All I ever needed to know about microeconomics I learned from the Hasbro board game Monopoly.
Some people, like myself, need practical models in order to understand certain concepts and theories. In our text book The Economy Today it completely ignores the intrinsic value of business decisions because you can’t put a numeric value on it. The game Monopoly™ is all about the numbers. In the game of Monopoly™ you have goals: The object is to bankrupt all opponents. To do so, you must be dedicated and make each decision with the aim of improving your chances and wiping out your opponents.” (Monopoly) In what I will call throughout the paper real life, the goal is the same. Look at the excerpt from an ABC New article called The Virtues of Monopolies.
Ten years ago you wouldn't have found Intel's name on a list of the world's top chip makers. You might not even have heard of it at all. But even back then, it had the mind-set of the monopolist. Today, Intel is virtually alone in the production of microprocessors. Its share of the worldwide market exceeds 79%. Its nearest rival, AMD, has just 11% of the business. What makes Intel the world's greatest manufacturer (not the world's greatest technology company—a silly pigeonhole not worthy of the firm's pre-eminence) is its understanding of how to think like a true monopolist. It doesn't want to be beaten at anything.(Cramer)
I think the game gives some excellent examples of microeconomic theories such as Barriers to entry. Our book discusses many barriers to entry. It defines a barrier to entry as “Obstacles that make it difficult or impossible for would-be producers to enter a particular market.” (Schiller p499) In the game of Monopoly™ there are also barriers to entry. On the official Hasbro ™ website, and in many books you can find all kinds of strategies for winning the board game.
Know when to cause a building shortage If you have only low-rent color groups, quickly build three or four houses per property to restrict the availability of houses to owners of high-rent color groups. Never move up to a hotel anywhere if the return of houses to the bank would enable an opponent to develop an expensive color group. (Example: the Yellow group has just been formed. There are only three houses in the bank, but six hotels. You own the light blues with four houses on each. Do not buy hotels. Doing so would give the player owning the Yellows an opportunity to build up to hotels on them.) (Monopoly.com)
By buying up the houses you are creating a barrier to entry. It is a barrier even if your opponent has the necessary funds to enter. This is because of the basic economic principal of scarce resources, or as Stephen Slavin calls it in Economics Control over essential resource. (Slavin 541)
The game Monopoly is a prime illustration of scarce resources; that is, “There’s a limit to the amount we can...