behavior is to 'do the right thing'.

Behavioral economics has a lot to teach us in this regard.  As a simple example, imagine that you are moving, and ask your friends over to help.  The usual offer of "pizza and beer" suffices, with pretty much everybody coming over to help, not for the "pizza and beer" (Its true.  Most people are not big fans of cold delivery pizza :-) ).  However, if, instead, you offered your friends $25 to come over and help, you'd quickly be able to write at least one chapter of the book "How to loose friends and influence people (badly) for $25".  The point, of course, being that incentives aren't necessarily monetary ("pizza and beer" is actually short for "help a friend out"), and monetary incentives can actually backfire ("take your $25 and shove it up ...").

We're still in the Early adopters sage of the gamification Technology adoption curve, with multiple implementations and ideas duking it out for supremacy, and people experimenting with a variety of incentivization models.  Its going to be interesting to see how things shake out...