InThinking Revision Sites

INTHINKING REVISION SITES

Own your learning

Why not also try our independent learning self-study & revision websites for students?

We currenly offer the following DP Sites: Biology, Chemistry, English A Lang & Lit, Maths A&A, Maths A&I, Physics, Spanish B

"The site is great for revising the basic understandings of each topic quickly. Especially since you are able to test yourself at the end of each page and easily see where yo need to improve."

"It is life saving... I am passing IB because of this site!"

Basic (limited access) subscriptions are FREE. Check them out at:

www.StudyIB.net

Demerit goods

  • /
  • Textbook/
  • Chapter 2: Microeconomics/
  • Economics real world examples and extension material /
  • Demerit goods

The Chinese government impose a limit on gaming

Plenty of politicians have their eyes on the harmful consequences of online gaming. There are stories of gamers playing for such continuously long time periods they wear diapers to avoid pauses in play. Whilst this kind of playing might be rare, there are many young people who have become addicted to gaming. There are also concerns about violence and the sexually explicit content of some video games. 

The new 3 hours a week rule introduced by China’s video game regulators means that under 18 online gamers will only be allowed to play for one hour a day on Fridays, weekends and holidays. Online gaming companies will now be prevented from providing gaming services to young people outside those hours and would need to put into place name verification systems to stop gamers avoid the regulations.

There is increasing concern amongst the Chinese authorities about online gaming by young people with Xinhua the state media outlet branded online games "spiritual opium".  Regulatory checks on online gaming companies will increase to make sure the time limits are adhered to.  

A report published by the state-run Economic Information Daily claimed there is evidence that many teenagers have become addicted to online gaming, and it was having a detrimental impact on their welfare.

Technology companies are introducing their own measures to make sure young people are following the regulations. For example, the Chinese gaming company, Tencent has introduced facial recognition technology to stop children using their parent’s ID and gaming through the night.  

Points to discuss with a class

There are some important things to consider in this policy move by the Chinese government:

Explain why online video games are an example of a demerit good.

A demerit good is a good society says people should not consume because they are associated with significant social costs. In this case, the Chinese government's limit on the time children spend gaming suggests it has the characteristics of a demerit good.

To what extent is online gaming an example of market failure?

Gaming could be considered a market failure because it leads to an over-allocation of resources. The Chinese government may be concerned with the welfare of young people and the possible negative externalities of consumption of, for example, the reduced progress of young people at school if they spend too much time gaming. There could also be an impact on the health of young people which could negatively affect the health service. The over-allocation resources is shown in the diagram.

Evaluate the regulatory policy used by the Chinese government to deal with the problems caused by online gaming. 

If the rules put in place by the Chinese government are successful in reducing the amount of gaming by young people then it could have the following benefits:

  • Improved health amongst young people that reduces long-term healthcare costs.
  • The performance of students at school might improve if they are doing less gaming.

Young people may, however, find their way around the restrictions and they could turn to other activities that have higher social costs than gaming.