Psychological Research Department

You and four other friends, Joan, David, Albert, and Alice went to separate institutions to pursue
educations after high school. Joan attended Harvard where she studied management. David
attended Stanford where he studied marketing. Albert attended Virginia where he studied human
resources management. You went to Troy University’s Sorrell College of Business where you
studied accounting and eventually passed your CPA examination. Alice attended Yale where she
studied computer science. She specialized in game design.
After graduation, Alice went to work for GameDay, Inc. where she worked on game design.
That company had a large number of psychology graduates who had Ph.Ds and who worked in
that company’s Psychological Research Department, which did research work on the
psychological aspects and dimensions of game theory. The Department’s research demonstrated
that there were certain aspects of games and game design, which could be built into games that
would result in a game that produced a form of psychological addiction. During the course of
her employment, and as part of her job responsibilities, Alice became very familiar with the
psychological research being done by the Psychological Research Department.
After working at GameDay for two years, Alice left the company and contacted you and the
other three high school friends. She proposed that she, you, and the other three friends form an
LLC to develop and design games. The name that she proposed for the LLC was GameRush,
She proposed developing computer games. You and the other two friends agreed to her
proposal. You all retained counsel and set up an LLC.
A financial plan was proposed by Alice whereby, the production of the game would be
outsourced to a company in India. Alice knew of the plant and its production through her work
at GameDay. She knew the plant was in Bhopal, India, and that the labor rates were lower than
most other parts of India. She also knew that the turn-around time from placing an order to
receipt of the final product was a remarkably shorter time than provided by other manufacturing
sites in Vietnam and Malaysia and even most other sites in India. Alice did not propose going to
India to inspect the plant, but to simply contract with that company’s representative here in
Alabama for the work to be done.
David, as Chief Marketing Officer, proposed a marketing plan whereby he would contact
potential advertising clients who would purchase advertising on the game. At points, where
commercial names could be used, the advertisers would purchase time on the game for their
names to be used. The primary advertising strategy was to tell potential advertisers that players
of the game would use the game over and over multiple times during which the advertiser’s
names would be prominently displayed to the players of the game.
Alice had access to psychological research while working at GameDay which showed that
repetition of advertisers’ names increased the probability that viewers of the advertisements
would buy the products and that the use of names in the context of “fact” scenarios, like games,
increased even more then probability of users buying the advertisers’ products. This was told to
potential advertisers as an inducement for them to put their advertising in the game.
The plan was to build and market a game using Alice’s knowledge of the psychological research
on building into games addictive qualities which she has learned while employed at GameDay.
Everyone agreed to the business plan except you. You expressed your concerns.
The psychological research regarding the dimensions of game theory and the advertising issues
were not the subject of any trade secret protections enforced by GameDay. Much of the research
could be found at various universities.
You have a spouse at home who has just lost his/her job and you have two children. Both are
going to a private school in your community where the tuition for each student is $15,000 per
Consider your concerns as described in this case and prepare a memorandum that addresses the
concerns described below. Your memo should be completed in narrative form (you may use
headings if you choose to do so for organizational purposes, but do not list your responses in
bullet form). Maximum page length: 10 pages (double spaced).
Identify all of the potential ethical issues you see (if any). Describe and analyze the implications
of each issue, including who or what may be affected by your or the company’s response. In
identifying issues and addressing their implications, your discussion should be as comprehensive
as possible—you should consider any economic, social, or ecological implications, as well as the
potential impact of any cultural differences you can identify.
Additionally, your analysis should thoroughly identify and discuss at least two potential courses
of action that you or the company could take with respect to each issue you have discussed.
Clearly demonstrate your reasoning process—identify and explain any ethical principles or
arguments you are relying on; do not simply state unsupported conclusions.
If you choose to apply any approaches to ethical reasoning, clearly state what they are and how
you are applying them to this case. Of the possible solutions you identified, which would you
recommend as a resolution? Again, fully explain and justify your recommendations. Finally,
explain how you would implement each solution you have recommended.

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