Lessons from a Monopoly Game, Using Real Money

Last November, on the annual pheasant hunting trip with my cousins in a remote corner of a rectangular state, we played a game of Monopoly unlike any we had played as kids; we used real money. It was an idea I’d had for years, thinking that having skin in the game would make it more exciting. I pitched the idea the year before, and my cousins were game. And, just as I had imagined, it was a thriller. But what I did not realize is that this innovation would fundamentally change the nature of how the game would be played, and this led to some important lessons.

The game

There were five of us. No, we did not play with $500 bills. We valued every item at a penny on the dollar, and played with money that ranged from a penny to a $5 bill. To buy Boardwalk, you’d need $4.00 of real money, instead of $400 in Monopoly money. “Advance to Go” would bring in 2 bucks, instead of $200, and so on. In order to set up the game with enough money in the bank, everyone paid $20 to play, which would fund the bank and allow for each player to begin with $15.00. The money ranged from a penny to $5 bills. (The bank teller looked at me funny when, a few days before, I had requested a withdrawal of $120 in pennies, nickels, dimes, quarters, 50 cent pieces, ones and fives).

We established the special house rules, which we had followed as kids, more or less. If you go to jail, you can’t collect on rents. Taxes and fees go to Free Parking, to be won by the person landing on Free Parking, like a lottery, etc. The winner would go home with the amount they won once all assets had been sold to the bank, and the remaining bank proceeds would then be given to the first and second runner-up. Everything was set, and so we rolled the dice….

Unforeseen Consequences

I must say, I had some luck on my side, along with some strategic trades that allowed me to get the coveted orange monopoly early on, along with some railroads, which I mortgaged for some starter homes on the Oranges (the OPM principle of investing—other people’s money). It also appeared the game would be long, which would result in the winner gaining more assets, depleting the bank. Half way in, I alone had a monopoly with the ability to improve myself, and I had some other properties locked up to prevent my opponents from trading for monopolies. The odds were on my side, and it was just a matter of time. I was all the talk on CNBC, and was planning how I would spend the winnings on luxuries--perhaps a yacht?

Then, it happened…

Realizing that losing was inevitable, on his next turn Brent offered to give all of his property and money to Troy, basically forfeiting to him, with the condition that Troy would give Brent 30% of his winnings. “I’m investing in you, Troy,” was his pitch. This would give Troy two monopolies and cash to invest, immediately turning the tables on my fortune. I objected, stating that such a merger violated the whole principle of the game. I stood alone in my objection, of course, as there is nothing in the rules about this—because the rules do not take into account people using real money. Troy took the deal and built some houses. Brent rose from the table with a smirk, grabbed a drink and plopped on the sofa to watch a movie.

Although trading property is a common feature in Monopoly, I had never seen such an outright merger, because there would be no such incentive. But having “skin in the game” unexpectedly and fundamentally altered how the game was played. Now, I had to turn my own attention to a strategic acquisition to stay viable. On my next turn, and in a position of diminished strength, I approached Curt and Brandon—would they allow me to buy them out in exchange for 15% each of my winnings. They knew I was not in a position to state the terms, and so it ended up costing me more than that. It cost me in part because of my refusal to trade with them. OK, maybe I also had gloated a bit and turned down their trading offers with evil laughter while rubbing my hands together, which they did not appreciate. Anyway, the game came down to Team Troy and Team Jon, with both of us now obligated to our affiliates. I ended up winning the game, but after everything was divided up and apportioned to investors, there was not a large margin. By no means was it “winner-take-all.” We had a good laugh and vowed we’d never do it again.

Three Lessons from The Game

I teach organizational development, and invest actively in real estate. Thinking about the game through that lens, three lessons emerge, for both organizational leadership and for real estate investing:

Lesson One: Find creative thinkers. Instead of resigning his fate to dumb luck, Brent’s merger proposition to Troy demonstrated rare, outside-the-box problem solving. In his book Iconoclast, Gregory Berns, a neuroscientist from Emory, argues that no organization can survive without iconoclasts—innovators who turn conventional wisdom on its head to achieve what others say can’t be done.¹ Few people demonstrate “iconoclastic thinking”, so it’s important to find a “Brent” in your network who can help you take a creative approach to problem solving.

Lesson Two: Hold strategy loosely. My focus was fixed on acquiring the best monopolies, block other monopolies, and let the odds work in my favor. This strategy had worked so well in the past, that I was caught in what management scholars call “the success trap,” an overemphasis on past successful business practices to the neglect of exploring new directions.² I was oblivious to the possibility of a strategic merger, and shocked when it occurred. It was a painful reckoning. I had to adapt to the new reality, fast.

Lesson Three: Compete with, not against. Though good for business, competition can turn toxic when it fosters a culture of comparisons, posturing, and manipulation. Yes, I was an obnoxious gloater when I was ahead of the game, self-confident in the real estate empire I was building, only to be forced to go with hat in hand to Brandon and Curt for a deal; and they made me pay up. So be cool with your competitors, and don’t burn bridges. You never know when you might need them. Better yet, treat them as you would want to be treated, despite the consequences, for the good of the world.

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¹Gregory Berns (2011), Iconoclast: a Neuroscientist Reveals How to Think Differently, Harvard Business Review Press.

²Daniel A. Levinthal and James G. March (1993). "The Myopia of Learning," Strategic Management Journal, Vol 14, p. 95-112.