There’s an adage in economics that seems obvious, but highlights something that’s critically important to understand in game design: “People respond to incentives.” I’ve been thinking about them a lot lately, and while the examples I use here are largely horror rpgs, the lessons are applicable to just about any tone of game.
I had the opportunity to play Delta Green recently, a game inspired strongly by Call of Cthulhu. It was an amazing experience, thanks to a game master dedicated to creating an immersive experience that responded to our characters. It had just enough real-world details to make it feel like something that could plausibly happen. the tension at the table was palpable at times. However, during the game, I noticed something interesting: we were all playing our characters very cautiously.

After the game, I had a chat with the game master about it, and he said he’d noticed that every time he ran the game. It’s hard to tell stories about characters who push through the fear to investigate further, or who do something that a genre-savvy player might know spells their doom. Part of this is because people get attached to their characters and don’t want to see them suffer- which is understandable, but we all knew what we signed up for.
And yet: we never went into the spooky house, we just burned it down. We never investigated the sounds from below the ground, we just collapsed the entrance. We never learned what was really going on and were happy to get out alive. It was an immensely satisfying play experience… but it was not a good story.
This isn’t a problem that veterans of this type of game have, or of any hyper-lethal old-school RPG, for that matter. But why is that adage of “drive your character like a stolen car” is much easier said than done?
There was a trade-off made in the design of Delta Green: Creating the right feeling at the table and making it easy to tell the right kind of story. And to find out why it works out the way it does, we have to look closer at the incentives the game provides to the players.
What are incentives?
An “incentive” is anything that motivates someone, for good or ill. Something that spurs someone to action. Incentives make you want something (or want to avoid something). There are broadly two types of incentives, described aphoristically by the phrase “carrot and stick.” If you want someone to do something, you can offer to reward them if you do… or punish them if they don’t.
Incentives, importantly, always provide a choice. Unlike a rule which says “you must,” incentives always propose “if you do…” (If you take the gold, you will be cursed. If you betray your friends, you will be paid). They’re more subtle than a hard-and-fast rule, however they can be very powerful yet deceptively easy to overlook when designing a game.
So what were the incentives doing in Delta Green?
Incentives create a feeling
Following in the footsteps of “cosmic horror” games before it, like Call of Cthulhu, each character has a pool of sanity points. Whenever a character encounters something frightening, mind-bending, or supernatural, they may permanently lose some amount of sanity points. And while it’s possible to gain them back one or two at a time, you lose them much faster than you could ever regain them.
This fits the concept that the cosmic horror genre has of sanity- when you know too much of the truth, your grip on reality becomes more and more tenuous, and you can never un-learn what you’ve learned, never un-see what you’ve seen. And if you run out of sanity points, your character is permanently removed from the game. Whether they flee, or die, or just become an NPC under the GM’s control, they are now no longer playable.
The largest effect of sanity points is the feeling it creates in the players. That feeling that something is being lost that can never be regained. And that feeling instills in the players some of the fear and dread that their characters experience. This is a part of what created that atmosphere of tension and dread at the table that made the moments of release when we made it out all the more cathartic.
But if it evoked the right feelings, why didn’t it create the right kind of story?
Feelings create action
It’s simple, when you think about it: The fear of losing our sanity points made us behave more cautiously. As the economist say, we responded to the incentives. Even though it was our characters in danger, not us as players, we feared losing our characters through the proxy of losing sanity points.
It might have been a more interesting narrative if we investigated further, but that wasn’t the pattern of play the game incentivized us to pursue. Doing so would be directly against not just the interests of our characters, but against our own interests. If we did decide to look further and our character witnessed something traumatizing, we as players would be punished with the threat of losing our characters!
But why is this simple thing, ticking down a number on a sheet, so powerful at creating fear in the players at the table?
The Endowment Effect and Loss Aversion
People by and large hate to lose things they have. If you give someone $5 and then take it away, they will feel like they have less than they started with. This is known as the endowment effect (or “divestiture aversion”), and it’s a well-studied phenomenon in psychology. People tend to value more highly things they already have than things they could stand to gain, and so letting go of things hurts more than it should.
Likewise, loss aversion tells us the simple truth that people just hate to lose. It feels worse to lose something that it is to gain it in the first place. Losing two sanity points feels more bad than gaining two sanity points feels good, so the outcome is net negative.

These psychological effects seem to be very consistent and powerful across numerous studies. This is incredibly useful to us as designers, because it gives us our stick from the “carrot and stick” aphorism.
It’s clear to see now what was going on in Delta Green. Our fear of losing sanity points made us feel some of the fear of our characters. This created the right feeling at the table, but caused us to act in a predictably over-cautious way.
Can you have both?
But is it possible to get both the right feel at the table and the right kind of story? Absolutely! I mentioned previously that experienced players in this genre don’t tend to have this problem. So why is that?
This is largely because experienced players have learned, after much demonstration, that losing your character is the point of this type of game. It’s inevitable. For many, it’s a lot more fun to enjoy the ride down and go out in a blaze of glory. Or, some might learn to lean into the paranoia and revel in outsmarting the horrors without succumbing to them.
But it’s generally true that newer players of any TTRPG are much more likely to become very attached to their characters, and experience a lot of painful bleed when their character suffers. By contrast, more experienced players have often learned to separate themselves from their characters more. They’ve experienced their characters suffering, and know that they, as a player, came out ok. And they tend to be more comfortable taking on an authorial role, looking for the most interesting outcome, which isn’t always success.
And so through focusing on the overall narrative, experienced players can overcome the trade-off and get both a good story and the right feeling at the table. You can feel the fear created by the threat of the stick, but push through it and do the more interesting thing anyway. But is there a way to make it easy for new players to get both?
Let’s see what happens if we invert the incentives.
Carrots (and other little treats)
Fear and Panic, by Lyme is the perfect game to contrast with my experience playing Delta Green, because it almost perfectly reverses the incentives created by the sanity points mechanic.

In Fear and Panic, when you see something that challenges your sanity, rather than losing sanity points, you gain fear points. This flips the loss aversion on its head: we’re no longer losing something, we’re gaining something, even though for our characters , the situation is the same.
And unlike in Delta Green, where running out of sanity points causes a massive punishment -losing your character forever- in Fear and Panic, fear can be spent for bonuses to rolls or to activate special actions… but only for actions that demonstrate your fear or instability like fleeing, lashing out violently, obsessing over a task, or having a prophetic vision. But gain too much fear and you might pick up scars that permanently change your character.
“A survivor can go the whole game without ever being scared, but with no fear to spend, they may not survive for long.”
Fear and Panic, p. 14
Suddenly, it’s easy to imagine as a player wanting to go investigate that sound. Being excited to go into a spooky house in the woods. Because we want those fear points to spend; they just seem fun! So our investigators are suddenly curious, risk-taking, and getting a lot more up close and personal with the horrors.
But fear points get us both coming and going: once we have the points, we want to spend them. Because we want to succeed, we want the bonuses, so we’re more likely to act in a way that will let us spend the points. And now our investigators are also erratic, self-destructive, obsessive… all the things we as an audience would want to see from a character who’s seen too much.
Another example:
The only other game I’ve seen that use points so effectively like this is Apocalypse Keys by Rae Nedjadi.

In Apocalypse Keys, each character contains a monstrous nature that threatens to overcome them. You as a player can earn points by leaning into your character’s monstrous nature- any number of points you want. And you can spend those points for bonuses to rolls. But spend too many and roll too high, you overshoot your target in a destructive way: a “catastrophic success.” And if you hold onto too many without spending them, you risk losing control to your monstrous side, with disastrous results.
So… can you have both?
It seems like using something like Fear and Panic completely fixes the problem we have- it’s now easy for players to create a story that matches the genre expectations. But there’s a critical difference in the tone of the game. Where players had been afraid to investigate too closely, now they’re excited. This source of easy tension is gone. And depending on the player, that might be ideal. In a lot of horror games, the goal is not to scare the player, but to scare the characters. But some players might want to be scared, to feel that tension, for the same reason a lot of people love horror movies.
Fear and Panic addresses this somewhat by making most high-stakes challenges more difficult. So much so that they’re unlikely to succeed without some fear to spend. That fear of failure is a handy motivator, but it’s less powerful that that ticking clock of sanity. Some other games, like Dread, us other means to build tension. (Like a physical tumbling block tower, in the case of Dread).
But most often, it simply falls to the Game Master. skilled GM can evoke a horrifying tone through skillful narration and writing. Does the ease of pushing players towards their character’s fears rather than away make up for the loss of that feeling of… loss? I don’t know yet. And I’m sure it is different from group to group, but I’m very excited to find out.
So as before, creating the right tone and the right type of story requires a degree of skill and experience… just this time more from the GM than the players. The game has focused its attention towards structuring incentives to create the right type of story, and less towards creating the right feeling in the players. It’s doing more of its work in a different place, so a different part of the game is easier to run.
Where does that leave us?
I am left trying to imagine a game that tries to do both. Would it work as well to build a game where a character loses something meaningful if they don’t go investigate further? Perhaps if you don’t go investigate that noise, you lose more than just an opportunity to find out more. You’re giving in to the way things are. Letting them be. You lose some of your passion. But maybe if you go investigate, you may keep that passion and curiosity, at the risk of physical danger. In this case, we get a game about the fear of complacency, of ennui, of giving up and becoming unimportant to the story.
For now, it’s just a thought exercise. All of the games we’ve discussed today achieve what they set out to do with flying colors by creating the right incentives. We can create tension and drama by threatening consequences. We can get players to take actions they normally wouldn’t by promising a reward. Even acting against what’s best for their own character for a more interesting story.
As designers, one of our great powers is to get people to have fun in ways they wouldn’t think to do on their own. Knowing how to create the right incentives and understanding the incentives your mechanics are creating are the key to shaping the experience of the game and the structure of the story.
Take a look at a any game you have on hand. Pick just about any mechanic and ask yourself: What does this mechanic make me want to do? What does this make seem fun? The answer may often surprise you.


