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I read about game design. It is sort of like the nicotine patch for the ex-WoW gamer in me.

See slides 27 ~ 33:

http://www.slideshare.net/amyjokim/putting-the-fun-in-functi...

I actually feel that leaderboards are mostly bad only when there are too many people participating. With a small enough number of participants they can be motivating (although they might be better yet if they were opt-in). There are a subset of people that like to rank themselves and "see how they stack up" against others. As you mentioned, it can also degrade motivation for others which is why an opt-in method might work best for something like this.

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