Why People Risk It All: The Psychology and Economics Behind Squid Game

Photo Credit: rottentomatoes.com

Psychology Paragraphs written by Michelle Yu

Intro/Conclusion & Economics Paragraphs written by Shreyal Bhagwat

Edited by Shreyal Bhagwat

On June 27, 2025, Squid Game Season 3 blew up on Netflix, with over 60 million viewers and 368 million hours watched in just the first 3 days. If you have watched the show, I know you have definitely questioned why someone would even want to join or start these games in the first place. Is it to escape the struggles of daily life? Is it out of desperation to get money? What about the VIPs and the creator? These questions go beyond the tip of the iceberg and look at the real content of such a violent and inconceivable show. Squid Game shows how economic desperation and psychological pressure push people to make choices that an average citizen wouldn’t even think of. In this article, we will unpack the psychology and economics hidden beneath the tension and chaos. We will explore concepts like moral injury, survival stress, game theory, and opportunity cost to reveal why the players do what they do when everything is on the line.

Psychology Behind Squid Game: How Extreme Stress Affects the Mind

Moral Injury

One key reason players don’t simply refuse to continue the games is that they have become enthralled by moral injury—the continuous action of witnessing something that goes against their own morals. Have you ever felt deeply shaken because you witnessed or took part in something that went against your core values? That feeling is quite literally what it sounds like: an injury to your morals. In Squid Game, moral injury is constantly cycling through. Players watch their friends or even strangers die from the guards simply because they failed a game such as Red Light, Green Light. Unaware of the strings that would be attached when joining these games, the players are left with no choice but to watch as their ethics are breached time and time again. Moral injury tends to follow a cycle. First, a person witnesses an event that they believe is wrong. After internalizing it as pain and reflecting on it, the person will feel helpless because they can’t do anything to change what has already happened. To cope with this emotional injury, people can deal with it in healthy ways such as counseling or self-care, but they can also cope in unhealthy ways such as anger, substance abuse, and isolation. As their morals continue to be defied, this cycle will only continue to repeat, leading to further damage as time progresses.

Survival Stress

Since the players are now aware that their lives are literally on the line as they play the games, survival stress - the body preparing for fight or flight - kicks in. I’m sure you have heard of fight or flight. To prepare your body to respond to the danger, your brain will send signals to release hormones like adrenaline and cortisol, which will cause breathing and heart rate to increase. By contrast, some physical skills will diminish temporarily, such as fine motor skills (opening doors, using keys, etc.). Although this is shown throughout the three seasons, Dae-ho clearly demonstrates his survival stress in the hide-and-seek game. During the game, Dae-ho evidently struggles with his dexterity as his hands shake and he can’t use the keys as efficiently. In spite of this, Dae-ho shows his gross motor skills as he is able to quickly crawl up the stairs to flee from the danger. We are all aware of fight or flight, but there are two additional responses that humans have to danger. There is freeze, where the person simply stays there, typically from the shock of the event, and there is fawn, where the person tries to eliminate the danger by pleasing the person or thing that caused the danger. As the games progress, all of the players experience these different types of survival stress as they respond to different types of danger.

Cognitive Dissonance

When faced with the stress of mere survival, all players are confronted with the same question: how far would you really go to survive? For some, they may not be willing to sacrifice a lot, leading them to be eliminated early on. For others, however, they do sacrifice a lot to survive, even if it’s against their personal beliefs. Cognitive dissonance is the discrepancy between one’s inner beliefs and their actions. Have you ever done something you knew was wrong but kept doing it anyway, and how did you deal with it? Generally, people treat it similarly to how they treat moral injury: either in a healthy manner such as self-care, or in an unhealthy manner, like in Minsu’s case: substance abuse. In Squid Game, seasons 2 and 3 show the “Thanos group” using mind-altering pills. Initially, Minsu hated drugs and had no desire to become even remotely affiliated with them. His actions aligned with his beliefs at this time, and he did not take the drugs. However, after his best friend died, he started to take these pills to cope with the pain. While on the pills, Minsu hated himself a lot, leading him to hallucinate his best friend, get distracted, and eventually be eliminated. Cognitive dissonance takes different forms, depending on the type of action and belief they have broken. Different actions will bring on different reactions, such as second-guessing for major decisions, and self-justification for bad decisions.

Economics Behind Squid Game: How Economics and Survival Collide

Opportunity Cost and the Harsh Alternatives

Opportunity cost is all about what you give up when you make a choice, and in Squid Game, it is on full display. For contestants, not playing the game means returning to crushing debt, poverty, or even worse fates, making the risk of death in the game comparatively acceptable. The chance to escape destitution and win vast wealth outweighs the deadly gamble, turning choices that seem irrational from the outside into rational responses to desperate circumstances. Every contestant is constantly weighing the opportunity cost of playing versus not playing. Refusing the game comes with the certainty of suffering, while playing carries the risk of death but the potential for total financial freedom. Comparing these harsh alternatives makes it clear why refusal is rarely a real option. Next time you make a decision, big or small, notice how you think about your own opportunity cost (what you are giving up with every choice) and you will understand why you and many other people are often indecisive. 

Game Theory and Strategic Decision-Making

Game theory studies how people make decisions when their outcomes depend on what others do, making it a key concept in economics because it shows how rational choices unfold under scarcity and interdependence. Some key ideas within game theory include cooperative strategy, zero-sum games, and sequential games. In Squid Game, every game illustrates these concepts. For example, season 1’s tug-of-war had a counterintuitive result: the stronger team didn’t win. The reason the stronger team didn’t win over Gi-Hun’s team, which included an old man, is their lack of cooperative strategy. The “weaker” team succeeded through perfect timing and teamwork, a classic example of cooperative strategy. Later in season 1, the marble game forced players to pair off and take all of each other’s marbles to survive at the cost of their partner’s life. This game is a zero-sum game: for one player to survive/win, the other must die/lose. Finally, the glass bridge challenged players to cross one at a time, choosing between two panels, one that would hold their weight and one that would break, giving them a 50 percent chance of survival. This is an example of a sequential game, where each decision depended on the successes and failures of the person ahead, shaping the next player’s strategy and risk assessment. Such strategic uncertainty discourages players from collective refusal because if some refuse but others don’t, those who continue will eliminate the people who refuse to move forward out of fear, creating a powerful disincentive to say “no.” The next time you negotiate, work on a team, or face a competitive decision, notice how cooperative strategies, zero-sum dynamics, and sequential thinking shape your choices.

Asymmetric Incentives and Power Imbalances

In Squid Game, the powerful VIPs watch from above, placing bets and profiting from deadly contests while never risking a single life. The players, on the other hand, put everything on the line for just a slim chance at the enormous cash prize. This setup is a clear example of asymmetric incentives, where risks and rewards are distributed unevenly. The people with the most power face almost no risk but reap the largest benefits, while the most vulnerable bear nearly all the danger for the smallest chance of reward. This imbalance shapes behavior and traps the contestants in the game. They continue playing not only because of desperation but because the rules are stacked against them, creating a cycle where the powerless must keep participating to survive, while the elite continue to profit without consequence. It mirrors real-world systems where inequality funnels risk to the marginalized and advantages to those already in power.

Conclusion

Squid Game is more than thrilling entertainment. It shows how stress and economic pressure shape human behavior. Players risk their lives, betray friends, and endure extreme tension. How would you act in their place? From moral injury and cognitive dissonance to opportunity cost and power imbalances, the show reveals how scarcity and fear drive decisions that test morality and trust. Next time you face a tough choice, ask yourself what pressures you are under, what you are giving up, and how risks and rewards shape your actions. Understanding these forces helps us navigate high-stakes decisions even when they are not life or death.