Monopoly(tm) is Parker Brothers' classic game of ruthless business. The object is be the last player to avoid going bankrupt. To do this, one purchases properties and then charges the other players rent whenever they land on one of them. You can improve your properties by buying houses and hotels. The most expensive properties on the board are Boardwalk and Park Place.

Monopoly's mascot is Rich Uncle Pennybags. Many words and phrases from the game are recognized throughout the world: "Take a ride on the Reading," "Advance token to Boardwalk," "Water Works," "Free Parking," and most famously, "Go directly to jail; do not pass Go; do not collect $200."

An extremely popular board game during The Great Depression (see Black Tuesday). People would gather in a circle around the game board, and fantasize about being rich and owning the various game pieces (a car, a top hat, etc.). Kids would fight over who got to be the banker, the one that got to handle the most cash. It was a way for people to escape, and hope for the future.

Contrary to popular belief, Monopoly was not invented by Charles Darrow. In 1904, more than a quarter of a century before Darrow's game, U.S. Patent 748626 was awarded to Lizzie J. Magie for The Landlord's Game, which she devised as political propaganda for the theory that the rent market conferred monopolistic advantages on the landowner. The game quickly spread through the Quaker community under the name Monopoly, with many people adapting the rules and renaming the squares to local placenames.

In 1931 Charles Darrow was taught a variant of the Monopoly game, based on placenames in Atlantic City, by an acquaintance, one Charles E. Todd. By the end of 1935, Parker Brothers had sold hundreds of thousands of copies of a game Darrow claimed to have invented.

Darrow was not even the first to attempt to market the game commercially. After Monopoly became a gigantic success, Parker Brothers discovered and bought out not only Lizzie Magie's original patent but also "Finance" by Dan Layman and "Monopoly" by Luis Thun. (Dan Layman, ironically, had changed the name on legal advice that he could not trademark Monopoly since the game was already known in the community by that name.)

To preempt speculation, Parker Brothers subsequently moulded the story of Monopoly's invention into an American legend which they began to print on Monopoly boxes. The truth only came to light in the 1970s when Parker Brothers challenged Ralph Anspach's game Anti-Monopoly for infringement of trademark, provoking Dr. Anspach to investigate Parker Bros.' legal claim to the word.

References:

Contrary to popular belief, the Monopoly rules have not always been the same. There were some slight changes made to the "Chance" and "Community Chest" cards over the first decade of the games production. These changes may seem minor, but they are enough to substantially alter the statistics of the game. The main effects the changed cards had was to pump up the value of the railroads and utilities, while slightly reducing the value of the light blue properties.

Cards that were removed from the game
  • Go Back to Baltic Avenue
  • Parking Fine $15.00
  • Pay a $10.00 Fine or Take a "Chance"
  • Pay Your Insurance Premium $50.00
  • We're Off the Gold Standard Collect $50.00
Cards that were changed
  • Pay Poor Tax of $12.00 (changed to $15.00)
  • Pay School Tax of $150.00 (used to be a "Chance" card)
  • Second Prize in a Beauty Contest Collect $11.00 (changed to $15.00)
  • You are Assessed for Street Repairs (used to be a "Chance" card)
Cards that were added
  • Advance Token To Nearest Railroad
  • Advance Token To Nearest Utility
  • Collect $50 From Every Player
  • Pay Each Player $50

Other minor rules revisions included changing the rent on Marvin Gardens from $22 to $24, and changing the income tax square from $300 or 10 percent to $200 or 10 percent.

This writeup only applies to the American version of the game, as I don't believe any of the non-US versions came out until the rules were solidified.
Another phrase known all over the world is the much-feared "hotel on Mayfair". It comes as a great surprise to many people all over the world that there's an American version of the game, which doesn't use the familiar London streets, and that in fact the one set in Atlantic City is the original.

(And of course it's always rather a shock to Australians when they eventually get to London and find the streets aren't joined up like this in real life.)

These are the streets on a Monopoly board -- well, the only Monopoly boards I've ever seen. People might like to chip in with other versions.

bottom
Old Kent Road
Whitechapel
Kings Cross Station
The Angel, Islington
Euston Road
Pentonville Road
left
Pall Mall
Whitehall
Northumberland Avenue
Marylebone Station
Bow Street
Marlborough Street
Vine Street
top
Strand
Fleet Street
Trafalgar Square
Fenchurch Street Station
Leicester Square
Coventry Street
Piccadilly
right
Regent Street
Oxford Street
Bond Street
Liverpool Street Station
Park Lane
Mayfair

Angel Islington and Mayfair are actually districts: there is no such street as either.

There are many geographical "local" versions of Monopoly. I have in my possession a Hong Kong version, with local streetnames in both Chinese and English, and with a double set of cards, one in each language.

There are also many special versions, including a Star Wars Monopoly - and let me tell you, there's nothing like actually owning Tatooine to make you feel like a Hutt.

During the 1950s, a very similar game was produced in Denmark, called Matador (in Danish, matador is the equivalent of "tycoon"). It is still being produced today, and has so many similarities that the term knock-off is completely justified. Even so, it's a nice game. It was so popular in Denmark, in fact, that it took decades for the real Monopoly to break into the Danish market. Today, Monopoly is being sold in Denmark under the English name, to avoid confusion with the copy.

Oh yes, and the Danish phrase which completely corresponds in meaning to the phrase "Monopoly money" is Matadorpenge - "Matador money". And yes, there's an equivalent Matador-related phrase for "hotel on Mayfair", namely hotel på Rådhuspladsen - "hotel on the Town Hall Square".

The squares most landed on in an average game of Monopoly are:

    British board:
  1. Trafalgar Square (Red)
  2. Go
  3. Fenchurch Street Station
  4. Free Parking
  5. Marlborough Street (Orange)
  6. Vine Street (Orange)
  7. King's Cross Station
  8. Bow Street (Orange)
  9. Water Works
  10. Marylebone Station

    American board:
  1. Illinois Avenue (Red)
  2. Go
  3. B. & O. Railroad
  4. Free Parking
  5. Tennessee Avenue (Orange)
  6. New York Avenue (Orange)
  7. Reading Railroad
  8. St. James Place (Orange)
  9. Water Works
  10. Pennsylvania Railroad

I don't have my hands on the relative percentages yet, but I'd be interested to hear from anyone who does.

Many players new to Monopoly automatically assume that each square has an equal chance of being landed on. However, this is certainly not the case, due to a number of features of the rules. To outline the main ones:

The Jail

There are a large number of ways to end up in jail: landing on Go To Jail, getting a Go Directly To Jail card, or rolling three consecutive doubles. Once you go to jail, you are forced to go past the orange squares again, which greatly increases the likelihood of landing on them and thus partially accounts for the presence of all three orange squares in the top 10.

The Chance and Community Chest cards

As with the jail, these distort probabilities by sending you directly to certain squares. These two square types account for 6/40 = 15% of squares, and 30% of the cards require moving the piece to a new square, so these cards clearly have quite a large effect. That stat was based on my own set which is probably missing some cards.

Unequal probabilities of each dice score

One die has an equal chance of turning up any of the six scores, but with two dice, there is a 1/6 chance of getting a total of 7 but only a 1/36 chance of getting a 2. The reason for this is high-school probability theory: there are six ways of making 7 with two dice (1+6, 2+5, 3+4, 4+3, 5+2, 6+1), but only one way of making 2 (1+1). Therefore, landing on squares that are multiples of seven from Go is more likely.

This is largely counter-acted, however, because 40mod7 = 5; in other words, once you complete a full circuit of the board, the typical starting square is different, and the uneven distribution of the dice rolls is less important. So this is not as important a reason as you might think.

How was this worked out?

It's a very simple computer simulation. You work out the average number of goes in a game, then leave the computer to play a large number of games, of that length, with itself. At the end, you should have a good idea of which squares are landed on most, by way of a simple tally. Fortunately, the element of choice in where you actually land on the board is very small, so the computer needs little in the way of AI.

Data source: The Top 10 of Everything 1997

My strategy for Monopoly is as follows:

  • On your first turn, you will most likely land on one of the light blue properties. BUY IT. Do all that you can to get the rest of the light blue properties as the game progresses.
  • As you make your way around, try and buy at least one property from each colour-group. This will decrease everyone's chances of getting a full colour-group and increase yours.
  • Railroads - I find that as soon as I buy two I have a larger interest in buying the others. If you only get one and only one more is up for grabs, make that a secondary priority. I do not, as a rule, express any interest at all in utilities. Cheap bastards.
  • Once around the board now, and hopefully we haven't landed in jail. If so then we're down a couple of turns, and $50. Anyway, we have just scored $200 for passing Go, and we have also hopefully landed on one of the brown properties. Try to buy them both, then put houses on it FAST AS YOU CAN. Do not put hotels on at this stage - you want to create a housing shortage.
  • Say we've gone around a few more times now. You own all of the bottom "street", as I call them, and someone else owns a colour-group that is either orange, red or yellow, despite your efforts. Now it is time to upgrade houses to hotels. It is definitely worth it as you will get anywhere between $250 and $600 rent each time someone lands on them. This makes it difficult for the other(s) to build houses.
  • If playing with three or more players, try and focus on the one who is losing first and hope to the Monopoly Gods that they will land on your property when they go bankrupt and not anybody else's. Their properties will turn over to you and your empire will expand.
  • If all goes well, by the end there will be a huge empire. This is when you should take one house away from the hotels so that they remain as expensive as possible, but you can build hotels on the more expensive properties. If it is only you and a mate playing, keep the hotels on the properties you have - hopefully you own one street or at least half of all the properties.
  • If all doesn't go well, just try and survive as much as you can. I once played a game that lasted 5 lunchtimes (which are about 40 minutes each) and I only lost at the last minute. If you survive, the greater your chances are of landing on a property with hotels, but you also get time to nut out tactics.
  • Best of all, have a bit of good luck on your side. I'm not saying to go out and buy a lucky charm or whatever - mainly because I'm a skeptic - but luck is an idea. (DO NOT say the word "luck", otherwise it might go away...)

A monopoly is a market situation in which one firm has at least 25% control over production and pricing, and in which other firms are prevented from competing due to barriers of entry. The monopolist is therefore able to charge whatever price it wishes and restrict its output when necessary. This behaviour maximises profits for the corporation, but is not in the interest of the consumer.

In practice, it is very rare for a true monopoly situation to arise, as competition from alternative product often exists. If there is a near-monopoly situatuin, the government will often intervene and nationalize the firm.

What qualifies as a field in which the alleged monopolist is the sole producer?

If one defines a field as narrowly as possible, then every producer is a monopolist because each makes a slightly different product. If one defines a field as broadly as possible, then every product competes with every other because people place all products on a single scale of values and choose some at expense of others. In the former view, a McDonalds' Big Mac doesn't compete with a Burger King Whopper. In the latter, it competes with Microsoft Windows. One can identify that Microsoft has a monopoly on Microsoft Windows, almost has a monopoly on operating systems, and isn't even close to having a monopoly on software, but one can't objectively decide which of these identification should determine Microsoft's legal status.

If one wants to, one can define every producer or no producer as a monopoly.

Monopoly is a situation in a market when one firm produces a good with no close substitutes and is protected by barriers to entry into the industry by other firms. For example, closest examples to a monopoly are held by companies like De Beers, Microsoft and ICBC.

This is a situation that is the complete opposite of that of perfect competition in which the firm which controls the monopoly exercises a complete ability to influence the market price by varying the quantity. The firm is not a price taker and exercises complete market power.

As stated, in a monopoly, there are two main points:
1) There are no close substitutes
2) Barriers to entry

Examples of items with no close substitutes is water. While for drinking, bottled water like Evian might subside, nothing comes to public water when doing activities such as showering, and washing cars.

Barriers to entry are essential as they essentially eliminate competition by simply not allowing others into the field in question. This can either a Legal monopoly or a natural monopoly.

A legal monopoly is a monopoly achieved by the restrictions of the government, which either hinder entrance or competition. Such activities are accomplished by such items like legal licenses (lawyer licenses, medical licenses), public franchises (US mail, Canada Post), copyright, and patents.

A natural monopoly is achieved when natural barriers to entry are imposed and generate a situation when one firm can generate a good or a service at a cost to the consumer which is less than if multiple firms do so. Such an instance is BC Hydro.

Since monopolies can establish their own prices, they must use particular strategies to maximize profit. Two such instances are single price monopoly and price discrimination. With a single price monopoly, since there are price differences, it may lead to resale by the low value customers. Price discrimination on the other hand, is used more often as it does two things:
1) Makes it look like they're doing the consumer a favor by lowering its price to certain consumers, therefore increasing consumer satisfaction
2) Charging the highest possible price for each unit, therefore creating a situation of rent seeking.

Using the elasticity of demand, one can determine that monopolies only operate when the elasticities are higher than 1, or are elastic. This is because for any market to sell more of a quantity, they must lower the price. In a situation of elastic demand, the income lost due to a decrease in price is offset more by the increase in income by the quantity consumed by the public. When it is unit elastic or elasticity of demand = 1, the marginal revenue is equivalent to zero and is the maximum total revenue.

In turn, monopolies will generally produce at a quantity and price where marginal revenue is equivalent to marginal cost. In this situation, they maximized their economic profit, which is equivalent to their total revenue - total cost.

In comparison to a perfect competition, a monopoly only involves one firm in a business. They have sheer market power, which they exercise by limiting their output and therefore increasing economic profit. Also in the long run, monopolies generate economic profit, while the price takers in the perfect competition only generate enough to cover their entrepreneural costs to stay in business. In addition, as a result of their limiting their production, they create an inefficiency, which in turn generates deadweight loss.

With the self imposed restrictions on output by a monopoly, they generate inefficiency and deadweight loss. But they also generate a redistribution of surplus, which offsets the social loss that is generated by deadweight loss. In rent seeking, monopolies attempt to capture as much of consumer surplus, producer surplus or economic profit. Monopolies generally incur a greater economic profit by diverting consumer surplus to itself. They do this by either creating another monopoly or buying one. They are mainly able to rent seeking by price discrimination.

To properly price discrimination, they must be able to identify each demographic consuming their good and their good must not be able to be resold. When they price discriminate properly, monopolies increase their economic profit by converting consumer surplus to economic profit. In situations of perfect price discrimination, they extract all of the consumer surplus for themselves. Their marginal revenue curve becomes equivalent to the demand curve. In addition, only during perfect price discrimination is there efficiency during a monopoly as there is no deadweight loss, even though there is no consumer surplus]. The more closely a monopoly can emulate perfect price discrimination, the more efficient the outcome.

While the power exercised by monopolies are considered by some as overwhelming, they do provide some advantages. One is that due to economies of scale and economies of scope, natural monopolies can occur. Further more, they give a higher incentive to innovate and invent something different as a monopolistic power would allow them great economic profit.

Monopolies are not typically allowed to frolic on their own. They are usually regulated by government agencies (such as cases like Microsoft). They either allow marginal cost pricing or average cost pricing. In marginal cost pricing, the monopoly incurs an economic loss, which they can either offset with a subsidy. In most cases, they allow average cost pricing, where they allow the monopoly to make a normal profit. In that case, both consumers and producer gains more than compared to a profit maximizing or marginal cost pricing.

Below is a summary of the title deeds for the properties on the Monopoly board. (I am using the names of the properties in the American version of the game.)

For the regular properties:


                                   Rent   With   With   With    With              Cost
                                    w/o     1      2      3       4     With       of    Mortgage
                        Price      house  house  houses houses  houses  HOTEL     house   value

Purple
 Mediterranean Avenue    $ 60      $ 2     10     30      90     160     250      $ 50    $ 30
        Baltic Avenue    $ 60      $ 4     20     60     180     320     450      $ 50    $ 30

Light Blue
      Oriental Avenue    $100      $ 6     30     90     270     400     550      $ 50    $ 50
       Vermont Avenue    $100      $ 6     30     90     270     400     550      $ 50    $ 50
   Connecticut Avenue    $120      $ 8     40    100     300     450     600      $ 50    $ 60

Fuchsia
    St. Charles Place    $140      $10     50    150     450     625     750      $100    $ 70
        States Avenue    $140      $10     50    150     450     625     750      $100    $ 70
      Virginia Avenue    $160      $12     60    180     500     700     900      $100    $ 80

Orange
      St. James Place    $180      $14     70    200     550     750     950      $100    $ 90
     Tennessee Avenue    $180      $14     70    200     550     750     950      $100    $ 90
      New York Avenue    $200      $16     80    220     600     800    1000      $100    $100

Red
      Kentucky Avenue    $220      $18     90    250     700     875    1050      $150    $110
       Indiana Avenue    $220      $18     90    250     700     875    1050      $150    $110
      Illinois Avenue    $240      $20    100    300     750     925    1100      $150    $120

Yellow
      Atlantic Avenue    $260      $22    110    330     800     975    1150      $150    $130
       Ventnor Avenue    $260      $22    110    330     800     975    1150      $150    $130
       Marvin Gardens    $280      $24    120    360     850    1025    1200      $150    $140

Green
       Pacific Avenue    $300      $26    130    390     900    1100    1275      $200    $150
North Carolina Avenue    $300      $26    130    390     900    1100    1275      $200    $150
  Pennsylvania Avenue    $320      $28    150    450    1000    1200    1400      $200    $160

Blue
           Park Place    $350      $35    175    500    1100    1300    1500      $200    $175
            Boardwalk    $400      $50    200    600    1400    1700    2000      $200    $200

A hotel costs the same as a house, but the property must have four houses on it already to buy a hotel.

If a player owns ALL the Lots of any Color-Group, the rent is Doubled on Unimproved Lots in that group.


For the railroads (Reading Railroad, Pennsylvania Railroad, B. & O. Railroad, Short Line Railroad):

Rent if one railroad is owned     $ 25.
     if 2 R.R.'s are owned          50.
     if 3 R.R.'s are owned         100.
     if 4 R.R.'s are owned         200.

        Mortgage Value            $100.
        Purchase Price            $200.

For the utilities (Electric Company and Water Works):

If one "Utility" is owned rent is 4 times amount shown on dice.
If both "Utilities" are owned rent is 10 times amount shown on dice.

Mortgage Value       $ 75.

Purchase Price       $150.

Mo*nop"o*ly (?), n.; pl. Monopolies (#). [L. monopolium, Gr. , ; alone + to sell.]

1.

The exclusive power, or privilege of selling a commodity; the exclusive power, right, or privilege of dealing in some article, or of trading in some market; sole command of the traffic in anything, however obtained; as, the proprietor of a patented article is given a monopoly of its sale for a limited time; chartered trading companies have sometimes had a monopoly of trade with remote regions; a combination of traders may get a monopoly of a particular product.

Raleigh held a monopoly of cards, Essex a monopoly of sweet wines. Macaulay.

2.

Exclusive possession; as, a monopoly of land.

If I had a monopoly out, they would have part on 't. Shak.

3.

The commodity or other material thing to which the monopoly relates; as, tobacco is a monopoly in France.

[Colloq.]

 

© Webster 1913.

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