Pretty much all modern video games are designed to exploit the same four or five cognitive flaws. The best way to see this in action is to sign up for Idle RPG:
The one thing video games are good for is learning to recognize these patterns. That way at least you'll have a fighting chance at avoiding people who use this stuff to try to exploit you in real life.
In MMOs it's easy: go look at the psychology of rewards. Psychologists found that if you rig up an experiment where you take rats and give them a button where they get food when they press it they'll more or less do the sensible thing: when they're hungry they press it and then eat.
However, if you rig it up so that if they press it they some times do NOT get food they'll immediately press the damn button until their tiny paws fall off. (No joke.) Even though they could do the same thing (press it until they are no longer hungry), the inconsistent rewards makes them freak out. It's the same thing with MMOs--that's why MMOs have loot that you have a better chance of winning the lottery than getting: because it makes people play 24/7 until they die of exhaustion.
As for myself... i prefer to play games that aren't quite as blatantly copied from psychological experiments. Once you buy into the internal logic of the MMO you're done for until you crash and/or quit.
A full explanation would take a while, but here are a few points:
1) Reality is generally continuous. Anytime you see a discontinuity in life, it means someone is probably skimming off the top. (e.g. leveling up)
2) We're all basically the same. Anytime you do something in return for social status, you're probably getting fucked in other ways. (e.g. going to law school)
3) Wealth is generally abundant. Any time you're doing work to get something scarce, someone else is probably making money off what you're doing. (e.g. buying limited edition stuff.)
Not really. Alfie Kohn does have a book called No Contest, where he mentions in passing how competition is used to control people. But it's not really more than a couple pages out of the whole book. And there is another book called Measurement in Psychology that talks about how what most people think of measurements aren't; but that's not really about social control either.
The topic really deserves its own book, but none exists as far as I know.
http://idlerpg.net/
The one thing video games are good for is learning to recognize these patterns. That way at least you'll have a fighting chance at avoiding people who use this stuff to try to exploit you in real life.