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The word avatar is adapted from the Sanskrit for “descent,” used to describe a Hindu god emerging from the heavens and bodily manifesting itself in order to intervene in human affairs. Generically, the term can refer to any representation of a person. Names, online profiles, and dolls can all be considered types of avatars by this broad definition. Neal Stephenson's science fiction novel Snow Crash popularized the use of the word, as it is commonly understood today, to describe a digital representation in a virtual environment. Commonly, avatars are used to represent people in Internet chat, video games, social virtual worlds, massively multiplayer online role-playing games, social networking sites, and other mediated contexts.

Avatars are distinguished from agents, another form of digital representation, by the element of control: Avatars are controlled by human users, whereas agents are controlled by computer algorithms. For example, in single-player video games, the player at the controls is represented by an avatar, whereas the other characters on the screen are agents controlled by the computer.

One function of avatars is to help the user parallel the virtual world with the familiar physical world. For example, a user may have a photographic avatar attached to a chat interface to approximate a face-to-face interaction or may use an avatar with a human form to navigate virtual space or engage virtual objects, agents, or other avatars. Avatars may also be used to facilitate communication. Whether through a simple smiley-face icon or a highly realistic virtual human, avatars may help virtual communication more closely resemble the richness of face-to-face communication by allowing users to convey nonverbal as well as verbal messages. When selecting an avatar for a virtual world, users can often demonstrate sex, gender, group affiliation, social identity, interests, goals, or personality traits through their choice of representation. Additionally, avatars may be manipulated to express and convey emotions.

Avatars also present users with the opportunity for an experience beyond mere exposure to mediated imagery. Users embody avatars, controlling the movements and interactions of the representation; thus, the avatar becomes a proxy for the physical self in the virtual world. The ability to design and customize an avatar, combined with the time spent using the avatar, often leads users to develop a strong affinity for an avatar. Indeed, avatars have been shown to increase users' identification, or sense of being similar to someone, which has been linked to changes in beliefs, attitudes, and modeling behavior.

In some environments, users are constrained to choose among a set of avatars; in others, they are free to choose or customize their representation. In custom environments, users may choose an avatar of either biological sex or one that is androgynous. Regardless of the chosen sex, the avatar may be outfitted with clothing, weapons, or accessories that may or may not be gendered. The user may also determine how accurately the avatar reflects his or her physical appearance. Thus, the creation of an avatar enables a user to explore the spectrum of gender portrayals, whereas in forced-choice environments, users may be constrained to stereotypical representations.

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