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We have been investigating the impact of anonymity provided by avatars on emotional communication and self-disclosure. In a recent study done at the Institute for Creative Technology, University of Southern California (Kang, Watt,& Gratch, 2009), researchers found that increasing the levels of anonymity from none (full visual identification), to intermediate (a graphical avatar), to full (providing no visual representation at all), had two opposing effects: it decreased the sense of emotional connection while at the same time increasing the amount of self-disclosure of intimate information that an individual was willing to share.
the overall effect of increasing anonymity is to increase the communication of intimate information.
This should promote group cohesion and honest communication, even though anonymity also somewhat decreases the emotional connection with the other group members and thus might decrease the motivational effectiveness of social interaction in a game. This is a bit of a quandary, as we would like to have both emotional connection and self-disclosure.