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Re-Thinking the Game of Monopoly

It would be hard to simplify capitalism further than Monopoly. The game attempts to express the ruthlessness of raw capitalism by declaring that whoever has the most money at the “end” is the winner. While it’s true our culture proclaims the rich as our greatest heroes, the method of financial gain in Monopoly is not a system that allows for any creativity. Roll the dice, buy a property, pay rent, pass go, and collect $200. Repeat.

Simple models have long been used to help understand complex ideas. With a few small changes Monopoly can be a space where we can play at being in control of the economic system. All it takes is a few new rules.

Rule Change #1: The Banker

In the original rules the role of the banker is simply a chore–the board game equivalent of taking out the trash. But in real life the banker is no passive entity. The banker is the center of the universe.

The Libor scandal, the UBS money laundering scandal, the SAC Capital scandal, FINRA suing Wells Fargo and Bank of America, TD Bank paying to settle charges of a ponzi scheme, Galleon Group’s insider trading scandal. This list could go on. The point is that banking is
exciting work!

The role of the banker is special. The banker should have no piece on the Monopoly board, but this person is in charge of the bank’s money. The success of the banker is judged the same as any other player: Whoever accumulates the most wealth is the winner. Of course, as in life, the banker has some advantages (like control of all the money).

Rule Change #2: The Convertible Note

Each player starts with only $500. That’s a nice bit of cash, but it’s going to be expensive to build your capitalist empire. Baltic Avenue will cost you $80, States Avenue is $140, Atlantic is $260, and that leaves you just $20. Even if you’re the first to land on Boardwalk you won’t
be able to afford the $400 price tag. Another $200 from “passing Go” is not going to last that long. You need more money.

At the start of the game the banker will offer each player a convertible note of $1000 at a 20% discount and 5% interest*. Armed with $1500 the player is now ready to set out on their titan of the universe adventure! (Of course players are not required to take the convertible note.)

Typically, the banker will offer the same terms to all players for the convertible note, but bargaining is encouraged.

One-thousand dollars invested at a 20% discount with 5% interest (calculating interest every 3 turns, but simple, not compounding interest) means a player will have starting debt of $1000. After three turns the debt is $1050, 6 turns is $1100, 9 turns is $1150, etc. Totally manageable. The banker is your friend and wants you to succeed.

Rule Change #3: Series A Financing

Once a player controls all the properties of the same color the Series A Financing is triggered. The player now owns something of value so is in a better position to bargain with the banker. The higher the value of the properties the better deal a player should be able to get.

The banker will usually invest $5000 in a Series A round and will ask for about 33% of the company. The terms are negotiated by the player and banker. (Remember that the banker also gets the same terms for their convertible note!)

During the Series A investment the other players can also choose to invest in that round under the same terms allowing a player to potentially raise a lot of money.

Anytime a player acquires all of the properties of one color they trigger the option for financing (railroads and utilities don’t count). Obviously the second time (Series B) and third time (Series C) a player will have more value and can bargain for better terms.

By taking financing a player is selling off some equity in order to quickly develop their property by skipping right to building hotels. That’s very expensive, but the banker is assuming a lot of the risk.

Once the game ends you’ll find the banker (who likely owns a significant percentage of every players’ earnings) very excited to play another game. Hopefully you had the cash to invest in another player when they got their Series A and now share in their success? Oh, the player you invested in went bankrupt? Sorry, better luck next time.

These new rules modernize Monopoly. First, the game is faster because hotels pop up right away and rents get to San Francisco levels of crazy. Secondly, it promotes economic cooperation in the sense that the players all end up invested in one another. Chaos erupts in trying to determine the winner, because it’s a corporate ouroboros of owning a percentage of a person who owns a percentage of you.

Playing this version of Monopoly won’t help you understand the details of a banking scandal. But you’ll have experience with a simplified model of the financial system that generates regular “scandals.” A game where arguing and backstabbing is part of the rules and the winner is hard to determine. This simple model recreates the same results found in the real world.



*A convertible note allows you to invest in a fledgling company without determining the value of that company. The value is determined later, usually in a Series A round, and the investor in the convertible note gets a slightly better deal as the Series A investors through the terms of a discount (example: a 20% discount means every $0.80 they invest is counted as a $1). Because the convertible note is a loan, the investor is also getting interest on the amount loaned, but rather than pay the money to the lender the company will let the interest accrue and that amount is rolled into their investment (at a 20% discount).

Image credit: Rob Hainer/Shutterstock


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