Robert Smith of NPR released a fascinating article entitled “Monopoly Game: Rules Made To Be Broken?” In this article he plays the old family favorite game with two economists and highlights similarities between the game and recent events with our economy and real estate market.
If you think a regular Monopoly game takes forever, try playing with two economics professors. Just picking out the game tokens prompts a lesson in choice theory. According to one of them, it “illustrates a tremendous diversity of preferences in people, even about something as mundane as this.”
Smith sat down with Dan Hammermesh, University of Texas at Austin (Token of Choice: Top Hat) and Russ Roberts, George Mason University (Token of Choice: Car). Hammermesh played it safe, avoiding the purchase of utilities and green-colored properties, while Roberts hopped in his pewter car token and raced around the board, swooping up anything he landed on.
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Hammermesh found multiple positive lessons about the game.
“You learn decision rules, and maybe a little bit of optimizing under constraints,” Hammermesh says. “Because the 1,500 bucks, you’ve got to make choices. And learning, for example, with 1,500 bucks, not to go buying railroads as Russ just did.”
Roberts, on the other hand, does not hold the game in such high of a light and views it as warped capitalism. The sole goal is to tear your opponents to the ground. Roberts explains that by the chance of dice you can land on a property and have to pay a landlord that you don’t know and you’re stuck to losing money with no gain. He views it as an unrealistic lesson. However, this does not stop Roberts from cruising around the board and trying to cream his own opponents.
Many believe the original Monopoly game originated during the Great Depression however the original version of this game was patented in 1904 by Elizabeth Magie entitled, The Landlord’s Game. The purpose of the game was to show how you could earn money solely from owning property and how property owners could bankrupt their renters.
In the 1930s Parker Brothers purchased the patent and a legend was born. Monopoly’s the name. Driving people out of business is the game.
In current times those who have invested in real estate as a sure thing for income are seeing a very different perspective from the game itself. In the game, “the bank can never run out of money, mortgages are easy to get, and when you build houses the rent always goes up.” As times get tough and profits are few and far between it’s no surprise that like the players in monopoly, people start “wheeling and dealing”.
Roberts offers up a share of the income from one of his properties: “It’s a sure thing; it’s triple-A.”
“I view it more like a Greek government bond,” Hammermesh says. “I’m afraid I can’t take it.”
It turns out that when you bend the rules, Monopoly starts to feel like a very shrewd educational tool. Now they’re negotiating and thinking creatively.
Roberts, for instance, offers to bump up the rent on Mediterranean Avenue if it’s taken off his hands.
“The rent will not be the stated $250 — it will be $750,” Roberts says.
Legitimately this can’t be done but it doesn’t mean it doesn’t happen. This just goes to demonstrate the sort of negotiations that are taking place in this classic game and our real world.
You can listen to the entire story here: