The Fallacies of Hasbro's Monopoly

Though the game “Monopoly” is excellent as a means of providing entertainment for the masses, its ability to teach basic business fundamentals leaves much to be desired. Principles such as consumer choice, interest rates, and ethics are virtually irrelevant in the property trading world of Rich Uncle Pennybags. Concepts that are present such as mortgages and financial banking are heavily misrepresented and underinformed. Rather than take a moment to provide its users with a streamlined lesson in finance, or foreshadow the dangers of concentrated wealth, Monopoly ops instead to emphasize luck-based cash flows and repeatable gameplay. The end goal boils down to bankrupting your opponents and becoming the most cutthroat capitalist on the board. 

Monopoly has been infamous among households for straining relationships since it was first sold by the Parker Brothers on February 6, 1935. While many often attribute the game’s creation to Charles Darrow, it is much less known that he stole the game’s concept and sold it to Parker Brothers as his own. In truth, the origins of Monopoly can be traced back to Lizzie Magie in 1903. Magie was regarded as a brilliant feminist who created “The Landlord’s Game”, a board game designed to illustrate the potential evils of capitalism and the concentration of wealth in a way that could be understood by all. This message would unfortunately be lost however, as Monopoly would instead become a global phenomenon that glamorizes the idea of hardcore capitalists forcing each other into bankruptcy. (NPR Staff, 2015.)

Although Monopoly is littered with misconstructions of real-world business applications, this should not suggest that Monopoly is entirely useless as a teaching mechanism. It is important to remember that Monopoly is a board game designed for players of all ages (more specifically, ages eight and up), and of all backgrounds. An individual with no business knowledge who has never played a board game in their lives can find comfort in rolling the dice, gathering property deeds, and collecting rent to dominate their capitalist counterparts. Should the individual in question be a young child with no basic understanding of how finances or money work, they may find themselves picking up on the essentials of basic money management. 

In his article “5 Lessons in Finance and Investing From Monopoly”, Sham Gad provides a list of concepts that apply not only to a game of Monopoly, but to actual financial and investment principles. Gad explains in his concept “Always Keep Cash on Hand” that:

… If you aimlessly move around the Monopoly board buying up everything in sight, when the time comes to pay your financial obligations, you are likely to run out of cash. No cash means you have to start selling off the properties (assets) you acquired at a deep discount to what you paid for them.

This notion of having cash on hand is a principle lesson in business, as seen in the use of liquidity ratios. Liquidity ratios are often used to see if a person or organization can pay off their current debt obligations without the need to raise additional capital.

Of these, one of the most commonly used is the current ratio:

Current Ratio = Current Assets ÷ Current Liabilities 

Should an entity have too little cash or current assets on hand, they are more prone to default on their short-term liabilities. Should an entity have too much cash, they may not be using their assets efficiently, thus losing out on potential returns. 

In Monopoly, current assets are represented by cash and property deeds, with short-term liabilities represented by the inevitable paying of rent. Under the circumstances of an average game of Monopoly, players run into bankruptcy by being unable to pay rent with cash, as well as running out of properties to mortgage. Thus, Monopoly becomes a game about managing an ever-dwindling resource with an emphasis on cash flow. Per Gad, “Monopoly is a simple game: you start off with some money, and your goal is to be the last player standing with money. The way you win in Monopoly is by collecting rents on property, or cash flow.”

This concept is so simple to understand that it may very well be among the first business lesson anyone may learn, the prominent “You have to spend money to make money.” While Monopoly does several things wrong, this is perhaps one of the greatest strengths of the game. Certain revenues can be generated by chance cards or the passing of “GO,” though players who rely on this incredibly passive strategy will quickly find themselves bored at the table due to a premature bankruptcy. In truth, the only way to generate somewhat reliable cash flows is by buying properties and collecting rent, with more properties increasing the likelihood of semi-consistent cash flows.

Another valuable bit of advice that is shown through Monopoly’s gameplay is the famous “Don’t put all your eggs in one basket.” This proverb, which is commonly used to deter individuals from risking everything on the success of one item, echoes through the spaces of the Monopoly board. Some players, for example, are drawn to the allure of Park Place and Boardwalk. These two properties are the most expensive items in the entire game, and when equipped with a hotel, offer an incredibly enticing rental fee that can debilitate or eliminate even a relatively financially stable player. To get this return, however, is incredibly risky. Players who pursue this strategy must sink hundreds of dollars into these two properties, all while their competitors go out and conquer the rest of the board.

What typically happens, however, is that these players lose board control and begin to hemorrhage money to others, putting greater strain on them to profit with these two properties. A sunk cost fallacy then occurs, as players desperately hope that someone will land on these two specific spaces out of the 40 that exist (the odds are not necessarily 1 in 20 given dice roll probabilities.) Though this is a rather extreme example, it is worth noting that this playstyle exists, and is commonly taken by less-experienced or over-ambitious players. This principle can apply to any color-group, not simply the most expensive one. Orange properties are far less expensive, but relying solely on them to carry you to victory will likely end in bankruptcy. To stay in the game, players must diversify their assets among various properties scattered across the board, so that they may give themselves the greatest chances of collecting rent and stabilizing their cash flows. 

Some properties cannot simply be landed on and purchased, however. One of the staples of Monopoly is the negotiation that comes with players landing on properties of interest. A player who needs a certain property to complete a colorgroup may negotiate with the owner of said property and hammer out a deal that leaves both parties satisfied. Typically, trades occur where each player offers a property the other needs to complete a color-group, occasionally offering additional cash should one property outvalue the other. Rarely are properties sold at cash value, as players recognize the intrinsic value and power that these properties hold. 

Through this, the principles of supply and demand can be seen. Players who want a property to finish a color-group or take away control from another player are willing to pay a premium for it. It is up to the buyer to decide how much they are willing to pay for a property, and it is up to the seller to decide how much they want for it. Players must use great care in deciding how much a property is worth and what the right time is to purchase it. A player who is desperate for cash and holds a desirable property may let it go for a lesser amount than if they were in a more financially sound position. On the other hand, a player with an abundance of cash may be asked to pay more for a property than a player with less cash due to the perceived amount of wealth held by that player. The dynamics and fluidity present then serve as a potential baseline for supply and demand that may serve to educate or inform younger individuals of this critical concept. 

One glaring issue that the game has is how it defines and treats what it calls a “mortgage.” In Monopoly, those who are unfortunate enough to owe a large debt with insufficient cash may find temporary salvation in mortgaging a property back to the Bank. In doing so, the player receives 50% of the list price (the price listed on the board) but is unable to collect rent from other players who may land on that property. This is highly unusual, as it is highly common for individuals on mortgaged properties to rent out one or more homes on that property. Were the player filing for foreclosure, such an event would make more sense; the property would no longer be theirs, after all. Even then, a simple name swap would not be enough to rectify this issue however, as a foreclosure would imply that the property rights were always owned by the Bank and not the player that purchased it.

When a player mortgages a property in Monopoly, they obtain a specified amount, keeping the property under their name. The closest real-world equivalents revolve around the use of home equity. Often referred to as “second mortgages,” home equity loans and home equity lines of credit (HELOCs) allow individuals to borrow against their home’s equity. Home equity loans provide funds in a lump-sum with typically fixed interest rates, whereas HELOCs serve as a line of credit that people can borrow from as they see fit with generally variable interest rates (Kurt, 2019). Of these two, the one that most closely resembles the “second mortgage” seen in Monopoly is the home equity loan, as players obtain a lump-sum specified on the Title Deed for any given property and must pay an amount later to rid themselves of the mortgage. 

Unfortunately, this comparison only works on a surface level, as Monopoly has a very peculiar way of handling mortgages that is vastly different from its closest real-world equivalent. According to the official Monopoly rulebook: 

Unimproved properties can be mortgaged through the Bank at any time. Before an improved property can be mortgaged, all the buildings on all the properties of its color-group must be sold back to the Bank at half price. The mortgage value is printed on each Title Deed card.

The bottom line is that home equity cannot be borrowed against until all homes are removed. Equity may then only be borrowed on an empty property. 

There is no logical reason to require the player to remove the houses or hotels from a mortgaged property, as doing so decreases the value of the property and subsequently, the amount of equity a player can borrow against. Furthermore, the mortgage on a single property does not affect that sole property, but all other properties of the same color-group. To mortgage one property, homes on all properties of the same color-group must be sold back to the Bank at half price. No outside negotiation, no representation of sincere capitalism.

Unsurprisingly, the way in which Monopoly handles its mortgages, secondary or otherwise, is incredibly unique to say the least. In reality, a mortgage process such as this would likely be shut down immediately, as it demonstrates qualities similar to that of a predatory loan. According to the FDIC, “Signs of predatory lending include the lack of a fair exchange of value, or loan pricing that reaches beyond the risk that a borrower represents or other customary standards.” In 2018, Will Kenton for Investopedia described predatory lending as:

Any unscrupulous actions carried out by a lender to entice, induce and assist a borrower in taking a loan that carries high fees, a high-interest rate, [or] strips the borrower of equity… Predatory lending benefits the lender and ignores or hinders the borrower’s ability to repay a debt. 

Though perhaps a more extreme form of predatory lending, Monopoly mortgages fit these criteria as they strip the borrower of equity by forcing them to sell off their homes at an unreasonably discounted price, effectively designing them as methods to ease the borrower into bankruptcy. 

Recall that Monopoly is a game designed to have players bleed money until one is left standing. Mortgages serve as a clever positive feedback loop designed to remove “weaker,” less financially stable players from the game faster, allowing the game to be finished in a reasonable amount of time, thus increasing replayability. With that in mind, consider the situation in which a Monopoly mortgage is generated: 

• • Players typically obtain a mortgage when they lack the funds to pay their debts, making it evident that they are already close to bankruptcy.

  • Players are forced to sell their homes at a loss, with losses only worsening the more houses they have on the same color-group.

  • With their properties mortgaged by the Bank, players become unable to collect rent, losing a valuable source of income. 

Under these circumstances, it becomes evident that the role and design of mortgages in Monopoly are predatory in nature. It should then make sense that no real-world comparison truly exists, as such a mortgage system would be incredibly harmful to consumers and borrowers, and would likely be classified as illegal under several state anti-predatory loan laws. 

Regardless of Monopoly’s rather odd rules regarding the acquisition of a mortgage, one must also remember that there is a process for removing the mortgage as well. The rules for doing away with a mortgage are as follows: 

In order to lift the mortgage, the owner must pay the Bank the amount of the mortgage plus 10% interest…  However, the owner may sell this mortgaged property to another player at any agreed price. If you are the new owner, you may lift the mortgage at once if you wish by paying off the mortgage plus 10% interest to the Bank. If the mortgage is not lifted at once, you must pay the Bank 10% interest when you buy the property and if you lift the mortgage later you must pay the Bank an additional 10% interest as well as the amount of the mortgage. 

It becomes difficult to apply a valid comparison to Monopoly’s mortgage structures given how convoluted they become. From what has already been established, a player applies for some form of second mortgage to obtain capital, using the property (with no homes) as collateral. The property remains under the player’s name, where they must later pay back the loan plus interest to the Bank. 

If the player decides they no longer wish to own this property, the mortgaged property may be sold to another willing player at any negotiated price. Aly Yale explains in her 2019 article “What Is an Assumable Mortgage” that in the United States, mortgage transfers to another party are rather uncommon, as there is typically no benefit or incentive for the lender to do so. Only properties with “assumable mortgages” may be transferred to someone else, though these are somewhat difficult to obtain. Given this, it may be possible that Monopoly issues assumable mortgages, opting then to simply neglect labeling them as such. There exist two problems with this idea, however. 

The first problem is that under an assumable mortgage, the new borrower must still qualify for the loan, as lenders must see that the transfer will not affect their ability to generate revenue. (Yale 2019.) If a mortgaged property is offered to another player, it can be sold to anyone at any price. This means that a player close to bankruptcy with just enough cash to cover the initial 10% charge can purchase it, despite being far from the ideal candidate for a mortgage. 

The second issue revolves around the nature of the mortgage itself. Earlier it was mentioned that purchasing property in Monopoly is not done through a traditional mortgage, but through cash instead, allowing the buyer full ownership of their property. Assumable mortgages, however, are still mortgages: debt instruments that allow individuals to make monthly payments and steadily build up equity in their homes. Therefore, because the player already owns the property in question, there is no possibility that the property is under an assumable mortgage, as this would mean that the property was never completely the players to begin with. 

One of the most fundamental concepts in the worlds of finance, business, and economics are interest rates. Interest rates directly affect the cost of borrowing, and often influence the financial decisions of the corporation as well as the individual. When interest rates are low, businesses find it beneficial to raise funds through bonds, while families flock to take out loans for appliances, vehicles, and homes. As interest rates rise, the dynamic flips; businesses become more hesitant to issue long-term debt, and families are more than eager to invest whatever extra cash they may have in interest-paying securities.

Though this is a rather gross oversimplification, the importance of interest rates must not be understated. That said, it is incredibly disappointing to see such a pivotal part of our financial systems absent from Hasbro’s Monopoly. Throughout the entirety of the game, the concepts of interest rates are only utilized for the games flawed mortgage structure, even then failing to capture how interest rates actually work. 

Interest rates in Monopoly work as follows: to remove a mortgage from a property, the borrower must pay back the amount of the loan plus 10% interest. If the property is transferred to another player, the new owner must pay 10% interest upfront should they decide to remove the mortgage later. Afterwards, they must then pay an additional 10% plus the amount of the loan to remove the mortgage. Through this choice in game design, players are allowed to hold onto their mortgages as long as they deem necessary, essentially allowing them to pay interest as they see fit. 

To further draw this divide between Monopoly’s interest rates and their real-life counterparts, consider how these interest charges are generated. Monopoly has “fixed” interest rates that are always equal to 10% of the amount borrowed from a mortgage. It does not matter how much money the player has nor what the “economic” conditions of the board are, this value will always equal 10%. Real interest rates, however, are more dynamic than this.

In 2017, Nichole Shea wrote an article for the Consumer Financial Protection Bureau titled “Seven factors that determine your mortgage interest rate.” Before listing off the seven factors, Shea notes the inherent variability of interest rates, explaining that “Interest rates, just like gasoline prices, can fluctuate from day to day and from year to year.” Monopoly’s interest rates, by comparison, are cemented into place, never willing to move in one direction nor the other, even if it would be of the benefit of the Bank to do so. What follows are Shea’s seven factors that affect interest rates, with each followed by an explanation on how it relates to the world of Monopoly:

Credit Scores – “In general, consumers with higher credit scores receive lower interest rates than consumers with lower credit scores.” Countless benefits come with building a good credit score, and it is without a doubt one of the most important tools any individual can develop for their financial health. It is then highly unfortunate that Monopoly does not capitalize on such an important topic. Players who have made successful payments on multiple homes or properties with plenty of disposable income will still pay the same interest as players with no properties and on the verge of bankruptcy. 

Home Location – “Many lenders offer slightly different interest rates depending on what state you live in.” Most properties in Monopoly (not including the railroads) are named after streets in Atlantic City, New Jersey, with the exception of Marvin Gardens which is instead based on a neighborhood in Margate, New Jersey. Despite this, it may be safe to assume that all properties are located in a fictional New Jersey, thus making them all belong to the same state. If this is the case, this point may perhaps be rendered irrelevant for this discussion.

Home Price and Loan Amount – “Homebuyers can pay higher interest rates on loans that are particularly small or large.” Properties in Monopoly range from the humble $60 Mediterranean Avenue to the famous $400 Boardwalk. A quick calculation of the Monopoly properties, not including railroads and utilities, shows an average price of roughly $209, and a similar median of $210 (see Appendix.) Properties close to this price range include New York Avenue, Kentucky Avenue, and Indiana Avenue. These three properties may be thought of as a set of “average properties,” with properties above this price being considered “costly,” and properties below it “economical”. Were Monopoly to follow through with the stated factor, properties at extreme price ranges like Mediterranean Avenue and Boardwalk would perhaps see higher interest rates. The fact of the matter is that all properties, regardless of where they fall on the pricing spectrum, have the same flat 10% interest rate, with no increased rates being given to those on either end. 

Down Payment – “In general, a larger down payment means a lower interest rate.” If mortgages in Monopoly are treated like their traditional counterparts, this factor will make no sense. Monopoly mortgages are created to provide a cash loan to players so that they may pay off their debts, unlike real mortgages which allow borrowers to build equity in their homes. There is no logical way to provide a down payment on a cash loan when, presumably, the loan is being taken out to cover an initial absence of funds. With cash loans, instead of a down payment to offset potential risk, lenders use an interest rate tailored to offset the perceived risk of the borrower. 

Loan Term – “In general, shorter term loans have lower interest rates and lower overall costs, but higher monthly payments.” Typically, interest payments for most conventional loans are paid on a monthly basis. Should the borrower miss a payment, they may be subject to a myriad of fees, penalties, or ultimately, defaulting on the loan. Interest payments in Monopoly, however, lack any enforcement or sense of urgency regarding timely, consistent payments. Players are free to take out a mortgage once they own a property and not pay any interest for several turns. While most of Monopoly’s rules are designed to treat cash as a scarce resource, the way it handles interest practically allows the player a break from the nonstop cash outflows plaguing them throughout the game. Furthermore, interest charges in Monopoly are nonrecurring, and are only paid when the player decides to lift the mortgage; in other words, towards the end of the loan’s life cycle. As a result, these payments more so resemble closing costs that are often associated with traditional mortgages, and not the interest charges they claim to be. 

Interest Rate Type – “Fixed interest rates don’t change over time. Adjustable rates may have an initial fixed period, after which they go up or down each period based on the market.” By these definitions, the interest charges found in Monopoly loans most closely resemble fixed rates, though this is admittedly unsurprising, given that interest is typically paid once or twice, with either time offering the same 10% interest rate. Choices for adjustable-rate mortgages (ARMs) are nonexistent, forcing the player to take on fixed loans. 

Loan Type – “There are several broad categories of mortgage loans, such as conventional, FHA, USDA, and VA loans… Rates can be significantly different depending on what loan type you choose.” This is yet another point that is not reflected by Monopoly, as only one type of mortgage is offered. Because the interest rate always remains constant despite the economic conditions of the board, it may be best to classify Monopoly mortgages as fixed-rate mortgages. USDA loans may be removed from consideration, as according to the USDA.gov website, these loans are designed to provide “…low- and moderate-income households the opportunity to own adequate, modest, decent, safe and sanitary dwellings as their primary residence in eligible rural areas.” VA loans may also be ruled out, as there is no clear indication in the official rulebook if the player’s character has any affiliation with the military. While this last point may be deemed absurd, it is brought up as it is not uncommon for games to provide a form of “lore,” or background, for their games, players, and characters that inhabit the space. 

Shea’s closing remarks on the subject of interest rates are as follows: “It’s not just one of these factors—it’s the combination—that together determine your interest rate.” With so much consideration that goes into the calculation of interest rates, it then becomes incredibly unfortunate that Monopoly treats them with such little regard. Of these seven factors mentioned, virtually none of them are represented in the final game. 

The Bank is the central figure of the Monopoly economy and is neither exempt nor absolved from the curious fiction present throughout the rest of the game. A typical commercial bank provides essential financial services such as distributing cash, originating loans, and selling mortgages to qualifying individuals. While commercial banks can do more for individuals and businesses alike, these three items are the extent of what the Bank does in Monopoly. Even the essential act of allowing players to put their money in a savings account is not available, effectively forcing players to do the equivalent of putting their cash under a mattress. It has already been discussed how the Bank fails to properly issue mortgages and loans, however what has not been touched on is the flow of cash between the Bank and the player, and the Bank’s overall role in the Monopoly economy. 

Though it is tempting to draw parallels to the Federal Reserve as both operate as a central bank for their respective territories with a degree of control over the money supply, far too many discrepancies exist to create a proper comparison. Per the Federal Reserve, “The Federal Reserve Banks provide financial services to banks and governmental entities only. Individuals cannot, by law, have accounts at the Federal Reserve.” Furthermore, the main functions of the Federal Reserve are to “promote the effective operation of the U.S. economy and, more generally, the public interest,” focusing heavily to “promote maximum employment, the stability of the financial system, the safety of individual financial institutions, and the promotion and administration of consumer protection laws and regulations.” (FederalReserve.gov). 

Clearly the goals of the Federal Reserve are far different than those of the Bank. According to the Monopoly rulebook, the roles of the bank are as follows: 

The Bank pays salaries and bonuses. It sells and auctions properties and hands out their proper Title Deed cards; it sells houses and hotels to the players and loans money when required on mortgages. The Bank collects all taxes, fines, loans and interest, and the price of all properties which it sells and auctions. 

From this, it can be gathered that the Bank’s main concerns are its own short-term day-to-day operations, varying drastically from the Federal Reserve’s overarching goals of maintaining an effective U.S. economy. With the goals of the Bank now clarified, certain things about the Bank’s operations should be noted. 

The first item explains that the Bank pays salaries and bonuses. This indicates that the player is an employee of the Bank, where “Each time a player’s token lands on or passes over GO, whether by throwing the dice or drawing a card, the Banker pays him/her a $200 salary.” Because players can pass GO at different times, this means that they are paid at uneven and inconsistent intervals, indicating an underlying problem with the Bank’s payroll methods. 

In the United States, several federal and state laws exist to protect workers from foul labor practices. The “Wages” section of the United States Department of Labor website describes that: 

A common remedy for wage violations is an order that the employer make up the difference between what the employee was paid and the amount he or she should have been paid. The amount of this sum is often referred to as "back pay." Among other Department of Labor programs, back wages may be ordered in cases under the Fair Labor Standards Act (FLSA) on the various federal contract labor statutes. 

In any real scenario, the employees in question would have the opportunity to take legal action against their employer. The U.S. Department of Labor describes four methods in which the FLSA allows for the recovery of unpaid wages: 

1. 1. The Wage and Hour Division may supervise payment of back wages.

   2. The Secretary of Labor may bring suit for back wages and an equal amount as liquidated damages.

   3. An employee may file a private suit for back pay and an equal amount as liquidated damages, plus attorney's fees and court costs.

   4. The Secretary of Labor may obtain an injunction to restrain any person from violating the FLSA, including the unlawful withholding of proper minimum wage and overtime pay.

Although this question of what could be done is important, there is another underlying item that must be considered.

Typically, companies withhold pay or terminate their employees when financial hardship occurs, something repeatedly seen during the 2008 recession. As such, it would then be understandable to draw the conclusion that the Bank is facing financial challenges, with such a claim being further supported by the previous findings of a possible economic downturn in the world of Monopoly. There is one key flaw with this theory however, as the Bank can never run out of money. 

Per the Monopoly rules, “The Bank never ‘goes broke.’ If the Bank runs out of money, the Banker may issue as much more as may be needed by writing on any ordinary paper.” Because the Bank is able to create its own money, there exist two possible scenarios: either the Bank is counterfeiting currency in an attempt to stay afloat in a difficult economic period, or (perhaps more realistically), rather than being a fictionalized version of the Federal Reserve, the Bank is instead a representation of the U.S. Department of the Treasury. Though the Federal Reserve is in charge of the money supply, the Federal Reserve Bank of St. Louis explains that the money supply is altered by adjusting the discount rate, reserve requirements, interest on reserves, and conducting open market operations. The Bank however “alters” the money supply by simply printing out more money, in a manner akin to the U.S. Treasury.

The U.S. Treasury’s Bureau of Engraving and Printing is responsible for the printing of U.S. paper currency, making it the most comparable equivalent to the Bank of Monopoly. In addition to this, recall that the Bank is also responsible for the collection of taxes; another basic function of the U.S. Treasury. Despite these similarities, like everything else present in the game, there exists a series of inconsistencies that differ greatly from what is present in our financial and economic institutions. 

For example, taxation, like salary payments, are inconsistent and only occur when the player lands on the “Income Tax” space. When a player lands on this space, they have the option to either “Pay 10% or $200.” This taxation is not based on actual income, but rather a player’s total net worth, meaning a player who has not received any income will still be taxed. Likewise, tax refunds are only available through the Community Chest card “Income Tax Refund,” in which the drawing player receives $20. Note again how the amount is irrelevant to a player’s actual income, potentially allowing even the wealthiest player to collect a tax refund. Financially stable players may smile with glee as they collect a tax refund, while their peers are pushed further towards bankruptcy by unpredictable and unfair taxation. 

Several other issues can be identified within the Chance and Community Chest cards. The Chance card “Bank pays you dividend of $50” and the Community Chest card “From sale of stock you get $50” implies that the bank is not a government organization, but instead a stock issuing company. It only gets more confusing once other cards are taken into consideration. If the Bank is a stock issuing company, it would be in its best interests to keep updated financial statements. Items such as “You have won second prize in a beauty contest. Collect $10,” and “You inherit $100” would have to be recorded in a cash flow statement as these, for whatever reason, arise from the Bank’s day-to-day business and operations, despite having no logical reason to do so. A competent accountant looking over the Bank’s income and expenditures would likely question the relevance of some of these items.

As with everything else in Monopoly, reality and proper representations of U.S. economics are traded in for dynamic gameplay. The Bank serves not as an instrument to teach players about the principles of how a bank operates, but as an odd conglomeration of different financial institutions created to keep a game of Monopoly interesting. It is not designed to teach, it is designed to entertain. 

In 2018, Hasbro released a special version of Monopoly titled “Monopoly: Cheaters Edition.” Their website explains that here, players are encouraged to “express their inner cheater to own it all while they buy, sell, dream, and scheme… Complete a cheat to get a reward, but fail a cheat and pay the consequences!” The front of the box depicts a devilish Uncle Pennybags holding what is presumed to be stolen money. Alongside are the taglines “What can you get away with?” and “Get caught, get cuffed!”

A Bloomberg article on the game by Rachel Paley explains that “Hasbro came up with the idea for the special edition following an in-house study of about 2,000 people, which revealed that half of [the] players attempt to cheat during games.” It is no secret that some players like to engage in dishonest activities so that they may be the last one standing while their contemporaries wallow in bankruptcy. Similarly, it is no secret that some businesses like to engage in dishonest activities so that they may show deceitful amounts in their financial statements and lie to the individual, the investor, and the authorities. Enron, WorldCom, Bernie Madoff, and several other scandals-now-turned-case-studies have shown time and time again how a lack of ethics from a few key individuals can have rippling effects through global markets, effectively causing millions to billions of dollars’ worth of losses to investors, employees, and anyone unfortunate enough to have placed their trust in them. 

Hasbro’s Monopoly leaves much to be desired. While the game has an incredible amount of potential to teach its players about basic financial concepts, the game neglects this and instead pursues a model focused on mass appeal and replayability. Given all the countless variations and spinoffs of Monopoly, it should come as a surprise that Hasbro has not yet released at least one version of the game that properly attempts to capture financial principles that are rooted more in reality than the curious fiction that has been developed. Because it is unlikely that Hasbro will trade in potential profits for a unique and informative gaming experience, the remainder of this thesis will be devoted to outlying the possibilities for an improved board game that takes into consideration the principles discussed so far.

Consumer Choice – In Monopoly, players have no choice of what properties they land on nor how to pay for them. An alternative could see players having a greater degree of control over where they move in exchange for cash. For example, players could choose to move four spaces on a board and pay $40 ($10 for each space.) Alternatively, dice rolls could remain a part of the gameplay and simply be adjusted to achieve the desired roll. If a player wants to move five spaces and rolls a seven, they could make up the difference and pay $100 for each adjusted space.

Properties and Mortgages – Assume that properties available for sale have a dwelling on site, and that costs for additional houses will instead be substituted for “expansions,” as it makes more sense to expand on an already existing home than to create an additional building or buildings on that property. Regarding the purchase of properties, rather than be forced to buy properties outright, players should be given the option to take out a mortgage. This would not only reflect a more realistic approach to real estate investment, but it would also allow for a deeper layer of strategy as players decide what option benefits them the most. In addition to this, mortgaged properties would still allow players to collect rent. Players could provide a specified down payment on the turn they buy the property, and then proceed to make payments for a specified amount of turns. Payments would be timed at the end of a player’s turn, reflecting payments towards both the principal and interest.

Credit Scores – Those players with a high net worth and/or successfully paid off one or more mortgages will have a higher credit score. A potential formula for determining a player’s credit score can be seen as follows:

Credit Score = (11 ∗ √[Net Worth + 1000]) + (10 ∗ # of Successful Mortgages) 

It is important to remember, however, that this is a board game that should be approachable by younger players. As a result, a simpler method to derive a credit score could simply use a table such as this: