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Lessons from Monopoly


"If people want to understand what's happening with this foreclosure crisis, they should just play Monopoly."

Logomrmonopoly That was the word from my uncle Mark on Sunday night, after a group of five of us finished a spirited two-hour game of Monopoly, the popular board game from Parker Brothers.

He had a point. Though the game started benignly enough, it soon devolved into a bitter competition, with family-members scheming against one another, and grovelling for loans.

Here's a breakdown of the game, and its lessons:

  • The strategy from most players seemed to be: "Buy property early." This meant cash reserves soon dwindled, but players accrued a spattering of properties, most of them unrelated.
  • After 20 minutes or so, the first monopolies formed, either through a player's luck in landing on all the related spaces, or some wheeling and dealing. But with cash still in short supply, players with monopolies moved slowly to build houses and hotels.
  • Once my 12-year-old cousin developed hotels on several of her properties, the ante was upped. Landing on one of these properties meant having to fork over nearly $1,000. As a result, the other players were pressured to build hotels of their own. Here the board game and reality started to converge -- when you look around and see all your neighbors getting rich on real estate, you're pressured to do the same. The real estate market becomes a feeding frenzy.
  • Soon enough, players were landing on hotels, and bills came due. But after spending on property, houses and hotels, we were all strapped for cash. As a result, we had to "mortgage" our properties, handing them over to the bank for a fraction of their value, just so we could pay our debtors. This is akin to taking out a second mortgage on your house to pay for a vacation at s Sandals resort.
  • After a few rounds of mortgaging our properties to pay our bills, some players were out of cash. So when my uncle landed on a hotel and owed his wife $1,275 but had no cash, he offered her a grab-bag of unrelated properties. But at this point, those properties were essentially worthless. No one wanted to taken on more more real estate, especially if it was already mortgaged. In other words, home prices were falling, and no one was buying.
  • Still, bills were due, and my aunt, cousin and friend soon went bankrupt, forking over their last few dollars and worthless property to either me or my uncle. From there, we duked it out, one roll at a time. I caught the lucky breaks, with Mark landing on more of my properties than the other way around. After two hours, he was toast.

I'll admit, it was a bit of a rush to win at Monopoly. But looking around at my bankrupt, propertyless family was no fun. As in real life, even the victors don't feel great these days. And while I had a pile of Monopoly money, I wondered how much it was really worth. With no one to trade with and nothing left to buy, what's cash really worth? If only they had not Monopoly money, but Monopoly commodities.

Posted by David Gelles at 12:26 PM on November 4, 2008 | Permalink | Facebook | Digg | del.icio.us | AIM


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