by Tyler Cowen
on July 27, 2011 at 2:19 pm
1. Michael Rosenwald is now blogging.
2. Do better educated leaders bring more economic growth?
3. Larry Summers on engaging with practitioners.
4. Crocodiles all the way down? A photo from Australia.
5. Can you name the top ten economies in Africa, including North Africa?
6. How you are really supposed to play Monopoly.
7. The Rent is Too Damn High!
Ha! Last week on vacation my son and his cousins were having the bank auction off the properties. I thought they had made it up. Looks like those little six year old rugrats can read.
Who declines to buy properties?
Water Works sucks.
People who are short on cash, or who land on low-rent properties?
No one, ever. Even if you’re low on cash as Pedro suggests, that property will *always* be valuable to another player, and you can often work out a beneficial trade that will net you either (1) a property you need or (2) some combination of property/money that will more than make up for what you spent.
I was sorely disappointed to see that the auction was the “secret trick” to making monopoly fun. A much better secret trick is to run side deals. If you’re not wheeling and dealing properties and taking full advantage of the mortgage rules, you’re not playing it right. The optimal strategy is to blow everything building up one color group and ignore the rest of your properties. too many people try to treat their properties evenly. Remember, this is a game designed to reproduce the experience of being a slumlord.
Side deals are specifically forbidden in the rules. The auction is straight on. The game requires a lot more discipline that way.
You might be able to buy it for cheaper on auction. It depends a lot on the meta-game.
Also, you can make people seriously overpay for stuff.
Say you land on Park Place, while someone else owns Boardwalk. You decline to buy. Now the player who has Boardwalk really wants Park Place, but the other players (who aren’t you) are going to try hard to stop him. It’s strictly a negative-sum game. Even if the Boardwalk-holding player gets it, he’s probably paid a really high price — money he can’t use to improve his set.
There are a whole array of options that haven’t occurred to you because you’ve never played that way in the game. Negotiations and personality matter, like in poker or Risk.
Dealer McDope is a better game – Monopoly with drugs…or on drugs as the case may be. Rules can be changed, added, or altered the more stoned you get.
Rail Baron is also a superior game. All railroads, more strategy, and a lot more fun. You also learn a lot about the history of American Iron Horse Highways.
Why not make Monopoly really fun:
– A government player will tax properties, income, transactions, and whoever has the race car. Taxes are progressive.
– Government will transfer revenues to poorer players and subsidize their purchases of houses.
– the bank can lend out more than it has by writing numbers on pieces of scrap paper and selling them for periodic payments. The government player occasionally checks to see that the bank is printing the paper properly.
– if a player pays rent on Baltic or Mediterranean, the bank is required to lend that player money to buy utilities or a railroad.
-Government can also write numbers on scrap paper and hand them out at will to whomever it pleases.
– the railroads and utilities are monopolies, so the rent is higher, but government gets a cut. But if one player ends up with both utilities, on the roll of a 12, government takes them both away and reassigns them randomly to two other players, unless the owner pays government not to do so.
– government may put a cap on rent at any time in the high priced properties, but the owner of those properties may pay government not to do so.
– property owners may bundle properties together and sell the revenue streams to other players, but they may keep the identity of the properties a secret. Another player may act as a credit rating agency, collect a fee from the packager, and render an opinion on the quality of the package to any potential buyer from whom he also collects a fee.
– one player sells all the players their game pieces at the beginning. The players must first buy pieces of paper from government to trade for the pieces from the holder of the game pieces. The original owner of the game pieces can then buy properties using the government’s pieces of paper with numbers on them.
– a player called Krug Man criticizes every game action and offers advice to all players throughout the game, but he doesn’t actually participate in any of the play of the game and no one really listens to him. He wears a medal around his neck.
This is excellent.
I haven’t even got to the rules about interest rates, GSEs, campaign contributions, voting on new rules with both equal and proportional representation, uninvited players entering the game and demanding money, debt ceilings, bank capital requirements, stealing, affirmative action, environmental regulation, exogenous shocks, gun control, and swaptions.
The game is played until the whole system collapses or everyone quits or kills each other. You play it only once.
And every time everyone goes once around the game board, everyone votes who gets to be the government player for the next round.
One of the player pieces is shaped like a clown?
#6 was a surprise. I’ve played it so often and with the wrong rules indeed!
I’ve never let my daughter win at checkers. NEVER. My wife was not happy with me. We switched to force-jump when she was five or six. (twenty-four move games are boring) By the time she was seven, she was good. She know exactly how many times she has beaten me.
My younger daughter is different. She doesn’t want to play any game that she doesn’t have an even chance to win.
The optimal monopoly strategy is to always buy any property you land on. You can mortgage lousy properties, returning half their cost, so you shouldn’t ever run out of cash. What happens when someone doesn’t buy a property is thus moot.
Monopoly takes forever, and is won either by being lucky enough to buy a monopoly, or else by manipulating an opponent into making a foolish trade. It’s a really really stupid game.
You didn’t read the article.
The article is all about auctions that are not needed when everyone plays the optimal way by buying all the properties as soon as they land on them.
A strange game. The only winning move is not to play. How about a nice game of chess?
The two big problems that, as a practitioner, I find with academic economists are:
1) A lack of appreciation or emphasis on agency costs, and how these really, really matter
2) Going from “money neutrality” to “debt doesn’t matter, it cancels out, so it falls out of the model”
I think Minsky is so popular among practitioners because he addressed both of these points.
The biggest problem with you is that neither of those statements is remotely true. And therefore, you’re an idiot.
Speaking of the rent being too Damn High, I wish that my renter knew that they pay the property tax on my apartments and therefore the Florida’s homestead exemption is bad policy. About 20% of their rent goes to property tax but, what do I care they pay the tax not me. A change in policy might create a windfall for me for a few years but the market is competitive.
Care to expand? Seems like an interesting point. Where does the protection kick in unless you are bankrupt?
What your renter thinks is sadly irrelevant in this issue, because renters wholly lack political power.
Renters can’t vote? I wish!
What is the thing Tom Brady and Larry Summers have in common?
Both are full of themselves, at the top of their game and for that, everyone loves to hate them.
I’d be interested in seeing the African GDP data as a per capita measure as well, but not interested enough to do it myself.
Check this out:
That’s what google is for:
The reason I usually ignore the bidding rule is that it makes the 2-player version of Monopoly a little awkward.
Also I don’t think the optimal strategy is to buy property on every landing. Once you can prevent an opponent from acquiring a monopoly, then it’s probably better to save the money for completing your own high rent monopoly.
6. I remember when I was a kid reading the Monopoly rules and being disturbed that we didn’t play by them to the letter– and I could predict exactly where this article was going with the explanation of why nobody plays by them. The real rules make for a competitive game and the youngest child would likely get knocked out quickly — and it wouldn’t be a family game for long. I lobbied my parents to play by the real rules to no avail.
Does the author of #6 really need to use such a degrading tone? Some of us actually did read the Monopoly rules.
I probably play monopoly a couple times a year with my brothers and we always, always, always do the auctions, and never do the cash-pot-on-free-parking thing. Because we read the rules, because these common changes make the game never end, and because I had at least 2 computer versions of the game that taught me the right way to do it.
I can remember playing without the auctions when I was a kid and I liked it then because I thought the auctions were hard and boring – as the article states, they’re pretty rough on young kids playing – but even then I recognized that the free parking lottery rule just kept players in the game longer so it never ended.
If you want to play a (modestly) popular old American board game about making money from hotels, play Acquire.
Why are you pimping Yglesias’s latest limo-lib screed? The rent is _NEVER_ too damn high, it’s just that your unproductive body is absent-mindedly hogging space that someone else could put to better use.
From the link:
To get the full argument you will, of course, need to buy the thing, but the basic idea is to make the case that pathological elements of our housing policy that increase the cost of living in desirable neighborhoods of key metropolitan areas are an underrated of America’s economic and social problems.
Desirable neighborhoods will ALWAYS have a high cost of living, moron! That’s how you keep people from being stacked on top of each other! Why not just have everyone live in the best place?
Ah, well, at least Yglesias will get to milk his stupid, pitchfork-wielding readers to pad his already-fat income on his dream job.
Lefties … gotta love ’em.
No – Yglesias has a relatively libertarian slant on housing policy. Here for example:
So what about the poor? Well they “can’t afford to” move to the suburbs. But why not? Well in large part because these suburbs tend to have an array of rules—minimum lot size, minimum lot occupancy ratio, rules against multi-family dwellings, parking minimums, maximum building height, etc.—designed to ensure that expensive land leads to expensive houses rather than to intensive land use.
Slant, maybe, maybe not. Has Yglesias ever come out fully opposed to rent control laws? I have seen him hem and haw around the issue, but never once actually made the argument that they are bad policy that needs to be junked.
I believe the solution is to stack people on top of each other – multi-floor buildings are not exactly a recent invention.
I meant literally on top of each other — actual stacks of people.
You get the point, hopefully: some forces make people want to move somewhere (it’s a “nice place to live”), other forces make them not want to move there (“it’s too expensive”). All the rent whiners are saying is, “we want to live in the some of the best places, where others would gladly take our spot, but we also want it to be even cheaper”. Fuck that. Get out of the way, whiners.
Well, that doesn’t change the fact that the nicest places to live (as measured by the market) such as New York, San Francisco, and the such, can easily accommodate more people if we just build taller buildings. Would it make these places “cheap” to live in? Doubtful. But on the margin, more supply should lower price.
New York City, if you didn’t notice, already allows pretty tall buildings — heck, if you want to rebel against against tall buildings there, you pretty much have to blow them up yourself! (bad taste joke, sorry)
But they still don’t find it worth it to build them taller, because the willingness of people to pay wouldn’t justify it. See, *potential* movers to NYC are rational, non-whiners; it’s just the people there who want to lock in rents and lock out the numerous people who would gladly pay more for those spots. Shame on them.
NYC have lots of height limits on buildings – Chicago is the only city with weak height limits, and see how cheap (relatively speaking) rent is there.
Wow, really? The best areas of Chicago don’t have leeches whining about housing not being affordable?
Chicago had height limits for most of the city, including the “best areas” aside from the immediate lakefront (which was, tragically, mostly built up during the post-war “hideous age” and could use a good knocking down). The billionaires owning places on the lakefront got annoyed with that when construction was planned in the late 90s and got a height restriction for the Gold Coast, too.
Silas, this is really something that you should be ashamed of. Your knee-jerk reaction to the fact that Yglesias is a liberal caused you to make assumptions that completely wrongly characterized his views. In fact, he (rightly) views housing policy as a relatively over-regulated space, one needing less government intervention. This would contrast with, say, health care, where he would likely prefer more government intervention. this is a product of him having complex viewpoints, rather than being a walking caricature.
Your degrading tone would be uncalled for even if you had correctly related his views. That you also made those comments in the context of a completely wrong assumption about Matt’s views should embarrass you.
I’m glad Yglesias is taking a slightly more libertarian position (though HOA rules are not necessarily libertarian), but the positions he advocates would simply not achieve what he wants (though it would achieve what he doesn’t want, and what libertarians do want).
When you make a place more liveable, *more people want to live there*. The rents then _must_ go up to keep everyone from living there. Increased density generally does not solve this; the places that are density restricted are because people are willing to pay to keep it that way. Furthermore, densification of urban areas increases spatial externalities and drives up rent further after the short term.
There simply is not an option to have places that are simultaneously “more affordable” and “nicer”. It just doesn’t work like that, and Yglesias is just building off economic ignorance when he argues otherwise.
Side note re: #5: Tyler, your link goes to a ht.ly frame that puts its own social-networking mumbo-jumbo around the actual site. Since you’re not space-limited for URLs or anything, why not link to the article itself ( http://afrographique.tumblr.com/post/4501499789/an-infographic-of-the-largest-african-economies-by )?
Got #1-9 but not #10, put Botswana instead of Ethiopia.
#2 – more evidence that I would make a good dictator!
All citizens will be required to change their underwear every half-hour. Underwear will be worn on the outside so we can check.
Unless he is giving it away, it will be too expensive for me to read.
Tyler, you may be interested in knowing what the Boehner plan implies. Read Jen Rubin’s
also Jen is reporting that tomorrow the House will vote on the Boehner plan (apparently Republicans had agreed to vote for it).
Any bet on how the vote will go in the Senate? On Obama’s veto? My bet: the Boehner plan will be law sometime next week. My analysis: the first-stage measures are better than nothing (perhaps enough to delay a debt downgrade), and a good probability that the second-stage will produce additional, small steps toward fiscal adjustment before the end of this calendar year and other ones during 2012. Approval of a full program of fiscal adjustment will depend both on the outcome of next year’s election and on the effective implementation of most measures approved between now and the election.
Please post this sort of stuff on your own blog. I don’t care how interesting it may be, as soon as I see your comment has nothing to do with the post I refuse to read it. Irrational? Perhaps…but I suspect I am not alone.
No he isn’t. He has a point. It’s rude to hijack comment space like EB does.
The title of the post is assorted links. Are you mad that EB only included one?
You didn’t go far enough — he shouldn’t post anything, because he does not understand economics.
“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” Hayek.
Hayek’s point here is that nobody understands economics.
And the more I listen to economists, the more I see that he is right.
It should be completely clear to everybody that E. Barandiaran does not actually understand economics. But he is so certain, so decisive! It’s so rare these days to hear that attitude from somebody who is not obviously a complete fool.
As various people have noted, the problem with the Monopoly article is that (A) many of us did read the rules and (B) Monopoly is still not a very good game when played correctly, although it is substantially better. To start with, “last player eliminated” is a bad victory condition, because it guarantees that some (in large games most) players will have to sit out a substantial part of the game. It’s also highly luck based, and the decisions just aren’t very interesting. There are some marginally interesting negotiations, but other negotiation games have better, more interesting dynamics.
6. I always thought the rule was if you didn’t buy the property, you had to drink.
Getting cash on free parking is a stupid rule. The problem with the game is that it lasts too long. Injecting more cash into the game is counterproductive.
True. The cash injections keep the economy going and the players prospering for far too long. The game should properly by played with a tight bank, leading quicker to mortgage foreclosures and bankruptcies.
I think that if the cash is injected into just one player’s hand it could make the game go faster. The player that wins the free parking lotto can then build up his properties to 1-2 hit kill levels quicker.
Speaking of rules nobody plays by in monopoly, what do you guys think of the rule that if all of the house/hotel tokens are on the board you cannot upgrade your housing until some tokens are taken off the board? My family never liked that rule so I never got to experience it that way.
In my opinion the best way to speed up monopoly is to give players extra starting cash and give each player their own set of dice. Also penalize players who drop the dice off the table.
“Speaking of rules nobody plays by in monopoly, what do you guys think of the rule that if all of the house/hotel tokens are on the board you cannot upgrade your housing until some tokens are taken off the board?”
A clear precursor to “affordable housing” statutes.
I don’t recall ever running into this problem. By the time the board is full of hotels rents have gotten so high that people go bankrupt relatively quickly. Anyway how do you deal with this practically? Just put a scrap of paper on the property saying “hotel”?
Anyway how do you deal with this practically?
You could use the pieces on a single property on the group to represent those on each of them
No, the rules say you cannot buy houses/hotels even if you found extra tokens to represent them. This might enter into your strategy, e.g. I’ll keep my properties at 4 houses instead of upgrading to hotels to prevent others from building.
I am currently completing my dissertation at Princeton University, without getting into the nitty gritty, one part of it is about monopoly and it’s ability to create a high load on working memory and to disrupt the Anterior cingulate cortex. I go on to address the disruptive and more often than not, negative effects of game theory and economics, on various areas of the frontal cortex.
I know you !
I got as far as “South Africa followed by something with oil,” which is pretty well on the money.
Side note: Multicolored graphs with Helvetica make me think hipsters are involved, which casts doubt on all data.
And even if the data is right, why oh why does a table of 10-odd numbers need a whole new kind of figure which is even less informative than a pie-chart invented to display it?
I cringe every time I see the word “infographic”.
delicious food !
oh I hurt it !
Credit card !
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