Emotional Value in Deflation

When people can't "earn money" macroeconomically, they turn to "earning stimulation" microeconomically—blind boxes reduce the threshold for gambling to pocket change levels, making emotional compensation as accessible as a power bank, yet quietly accumulating a growing dopamine debt.

In this era of deflation, “emotional value / cost” has become the new measure of cost-effectiveness. Pop Mart delivers excitement, Mixue Ice City offers social connection, and Lao Pu Gold provides security—they collectively fulfill people’s psychological contract of “low cost, instant payoff, high visibility.” This is the true underlying logic behind their explosive popularity. They all enable consumers to purchase a sense of identity through extremely low-cost spending.

Embedding the uncertainty of “maybe I’ll win big next time” into repetitive actions amplifies reward prediction errors in the brain, triggering stronger and more persistent dopamine surges, ultimately forming a closed loop of “payment → feedback → craving.”

While studying large models over the past two years, I’ve also delved deeply into neuroscience literature. In this article, I attempt to analyze the viral success of Pop Mart and Labubu from the perspectives of neuroscience and behavioral economics.

Many are puzzled: amid such weak consumer demand, why have these new consumer brands—Pop Mart, Mixue Ice City, or Lao Pu Gold—risen so sharply?

From a human nature perspective, while actual prices may be falling, the perceived “psychological price” is rising—people must exchange less money for equal or even greater emotional value.

Pop Mart: It repackages gambling psychology as trendy culture using the “blind box + IP” model—essentially offering “low-cost dopamine.” The addictive mechanism of variable rewards becomes a substitute when macro-level returns decline. Blind boxes shrink gambling costs into an everyday “emotional quick charge.”

Lao Pu Gold: It finds a sweet spot on the dual curve of “value retention +炫耀 (showing off),” combining “security + prestige” at a lower price point than traditional luxury goods. In uncertain times, people want to display status (Veblen effect) but fear losing out (asset anxiety). Gold jewelry packages “display” and “risk avoidance” together, resolving the paradox of conspicuous consumption.

Mixue Ice City: It reduces milk tea from a status symbol to a “5-yuan social signifier,” essentially selling discounted social capital. Under widening income inequality, the concept of “affordable showing-off” satisfies our instinctual desire to align upward: I might not afford Haidilao, but I can still leave traces on social media saying “I’m enjoying life too.”

Their commonality isn’t classical “Giffen effect,” but rather satisfying aspirations for upward mobility through the lowest possible cost—a broad form of “cheap identity economics.”

Next, let's dive deeper into the addictive mechanism of variable rewards.

1 │ Neural Layer: Dopamine as a 'Prediction Error' Amplifier

Neuroscientifically speaking, dopamine isn’t a “happiness hormone,” but a “discrepancy signal.” Predictability means small discrepancy; randomness means large discrepancy → addiction risk increases monotonically with “reward variance.”

• Trigger: Electrophysiological recordings show that unpredictable rewards generate larger VTA→NAc (nucleus accumbens) dopamine pulses than predictable ones. The brain updates value via δ = actual reward – expected reward. The greater δ, the faster learning and reinforcement occur.

• Transfer: After repeated exposure, the cue itself triggers dopamine release in advance—gamblers feel excited before pulling the lever. Cue → craving; prize → satisfaction. This temporal mismatch creates a long-term motivational loop.

• Resistance to extinction: After reward cessation, behavior decays slowest under variable-ratio (VR) schedules (classic Skinner Box experiments). The brain interprets “no reward” as just another random outcome → behavior persists longer.

2 │ Cognitive Layer: Three Psychological Illusions That Keep You Hooked

Near-Miss Effect: Slot machines showing “two cherries + one bell” make players feel “almost won,” coding failure as “near-success,” maintaining positive expectations.

Illusion of Control: Actions like shaking dice harder or carefully choosing blind box corners create a sense of personal agency, reducing risk anxiety.

Sunk Cost & Expectation Shield: “I’ve already pulled 8 times, the next one must hit”—past investment inflates subjective winning probability, rationalizing continued spending.

3 │ Behavioral Layer: How the 'Dopamine Loop' Drives Repetitive Action

Cue → Action → Variable Reward → Dopamine Spike → Memory Consolidation → Craving → Cue…

• Cue: Visual/IP cues, countdowns, push notifications

• Action: Drawing a box, placing an order, refreshing the page

• Variable Reward: R₁…Rₙ follow *P(Rᵢ)*≠const → higher reward entropy

• Spike: ↑δ triggers phasic DA in NAc, strengthening memory

• Memory: Hippocampus binds “pleasure + action” together

• Craving: Reappearance of environmental cues → pre-activation of DA → intensified desire

Variable rewards amplify “small stakes” into “dopamine floods.” Greater unpredictability → ↑δ. Uncertain drop rates maximize prediction error (δ), leading to significantly stronger VTA-NAc dopamine pulses compared to fixed rewards. Near-misses intensify this—feedback like “almost got the hidden figure” further boosts repurchase intent. Intermittent, high-variance rewards sustain continuous DA release and induce drug-like sensitization.

In economic downturns, when external “big wins” become rare, the brain compensates by seeking equivalent intensity through high-variance mini-games.

4 │ The 'Addiction Formula' in Product Design

• Randomness + Scarcity: Hidden figures in blind boxes, SSR card drop rate at 0.2%

• Layered Rewards: Frequent small prizes, extremely rare grand prizes (Power-law distribution)

• Multichannel Access: Offline queues × live streaming × community secondary trading

• Time Locks: Limited-time re-releases, midnight flash sales

• Progression Tasks: “Guaranteed rare item in ten-pull” / “rewards for cumulative draws”

The power of variable reward mechanisms lies not in how much they give, but in keeping the brain perpetually uncertain about “what happens next.” In an age of uncertainty, this “certainty of uncertainty” most effectively drives human desire—and is easily amplified by product designers into commercial profit—and potential addiction risks.

Why Does 'Cheap Gambling' Become Emotional Quick Charging in Deflation? — Dual Engine: Macro Returns Drying Up × Addiction to Variable Rewards

① Macro Return Collapse: Breakdown of Wealth 'Positive Feedback' Channels

Negative real interest rates: In 2025, China's one-year deposit rate fell below 1% for the first time, while CPI stood at –0.7%, nearly erasing nominal returns.

Broken asset appreciation narratives: Flat housing prices, volatile stock indices; household deposits continue rising (March 2025: +3.1 trillion yuan, far above historical average).

Result: Traditional “buy-low-sell-high” paths underperform, increasing the average cost of achieving positive emotions.

② Behavioral Economic Backlash from Emotional Shortfalls

Loss Framing: Prospect Theory shows convexity in loss regions—scarcity of returns → increased risk-seeking → willingness to gamble 59–99 yuan for a hidden figure;

Declining Opportunity Cost: Low interest rates reduce opportunity cost of idle cash, lowering perceived investment thresholds; “one blind box ≈ one coffee,” minimizing psychological burden;

Time Discounting: Long-term returns are uncertain, favoring immediate feedback. Getting results within 10 seconds satisfies instant gratification—just like short videos locking in our spare moments. Both embed “low barrier × high variance × fast feedback” optimally into fragmented daily routines, creating habitual micro-gambles/micro-rewards.

Under deflationary pressure and emotional lows, Pop Mart turns variable rewards into a self-accelerating emotional printing press via “blind boxes × scarce drop rates × social amplification”: randomness → ↑prediction error → ↑dopamine peak → ↑social bragging → ↑new users → ↑randomness… a cycle of periodic amplification until regulation or emotional fatigue stops the flywheel.

1 │ Deconstructing the Reward Script

A. Publicly disclose drop rate tables (e.g., hidden figure 1/144), clearly stating tiny odds and defining “grand prize,” activating evolutionary rare-item bias;

B. Draw cost: 59–99 yuan per pull, completed in as fast as 10 seconds. Variable-Ratio (VR) schedule → δ = actual reward − expected reward → ↑VTA-NAc dopamine pulse;

C. Real-time rolling list of near-miss secondary market premiums, cultivating a “so close” atmosphere, leveraging near-miss effect → ↑behavior persistence;

D. Social sharing with unboxing videos, full-series collages, public leaderboards, and user-generated content—public validation fuels external dopamine (likes, comments);

E. High-value exit via secondary markets for top-tier items, enabling financial realization for elite users, reinforcing success memories with tangible wealth feedback.

2 │ Why Has Labubu Become the 'Strongest Catalyst'?

Design Level: High Variance Plasticity

A single “ugly-cute” prototype + infinite themes (ocean, Halloween…) → allows easy expansion of Reward Entropy.

Visual Expectation Gap

Rabbit ears + jagged teeth create a “weird-cute” mix, making it hard for users to accurately imagine what they’ll get → naturally large expectation error.

Social Media Compatibility

3–6 cm size, vibrant colors—perfectly suited for TikTok’s 15-second unboxing format; #Labubu topic reaches over 1.4 million exposures.

Secondary Market Liquidity

Hidden editions consistently fetch 10–20× premiums on eBay/StockX → “winning big” translates into real monetary gain.

3 │ Three 'Turbochargers' Accelerating the Dopamine Loop

T1: Community Synchronization—drawing, posting, group buying, swapping—social mentions reached 876,000 times (Jan–May 2025)

T2: Celebrity Endorsement—Rihanna, Dua Lipa spotted wearing them; Vogue Business reports celebrity influence boosting adult “Kidult” trends

T3: Scarcity Lockdown—UK stores suspended offline sales citing “safety concerns”—doubling perceived scarcity; news cycle triggered by closure of 16 Pop Mart UK outlets

Social Amplifier: From Individual Excitement to Collective Frenzy

Social Media Visibility: TikTok #Labubu hashtag exceeds 1.4 million views; unboxing videos broadcast individual “jackpot peaks” to potential players

Exit Mechanism: Hidden figures command 10–20× premiums in secondary markets, turning “luck” into real monetary reward, reinforcing behavioral loops

Celebrity Validation: Star street style shots reduce the social stigma of “gambling,” instead attaching a trendy identity label

But Trees Don’t Grow to the Sky: Variable Rewards ≠ Perpetual Motion Machines

Upper Limit: When δ (prediction error) diminishes due to improved player awareness or greater transparency in drop rates, dopamine spikes weaken rapidly → swift extinction of behavior.

Lower Limit: As long as predictability remains below 100%, new players will always be drawn in by differential signals.

Regulatory Outlook: Measures such as disclosed probabilities, cooling-off periods, and daily spending caps for minors will almost certainly be implemented—watch for changes in Pop Mart announcements and statements from the Ministry of Culture and State Administration for Market Regulation.

Labubu’s GMV continues to climb, but dopamine-driven growth ≈ “exponential curve × regulatory oversight”—the closer to the inflection point, the more volatile the ride.

High-frequency dopamine models yield windfall profits during macroeconomic low-growth periods, but their cash flows are overly sensitive to ① reward variance, ② regulatory temperature, ③ user attention inventory. Betting on growth requires watching the brakes: when δ fades or policy strikes, valuation compression can be as rapid as its expansion.

Blind boxes and short videos rev up the brain’s evolutionarily developed “prediction error-dopamine” engine to high speed, delivering “quasi-gains” in every 10-second gap. But when high-frequency stimulation becomes normal, the muscles for sustained focus and deep thinking begin to atrophy. Understanding the mechanism and setting limits allow us to recharge emotions without overdrawing cognition.

Finally, reflect: why do the “best” business models—like luxury brands Hermès, Ferrari, or Kweichow Moutai—often target the softest spots in human nature?

High-profit, high-stickiness models rarely invent needs from scratch. Instead, they amplify preferences and vulnerabilities already embedded in our evolutionary path—engineering them into scalable, repeatable cash flow machines.

The most profitable models often start from human weaknesses, but those that endure across cycles ultimately translate these flaws into positive habits or network effects—designing secondary flywheels that convert short-term stimuli into long-term value.

End of article.