Aaron Kuttler

Mr. Wilson
Economics Term Paper
December 10, 2015
Microeconomics of Monopoly
I am the undefeated champion at the family board game Monopoly, I have been since I
was very young. The game intrigued me, it motivated me, and it made me think in ways I did
not normally think.

I had to think multiple turns in advance, I had to learn how to work the

other players in making trades that would in the long run enable me to control the market.
Because of my passion towards the game monopoly I have been anxiously anticipating chapter
seven in our book Essentials of Economics, dealing with Monopolies. After reading the chapter
I learned that there is actual science and reasoning behind the thought process I have while
playing monopoly. Such thoughts as deceptively working with other players to give myself a
market power by creating a duopoly. In some cases I have watched the game transition from an
oligopoly to a monopoly starting with eight players then slowly eliminating until there is only
one with consistent control over the board even when playing a quickened game where all the
properties start equally distributed this is an example of a perfectly competitive market place,
where no player immediately starts with more power than any other player. I believe that if one
were to completely understand the concept of monopoly, duopoly, and oligopoly that individual
would be able to manipulate the other players and consistently win in the game of monopoly.
The first and most important piece of information is to understand the concept behind the
game Monopoly the Editors of Encyclopedia Britannica describe it efficiently as:

Monopoly: a board game for two to eight players, in which the players goal is
to remain financially solvent while forcing opponents into bankruptcy by buying
and developing pieces of property. Each side of the square board is divided into
10 small rectangles representing specific properties, railroads, utilities, a jail,
and various other places and events. At the start of the game, each player is
given a fixed amount of play money; the players then move around the board
according to the throw of a pair of dice. Any player who lands on an unowned
property may buy it, but, if he or she lands on a property owned by another
player, rent must be paid to that player. Certain nonproperty squares require the
player landing on them to draw a card that may be favourable or unfavourable.
If a player acquires a monopolythat is, all of a particular group of properties
that player may purchase improvements for those properties; improvements add
substantially to a propertys rental fee. A player continues to travel around the
board until he or she is bankrupt. Bankruptcy results in elimination from the
game. The last player remaining on the board is the winner
Just as it is in the text book a monopoly is a firm or a player that produces the
entire market supply or property of a particular good or service, in this case it is rent.
However just in the market place of our economy monopolist have to develop carefully.
If a player were to acquire a monopoly and put all their money immediately into
developing their monopoly that particular player is left vulnerable to other players rent
receivables. For example: If player A puts 100% of their cash into development of their

monopoly then land on another players property there is no cash reserved for paying that
player the owed amount of rent. This causes Player A to become bankrupt or the need to
sell their monopoly. Where if Player A were to develop more gradually over the course
of several turns there would still be enough cash reserved to pay the other player for their
owed rent and to develop their monopoly. The carful balance between building a
monopoly and reserving cash for unexpected rent expenses is the reason the game has a
reputation for lasting hours, the more patient the player the more likely they are to
develop their property at an appropriate rate.
After playing the game a few times it quickly becomes apparent that the game
Monopoly can take up to several hours to completely finish. This has caused players to
come up with an expedited version of the game, in which all pieces of property are
equally distributed at the beginning of the game reducing the required amount of time to
simply acquire all properties. By playing the expedited version, the game quickly
becomes a game of trades, because no player starts with a monopoly. Trading properties
with other players is required in order to have any kind of advantage. Without trading,
the market of the Board is similar to that of a perfect competition market. No single
player has any power over any other player; no one will ever win, and at the same time
no one will ever loose.
In order to prevent an endless playing game of a perfect competition trades
between players must be made. By making trades, each player is attempting to create a
duopoly, trading in such a way that only two players end up with any kind of power or

advantage over the economy of the board. Once two players have established a
monopoly they can start to build on their property increasing the amount of rent payable
to each other player, once landing on that property. The only time a player would seek a
duopoly rather than a monopoly of the board is if a trade is required to gain advantage.
The secret to winning by creating a duopoly is to give a weaker player power over a more
experienced player. For example if I were playing with my family I would attempt to
create a duopoly with my younger sister rather than my more experienced dad. The
reasoning behind this, is that together my sister and I can bankrupt my dad the more
experienced player. I know that once the threat of my dad is gone I can easily manipulate
my sister into making poor decisions causing her to also become bankrupt or lose control
turning the duopoly into a monopoly where I have complete control over the board.
In conclusion, due to the material in chapter seven I am able to compare and
contrast the stages of monopoly, duopoly, oligopoly, and Perfect completion. In addition
understand the benefits each have while plying the board game Monopoly, and how each
can be used in a way of controlling the market of the board. Hoping to role the lucky
amount of number on the dice to claim a monopoly before everyone else, understanding
that creating a duopoly with an inexperienced player can bankrupt a potential threat, and
that while playing in a perfectly competitive market there will be no winner nor loser.

Work Cited
"Monopoly | Board Game." Encyclopedia Britannica Online. Encyclopedia Britannica, 16
Jan. 2015. Web. 10 Dec. 2015. <http://www.britannica.com/topic/Monopolyboard-game>.
Schiller, Bradley R. "Monopoly." Essentials of Economics. 8th ed. New York: McGrawHill, 1993. 151-159. Print.