AbstractWith the worldwide popularity of online games, game addiction is a serious social issue. To address online game addiction problems and pursue the steady growth of the online gaming industry, we propose and evaluate two policies using a system dynamics approach: a self‐regulation policy and a tax and rebate policy. Through our analysis, we demonstrate that the tax and rebate policy can be a very effective policy measure. Contrary to the concern of most game companies, by implementing the tax and rebate policy while the total revenue of the online gaming industry increases slightly, the social image of gaming improves and the number of addicted game users decreases. This clearly demonstrates that restricting excessive use of games actually benefits online game companies as well as society in general, and that the system can be more efficiently implemented by the tax and rebate policy. Copyright © 2010 John Wiley & Sons, Ltd.