Saturday, 30 July 2016

Why government should subsidise people to play Pokemon Go

I think I've turned my blog into the economics of Pokemon Go lately (see recent posts here and here). Why another one? The New Zealand Herald reported on Friday:
Pokemon Go players striving to "catch 'em all" are being recruited by Rotorua police to help catch more than the fictional species...
[Rotorua crime prevention manager Inspector Stu] Nightingale said technology was constantly evolving and it was a great tool.
"Having bunches of people roaming around the Government Gardens at all hours chasing Pokemon is a great opportunity for us ... it will deter thieves and also there's more people to report to us what's happening as well."
You read that right. Having more Pokemon Go players in an area reduces crime in contrast with this earlier story). So, Pokemon Go has positive externalities (a benefit that is provided to other people who are not playing the game). When there are positive externalities the market will tend to provide too little of the activity relative to the social optimum. This is because the Pokemon Go players are only considering their own benefits and costs when they decide how much to play (as I discussed yesterday). They fail to consider the benefits that their gameplay provides for others (in terms of reduced crime).

So, to make society better off, the government should find some way to incentivise people to play more Pokemon Go. Subsidies are often used to incentivise production (and/or consumption) of goods that have positive externalities, so that suggests government should subsidise Pokemon Go. Perhaps the government should buy lures and place them in crime hotspots?

There's another good reason for the government to subsidise Pokemon Go. As Dave Schilling wrote in The Guardian, it may help fight obesity:
We might not be able to make fast food healthier or discourage the gluttony our culture reveres, but we can make walking less unpleasant. You might not ever be interested in real birds chirping, but at least maybe you can find the pleasure in the siren song of a wild Togepi or Fearow.
I know anything that gets my kids outdoors and involves fresh air and exercise has to be a good thing. The government should recognise that there are both crime and public health benefits to Pokemon Go, and subsidise the game!

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