A great game/exercise to learn character development is Bus Stop. Here's how it works:
1 person sits on a bench, physically developing a character for a few seconds. The director rings a bell to signify that the bus has come. A new character comes onto the scene, and the 2 characters begin to interact.
After about 30-45 seconds, the bell rings again--signaling that the bus has come again. Every time the bus comes, one character leaves, and another comes on.
This is a great exercise because it allows people to develop numerous characters, and see how they interact with different personalities. For example, my "gangster" character had a hard time interacting with older pushy people because I held back from killing them when they didn't give me their money.
Now I know, if I'm going to up the ante and utilize such a high status character, I better be ready to back it up.
Although I prefer this game as an exercise, I suppose it could make a decent performance game if the scenes were kept moving. Still, a certain level of gag seems necessary, as most realistic bus stops I've been to mostly involved standing around, ignoring each other.