From a Monopoly Veteran

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I have been playing Monopoly since before 1950.

Aside from the fun, it provides one of the best ways to introduce the idea of marginal to an intro economics class; and because I’m not teaching my giant section of intro microeconomics this year (the first time since 1980/1981), I miss both teaching and Monopoly.

Each Monopoly property gives a payoff when an opponent lands, with the payoff rising from double the rent if you have a monopoly with no houses, up to a maximum total return with a hotel (five houses).

On a given property, each house costs the same; for example, on New York Avenue, my favorite property, a house is $100. But the marginal return to a house is not constant: it rises steadily with the first, second, and third houses and then falls with the fourth and fifth.

This dictates strategy: if you have two monopolies and limited resources, even though the big red hotels are pretty, you are better off building equal numbers of houses on both monopolies, rather than hotels on one and nothing on the other.

Here’s one other economics lesson that is well known to Monopoly veterans: better a monopoly on the farther end of each side of the board; the houses cost the same on each side, but the payoffs at the farther end are greater.

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  1. Craig says:

    The problem with (and beauty of) the 3-houses-per-property strategy is that there is a fixed number of houses available (32), and if there are no houses available, you can’t build one. Thus if you have the properties and cash, you can starve your opponent of houses. Alternatively, you may find that you have to build hotels in order to free up houses for your other properties.

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  2. frankenduf says:

    the real profound question is: what’s better pacific/nc/pa or pp/bw? (please expedite answer- I’ve lost serious sleep on this one)

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  3. PMcCafferty says:

    Another tip: Use the iron as your token. The iron has the lowest profile so the other players are less likely to notice when you land on their properties.

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  4. Jake says:

    Craig, you are dead on! I play Monopoly with relatives at holidays and we have gotten to the point of cut throat strategies like the one you describe. Sometimes we get into bidding wars for those last fews houses, and this determines who wins the game.

    Also, I take exception to the point by Danial that the further down the board the better the monopoly. The Dark Red monopoly is much better than the Yellow monopoly even though it pays less. There is a chance card for Illinois Avenue while there is no card for the Yellows. Also, many more people tend to land on the Reds coming out of jail and are often bankrupted, thus giving you all their property.

    My personal strategy is try to get the R.R.’s (lots of chance cards) and one good monopoly and sell the rest.

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  5. Jake says:

    #2 – My personal belief is that PP/BW are much better: less overhead cost, chance card for BW, better position in relation to jail, and higher payouts. The dark green is the worst monopoly on the board, no question.

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  6. MPD says:

    @2 frankenduf: Going by Historical data, I’ve never lost a game where I owned all the Greens. Plus if you’re a monopoly nerd like I am, you’ll like this page which does the whole markov analysis of the board. In either the “long jail” or “short jail” scenarios, the sum of the expected value of the Greens is greater than the sum of the expected values of the Blues.

    http://www.tkcs-collins.com/truman/monopoly/monopoly.shtml

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  7. science minded says:

    Dear Frankenduf;

    OkOK- what is the strategy? I stated – enough 8/21/08- and was granted my wish for a fair fight- as in enough is enough- In addition to the treasures already found, I find myself at the fifth dimension- so you science minded types out there ought to be excited- as i am- as it will be your work to sort most of it out–But am I not entitled to allow all my readers to be so curious to want to read my book-

    Heh- monopoly is monopoly- it can go on forever- but in real life- I cannot- there is such a thing as running out of time and money, a need for work, to afford health benefits, to stay connected with/take care of family and friends and a vacation. so back to work til it’s done-

    Bye for now.

    Yours very truly RAG (2008, All rights reserved)

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  8. HM says:

    Craig and Jake,

    I couldn’t agree more! I was banished from family monopoly games as a child for using this strategy. I pointed to the rules, but family members said that it was unfair! I was hoping that other readers of this blog would point that out. My favorite are the light blues – you can lay claim to 12 houses very cheaply.

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