# Everything I ever needed to know, I learned from World of Warcraft: Incentives and rewards

*This is the second in a series of posts about lessons from my experiences in _World of Warcraft_. I’ve been talking about this stuff for a long time—in forum comments, in IRC conversations, etc.—and this series is my attempt to make it all a bit more legible. I’ve added footnotes to explain some of the jargon, but if anything remains incomprehensible, let me know in the comments.*

*Previous post in series:* [Goodhart’s law](https://www.lesserwrong.com/posts/GxW8ef8tH4yX6KMrf/everything-i-ever-needed-to-know-i-learned-from-world-of).

---

“How do we split the loot?”

That was one of the biggest challenges of raiding in *World of Warcraft*.

We’ve gotten 40 people together; we’ve kept them focused on the task, for several hours straight; we’ve coordinated their efforts; we’ve figured out the optimal strategy and tactics for taking down the raid boss; we’ve executed flawlessly (or close enough, anyway). Now, the dragon (or demon, or sentient colossus of magically animated lava) lies dead at our feet, and we’re staring at the fabulous treasure that was his, and is now ours; and the question is: who gets it?

## The problem of the indivisible

“Why not divide it 40 ways? That’s only fair!”

If only it were that easy! But the loot *can’t* be split 40 ways, because it’s not just a giant pile of gold coins; it’s (for instance): a magic warhammer, a magic staff, and a magic robe. Three[^1] items; each quite valuable and desirable; each of which can be given to one person, and *cannot be sold or traded thereafter*. We have to decide, here and now, which three out of the 40 members of the raid will receive one of these rewards. The other 37 get nothing.

What to do?

It would be difficult to overstate how much thought went into answering this question, among *WoW* players; how much effort was spent on debating it; how much acrimony it spawned; and how critical was a good answer to it, in determining success in the most challenging endeavors in the game (high-end raiding). Disagreements in matters of loot distribution broke friendships, and ill-advised loot policies cracked guilds in half.

Nor should this be at all surprising, for *World of Warcraft* was human civilization in microcosm. The task of organizing and coordinating a raid was project management; figuring out how to take down a raid boss was strategic planning, and practical epistemology, and mathematics; making money at the Auction House (in order to purchase performance-enhancing potions) was economics. But the distribution of loot—that was **politics**.

## Pie-slicing as project management

To the question of “how to split the loot”, there is at least one simple answer: a roll of the dice.[^2] This method was used often—in “one-off” raids, wherein a group of players would come together, for this one occasion only, to defeat a challenge (or a connected group of challenges), and then disperse, entering into no longer-term relationship with one another, possibly never to cooperate or interact again. In such cases, it was understood that your participation comes with the promise of a *chance* at winning a reward. If the group happens to find some piece of treasure which you covet, you will have an opportunity to throw your name into the hat, and—should the Random Number God smile upon you—to win the prize. That’s all you can expect, and it’s no more than anyone else is getting. In a temporary collective, made up of strangers, one can hardly ask for more.

But such one-off groups are nowhere *near* effective enough to tackle the most difficult challenges that are available—that is, to do “progression raiding”[^3]. For that, you need for the *same* 40 people to assemble, week after week, month after month; they must learn to work together smoothly, and they must all, together, learn the raid encounters, and the strategies and tactics for defeating them; and, just as importantly, all members of the raid must “get geared”—must acquire better and better equipment for their characters, in order to improve their performance and become better able to handle the next challenge, and the next. This is a *sustained, collective* effort, and it can only be managed by a persistent organization: the **raid guild**.

The challenges of running a raid guild are legion; there is much to say about them—enough for many more blog posts. For now, the key point is this: for a raid guild, the question of loot distribution is, at once, *both* a serious and thorny problem, *and* a powerful tool which may be applied to many other aspects of guild management.

There were many “loot systems”. Some were communistic: the raid leader (or a “Loot Council”, composed of the raid leader and a small handful of others) would simply decide which raid member would receive each piece of loot—“to each according to his need”. Others were at the opposite extreme—“free market” systems, where one accumulated “points” via raid attendance and contributions to the raid’s success, and the allocation of loot was decided via bidding.

Neither extreme ever sat well with me (for reasons that should be obvious enough to anyone with any passing familiarity with the real-world economic systems to which I alluded). When the guild to which I belonged decided to get serious about progression raiding, and it came time to formulate a policy for loot distribution, I advocated for a loot system which, to this day, I consider the most ideal, of all the systems I’ve encountered. The system was adopted, and it served us well for years to come. That system was known as the “Effort Points / Gear Points” system, or **EP/GP**.

## Solution: EP/GP

The idea of EP/GP was simple. There are some actions/behaviors that you don’t want your members to engage in at all; those you ban outright, and set whatever punishments you see fit. Those aside, however, there are two categories of things that *aren’t* discouraged:

**First**, there are things that you want everyone to be doing as much as possible—things that are *unboundedly good*. **Second**, there are things which are good for people to be doing, healthy, expected, certainly not discouraged—but you don’t want anyone doing them *too* much, and you don’t want there to be a serious *imbalance* in *who* is doing those things.

The second category consists of things which people just *want* to do, of their own accord, and don’t really need to be *incentivized* to do; they’re their own incentives. The first category consists of things that you do generally need to incentivize people to do, even if people “want” (or *want to want*) to do them. (In *WoW*, the first category is “help the raid kill bosses” and the second category is “get gear, thus making your character more awesome”.)

The idea of the EP/GP distribution system is that you **use the first category to rate-limit the second**. Each member has two quantities associated with them: EP (effort points) and GP (gear points). Both start at 0; each goes up as a consequence of actions/behaviors in that category. Do unboundedly-good prosocial thing? Your EP goes up. Do self-incentivizing indirectly-prosocial self-benefiting thing? Your GP goes up. And whenever there is any scarce resource that people want, it is **allocated according to EP/GP ratio**; whoever has the highest such ratio gets the resource (and their GP goes up accordingly).

So, the more EP-generating things you do, the higher your priority in the allocation of rewards; the more GP-generating things you are allocated, the lower your priority subsequently. As long as you can define those categories, and place relevant behaviors/actions into them, EPGP works to allocate your scarce resources and incentivize members’ contributions.

The EP/GP system has a number of ancillary benefits:

**First**, new members immediately get the instant gratification of being top priority for resources, as soon as they contribute anything whatsoever (as EP and GP start at 0, any contribution makes EP positive, and positive/zero = infinite priority!) Having now given and gotten something of value, they are drawn in, at which point their priority goes down to below that of regulars/veterans; it fluctuates greatly at first, then stabilizes. This incentivizes early contribution, but doesn’t make people “pay dues” excessively to get anything at all.

**Second**, because EP can be assigned for anything, and relative values set to whatever the administration wishes, the system makes it easy to design incentive structures that encourage whatever you like

**Third**, there is tangible benefit to sustained contribution, without locking out newcomers.

## A contrast: DKP

“Dragon Kill Points”, or “DKP”, was, once upon a time, the most popular loot system; it long predated EP/GP.[^4] In DKP, each member of a raid would receive some number of points (the titular “dragon kill points”) upon successful completion of a raid encounter. To receive a piece of loot, a raid member had to spend some of his points (the amount usually determined by a bidding contest among all raid members who wanted that item).

DKP had many faults, and waned greatly in popularity as *WoW* aged; better systems (such as EP/GP) had come along. With DKP, if you were a newcomer, joining a raid full of veterans, the only way you were going to get anything was if no one else wanted it—otherwise you had to toil through raid after raid, contributing effort but knowing in advance that you weren’t getting anything for your efforts (except scraps from the veterans’ table, as it were).

## What makes a good loot system?

The twin needs, in any group that depends, for success, on a bunch of people all contributing as much effort as possible, are:

1.  You have to pull in good people;
2.  You have to get your people to stay, and keep contributing.

DKP was bad at #1, because the prospect of slaving away for weeks or months before you had accumulated enough to have a shot at the good stuff was daunting (and then you could be outbid by a veteran who’d been hoarding his points for longer; and even if you won, you might've just spent all your points on one thing; etc.). DKP was also bad at #2, because after you had accumulated a certain large pool of points, the incentive to keep contributing dropped off.

EP/GP, on the other hand, is good at #1, because your first reward is basically guaranteed, as soon as you contribute something of value. And EP/GP is good at #2, because going up in priority is easy at the start, and bouncing back from getting some gear is easy, and as it gets harder, well, ratios equalize; and as long as you *keep contributing*, you stay at a good ratio, and meanwhile, the higher your EP gets (if you’re a veteran), the faster it drops when you get something.[^5]

## Is EP/GP really the best way?

Later in *WoW*’s history—when it became possible for high-end raid encounters to be tackled by smaller raid groups—there arose, within some raid guilds, the practice of having multiple raid groups, including some that were more ‘elite’/exclusive than the guild’s main raid group. (Members of such smaller groups typically participated in the sub-group’s raids *in addition* to taking part in the guild’s primary raiding activities.) Where a good raid guild might’ve been in the 99th percentile of competence and achievement, among the overall player population, it might have within it a smaller raid group which was much, much further toward the right tail of the raid content achievement distribution.

Such smaller sub-groups usually did *not* use the EP/GP or other allocation system of the main group, but had their own, separate, loot policies. These policies typically skewed closer to “managed communism” than to “regulated capitalism” on the spectrum of loot systems; and I do not think that this is a coincidence. The members of these smaller, more exclusive groups—which, in virtue of their greater selectivity for competence and performance, almost always performed better and accomplished more difficult goals than a guild’s primary raiding group—exhibited a higher degree of sublimation of personal interest to group interest, than did members of a guild’s main raid group; they were more willing to make sacrifices “for the good of the raid”.

If you’re trying to maintain a raiding guild of 100 people, keep it functioning and healthy over the course of months or years, new content, people joining and leaving, schedules and life circumstances changing, different personalities and background, etc., then it's important to maintain member satisfaction; it’s important to ensure that people feel in control and rewarded and appreciated; that they don’t burn out or develop resentments; that no one feels slighted, and no one feels that anyone is favored. You also have to recruit new members, to keep up with inevitable member turn-over. All of these things are more important than “being maximally effective at taking down this raid boss right now, and then the next five bosses this week”. If you focus on the latter and ignore the former, your guild will break and explode, and people on *WoW*-related news websites will place stories about your public meltdowns in the Drama section, and laugh at you.

On the other hand, if you get 10 players together, and you say: “OK, dudes—we, these particular 10 people, are going to show up every single Sunday for several months, play for 6 hours straight each time, and we will push through absolutely the most challenging content in the game, which only a small handful \[or sometimes: none at all\] of people in the world have done”—that is a different scenario. There’s no room for “I’m not the tank but I want that piece of tank gear”, because if you do that, you will fail.

What a group of the latter sort *promises*—which a larger, more skill-diverse, less elite/exclusive, group *cannot* promise—is the incredible rush of pushing yourself—your concentration, your skill, your endurance, your coordination, your ingenuity—to the maximum, and *succeeding at something really really hard*, as a result. That is the *intrinsic* motivation which takes the place of the *extrinsic* motivation of “getting loot”. As a result, the extrinsic motivation is no longer a resource which it is vitally important to allocate. In that scenario, your needs are the group’s needs; the group’s successes are your successes; there is no separation between you and the group—and consequently, the need for equity in loot allocation falls away, and everything is allocated strictly by group-level optimization.

This was evident in the reactions people had, to seeing other people get loot. In a larger, somewhat-more-casual, raid group, it went like this:

> *Alice gets \[awesome piece of gear\].*
> 
> **Alice:** yay! :D
> 
> **Bob:** grats
> 
> *\[Bob is happy for Alice but also jealous, Bob wanted that thing too.\]*

In tighter-knit, more “hardcore” groups, it was more like this:

> *Alice gets \[awesome piece of gear\].*
> 
> **Everyone in the raid:** F***| YEAH!! :D
> 
> *\[Everyone is ecstatic that Alice got that thing; no one is jealous.\]*

In the latter case, it was not only understood, but viscerally *felt*, that every thing that *anyone* in the raid gets, is increased performance *for the group as a whole*—which is all that matters.[^6]

[^1]: It wasn’t always three, of course; sometimes one, sometimes four, etc.

[^2]: *WoW* came equipped with such a feature; one would type `/roll 100` into the chat window, the server would generate a pseudo-random number in the range \[1,100\], and would output the result into the chat, for all raid members to see. Thus, everyone could roll for a piece of loot, and the person with the highest roll would receive it.

[^3]: See the [previous post in the series](https://www.lesserwrong.com/posts/GxW8ef8tH4yX6KMrf/everything-i-ever-needed-to-know-i-learned-from-world-of) for a definition of this term.

[^4]: DKP is one of the oldest loot systems; it was used even before *World of Warcraft*—in older MMORPGs like *EverQuest*.

[^5]: Most EP/GP implementations also included a “decay” feature—which periodically (every week, or every month, or similar) reduced all EP and GP values by some factor—which helped even more.

[^6]: Of course, that sort of thing doesn’t scale, and neither can it last, just as you cannot build a whole country like a kibbutz. But it may be entirely possible, and perfectly healthy, to occasionally cleave off subgroups who follow that model, then to meld back into the overgroup at the completion of a project (never, indeed, having truly separated from it—the sub-groups’ members continuing to participate in the overgroup, even as they throw themselves into the sub-project).