RAY SUAREZ: Finally tonight: video games, virtual reality and how changes in those technologies may be connected with economic behavior.
NewsHour economics correspondent Paul Solman and Paul's avatar are our guides, part of his ongoing reporting Making Sense of financial news.
And you should know his story contains some video game violence.
MAN: You should feel like you're there.
MAN: Oh, gosh. Oh, my gosh.
PAUL SOLMAN: Video games, one of the world's fastest-growing industries, with more than $80 billion a year in revenues now, more than twice that of movies.
MAN: The feeling of dropping is really awesome.
PAUL SOLMAN: And at a recent developers conference in San Francisco, the race was on to try out a breakthrough that could take the industry to an entirely new level.
MAN: This is insane.
PAUL SOLMAN: Though not yet ready for retail -- it's expected to sell for about $300 -- the Oculus Rift is already being hailed as the Holy Grail of gaming, a lightweight, affordable headset to deliver totally immersive virtual reality, or V.R.
NATE MITCHELL, Oculus VR: A lot of us got into the games industry to build virtual worlds and explore -- build and explore neat places. And being able to step inside those places for the first time is incredibly exciting.
PAUL SOLMAN: Nate Mitchell, Oculus's 25-year old vice president, gave me a sneak peak at the headset, driving a mech, a sort of weaponized robot, in a virtual reality version of the popular post-apocalypse game "Hawken."
Up, up, up, up. Ooh, yes. This is pretty cool.
The split-screen images, what I'm seeing in each eye, don't come close to capturing the experience. But begoggled, I was virtually within "Hawken"'s Mad Max world.
Oh, I don't like that sign, so let's just get that. There we go. There we go.
NATE MITCHELL: There you go.
PAUL SOLMAN: Got...
NATE MITCHELL: Yes.
PAUL SOLMAN: Pretty mild for video game violence these days, but still:
Do you worry about possible misuse or abuse of this technology?
NATE MITCHELL: There's always going to be people who use technology in weird ways, that you don't want to tap into.
But to be honest, you know, we leave it to developers to choose the content they're building and people to choose what they want to play.
PAUL SOLMAN: But what will they choose?
JEREMY BAILENSON, Stanford University: We are entering an era that is unprecedented in human history.
PAUL SOLMAN: Jeremy Bailenson runs Stanford University's Virtual Human Interaction Lab. While part of the lab's mission is to perfect the technology, its main purpose is to get a handle on V.R.'s psychological effects, now that it's nearing the mass market.
JEREMY BAILENSON: In this world in which you can transform the self and have any experience that an animator can fathom, what are the consequences to the self? What are the consequences to society?
PAUL SOLMAN: Is that as radical a change as your language suggests?
JEREMY BAILENSON: Yes. We cannot underestimate how radical this change is. Video game violence research shows that if you put someone in a virtual scene that's nasty and violent, they behave more aggressively in the physical world.
What we need to do is to think about the wonderful things we can do in these virtual worlds that can make the world a better place.
PAUL SOLMAN: So Bailenson is designing experiments to try to do just that. First step for putting a new subject into those experiments, an alternate reality alter ego, a virtually real economics correspondent.
Using high-resolution photos, lab manager Cody Karutz is creating a digital double to fool my brain into ultimately changing my behavior.
JEREMY BAILENSON: For the first time ever, you get to see yourself in the third person as if in a mirror, except we control the mirror.
PAUL SOLMAN: Oh, my God. That is so weird.
JEREMY BAILENSON: Cody, can you give me dancing?
I don't know if you have got these dance moves.
PAUL SOLMAN: Yes, at first blush, this seems a lark. But placing a convincing avatar in a persuasive, yet manipulable environment was designed for an economic purpose: getting young people to save.
JEREMY BAILENSON: This study looked at a college kid and transforms them into a body of someone who's older.
PAUL SOLMAN: Specifically, into the body or future self of a 65- year-old. The study was designed to see if bonding with their senior selves would cause kids to salt away money for retirement.
If I'm a kid and I'm looking at the older version of me, the idea is that I'm making a non-conscious connection that will stay with me and change my behavior.
JEREMY BAILENSON: Exactly. It's -- you can tell someone you will be older some day, but the visceral experience of seeing your image in the mirror as older than you are causes this deep connection to your future self, and this is what drives future savings behavior.
PAUL SOLMAN: In fact, in a 2011 paper, Bailenson and others reported that those who had seen their future selves in the virtual mirror subsequently put twice as much money into a savings account as those who hadn't. And the research continues.
JEREMY BAILENSON: In future studies, we're actually going to build scenarios that show you what life would be like when you're older when you don't have money, so a very visceral reminder of what poverty would be like.
PAUL SOLMAN: The aim is to help subjects save more and prosper, especially those who don't act as economically as their peers, as evidenced in the famous marshmallow test.
Kids who resisted one treat for 15 minutes got two treats as a reward...
WOMAN: You get two.
PAUL SOLMAN: ... and later saved more and earned more as adults.
So, we asked famous child psychologist Jerome Kagan, could a virtual reality experience or V.R. video game change behavior and improve it for the improvident in real reality?
JEROME KAGAN, developmental psychologist: A lot of this is novelty effects. A lot of these experiments in the literature about you bring someone in and you show them what it's like to be old and you say, now, how much money would you like to give for your retirement? And they give a little more money.
But by the time you're four, you understand the difference between fantasy and real life.
PAUL SOLMAN: Well, but wait. Virtual reality, the very name suggests that you can't really or may not really be able to distinguish between the game experience and real life.
JEROME KAGAN: I doubt that. You can always distinguish between being in a virtual reality laboratory and then leaving, closing the door, and going outside.
PAUL SOLMAN: Not so, says Jeremy Bailenson.
JEREMY BAILENSON: That's going to make you take off.
Virtual experiences are very intense and the effects of them carry over to the real world.
PAUL SOLMAN: So, now what am I doing?
JEREMY BAILENSON: Basically, you're going to fly around like Superman, and you are going to take off by putting your arms over your head.
PAUL SOLMAN: So, put them up?
OK. Oh, my God. Oh, my God. Where am I going now?
JEREMY BAILENSON: Go down. Point your hands down. That will get you back down.
PAUL SOLMAN: Ah! Ah! Oh, oh, oh.
JEREMY BAILENSON: I got you. I got you. I got you. Close your eyes if you get scared.
PAUL SOLMAN: Holy. Holy. That's unbelievable.
Oh, I -- I can see that that would be just unforgettable.
Bailenson says research is beginning to show that virtual reality can have a deep and long-lasting effect on behavior.
JEREMY BAILENSON: So now I'm underwater here, and...
PAUL SOLMAN: Fish going by.
In experiments, swimming with the fishes in water that turns from fair to foul makes people think twice about using plastic bags, which might otherwise wind up in the great garbage patch that's polluting the Pacific Ocean.
And how about sawing down a virtual tree? On average, each American requires two virgin trees for a lifetime of pampering with that squeezably soft nonrecycled toilet paper. The feeling of felling a giant tree, however, can suffice to make some switch to the recycled stuff.
JEREMY BAILENSON: I get calls from people months after experiencing what you just experienced saying that I never walk down that supermarket aisle without thinking about cutting down this tree.
PAUL SOLMAN: And while we're on the subject of environmental awareness:
JEREMY BAILENSON: We have people get on all fours.
PAUL SOLMAN: ... Bailenson is now working on a study that has people experience being cows.
JEREMY BAILENSON: We're trying to make a more visceral connection between an understanding about where your meat comes from and you're feeling what it's like to be led to slaughter.
PAUL SOLMAN: Led to slaughter?
JEREMY BAILENSON: You're led to slaughter, yes.
And it's the idea of giving somebody a bigger connection with the process of eating meat.
PAUL SOLMAN: But wait a second. Now we're getting to "Clockwork Orange." You're creating an aversive experience that is trying to rewire me.
JEREMY BAILENSON: I think of virtual reality like uranium. It can heat homes and it can destroy nations.
PAUL SOLMAN: The power to destroy, said Bailenson, lies not in his experiments, vetted by Stanford's institutional review board, but in the unexamined spread of commercial virtual reality, where the lowest common denominator is likely to win.
JEREMY BAILENSON: These experiences we give you in this lab pale by comparison to a video game that kids play it for hours a day.
My job is to create virtual experiences that can help, and also to inoculate the world to understand that when you have these virtual experiences, they're not free. They change the way you think about yourself.
PAUL SOLMAN: Or about your future self, for better or worse.