This is where a fairly arcane theory in psychology comes in. Antonio Damasio is a neuroscientist best known for his book Descartes' Error, which influenced a whole generation of thinkers in psychology (myself included) to take emotion more seriously as a positive and functional force in thought. His 1999 book The Feeling of What Happens is less well known. There, he uses the neuroscience of the day to construct a three-layered model of consciousness and the self.
The third layer of self is the autobiographical self, and it is deeply tied in with the human capacity for self-reflection and language. It lets us plan for the future, look to the past, and construct a story about who we are and where we're going.
I put it to you that in a game, players are most eager and comfortable to:
- express their character when the autobiographical self is called on, and
- express themselves when the core self is called on.
But not player autobiographical self. When a player spins stories about what happened to them in another game last year, or about this really great pizza place they went to last week, or goes on at length about this Savage Worlds campaign they're planning ... Well, some players do that, but it gets old fast. And a joke that gets older fast - hell, was born old - is when the NPC asks you "Who are you and where are you going?" and you break the frame thusly: "Well, I'm Josh Schmenge and after this game I'm going to drive home, eat a bowl of cereal, and go to bed."
And player core self. This is when six wights come barreling down on the party's paladin and his player yells "Ohhhh shit!" That's not inappropriate, even thought the contrast between the Lord's knight and the cursing player is funny. In a way, the genuine emotion gives homage to the realness of the situation for the player. Likewise, we cut players some slack for rejoicing according to their native customs when they find the huge treasure horde or defeat those wights.
It's not just emotion. When danger looms, players often go into an analytic mode that calls out the rules and moves in a way the characters never would. Some DMs frown on this, but nobody can stop it completely. Also, it's not satisfying to the players if you force them to act 100% in-character at those times. They would feel like the play-acting was getting in the way of what really engages them - ensuring their beloved character's survival. Maybe this represents the speeded-up processing that high emotion facilitates?
But not character core self. Who do you have more tolerance for - a player who nearly gets your whole party killed because they're roleplaying an incompetent, impulsive fool, or the same situation where the player just is an incompetent, impulsive fool? Hm, yeah, thought so. D&D is still not a role-playing game ... when the adventure's at stake.