The following post is by guest-author Ryan Bagby.

A rich capitalist pig
A rich capitalist pig

My dad made a game while he was in college called “Spec”, short for speculation, and he recently introduced it to the family. The game is basically free market Monopoly, where everything is negotiable. We usually play with 6 people such that 2 people start with all the properties, 2 people start with all the cash, and 2 people start with all the hotels and houses (each had an equal number of houses and hotels).

In other words, the game starts with established oligopolies. There are other ways to start, but this is usually how we begin.

Property: Property comes up for auction whenever it is landed on for the first time. The real estate agents have the rights to the property (but do not “own” them per se; they collect no income unless they buy them) so they collect the proceeds from the auction. The property goes to the highest bidder.

The real estate agent cannot bid in the auction (bidding would just consist of them bidding everything they have and then giving themselves back the money in addition to the property they just “bought”) but has the right to sell her right/claim on the property to any other individual who is more interested in the money from the auction than the property being sold. For example, if Player A is a real estate agent and Player B just landed on one of the properties that Player A owns the “listing” for, the property immediately goes up to auction (this is assuming the property has never been landed on before).

We’ll say that Player B doesn’t really want to try to buy the property but Player A does. Player B and Player C now try to outbid each other to buy the “listing” from Player A. We’ll say that Player B wins with a bid of $1000. Player A pockets the $1000 and can now take part in the auction for the right to fully own the property. Player A, Player C, and Player D now try to outbid each other to buy the property. We’ll say Player A wins with a bid of $2000. Player B pockets the $2000 and Player A now has full ownership of the property.

One of the very few things that is not negotiable in the game is the amount charged when someone lands on a property you own. We always go by what the property card indicates: number of houses, hotels, multiple of dice roll, or whatever.

Contracts: Contracts are a huge part of this game, so you’re going to need a pretty good amount of paper and pens. Contracts are made for loans, partnerships, business plans, and anything that can pop into your head that someone else will agree to. In the games that I’ve played, contracting helped us reach a higher level of sophistication and allowed game play to carry on more smoothly.

Acquisitions, Mergers, Initial Public Offerings, and Other Investments: The option to buy someones property is always open as long as they agree to it. Usually in the middle of the game we see a lot of mergers where owners of say Boardwalk and Park Place agree to merge so that they can both get the benefits of owning the “set”. In this way they can put hotels or houses on their property and gain a much larger income. The percentage that each person owns is up to negotiation between the partners. In a set of 3, each of the individuals usually own 33% of the company unless someone is bring hotels or houses to put on the properties. In sets of two it’s usually 50/50, unless someone brings in hotels, in which case it might be 60/40, 65/35 or something of that sort. Those aren’t rules, those are just trends that I see in negotiations. Sometimes when someone is running low on capital they’ll do an IPO and sell stock of their company to help them get back on their feet. I’m sure you guys already know the basics of this so I won’t go too far into it. Bottom line, part of the profits go to other players in exchange for some quick cash.

All of these deals are done through contract with the parties involved.

Investment Management: This has been the newest idea and needs more testing, but it works by one player starting an “investment fund”. The hardest part (as in real life) is to convince other players to let the fund manager temporarily invest their money. The fund works by asking players for use of their money for a short amount of time (say two or three turns).

After all the money for the fund has been collected, the percentage ownership needs to be worked out and written down (if two players each put $500 in the fund, they have 50/50 ownership) and the fund managers cut needs to be negotiated (10% of profit or whatever they agree to). The fund manager has to entice other players to let him buy temporary partial ownership of their sets.For example, if the fund manager has $1000 to invest he may make an agreement with the Boardwalk Parkplace Co. to buy 20% ownership for two turns for a price of $400. The fund manager may then make an agreement with the owners of Pacific Ave., North Carolina Ave., and Pennsylvania Ave., for 35% ownership for two turns for a price of $350.

After the two turns are up, the money is handed to the original investors in the fund according to what percentage they own of the fund. So if each put in $500 originally and therefore have 50/50 ownership, they would divide the returns equally between the two of them, after the fund manager takes a percentage cut of the profit, of course. All of this is done through contracts. This is a good strategy to have if you do not end up owning the Boardwalk and Park Place set or dark green set.

Loans: The players that start out with the cash (bankers) are always hungry to give loans and there’s always demand for them. Whenever we first played the game the bankers bid each other down to loans with 1% interest. We slowly saw interest rates rise but never very much. We’ve come a long way and have since understood that you can’t make any money off of these loans unless the interest rate is at least 10%. This is usually around where the interest rates stay, but again everything is up for negotiation and it’s not just the original bankers that could give out loans either. Anyone who has the capital can make loans and co-author the contract with the other party. Do you notice how much we use written contracts?

Insurance: This is a fairly new concept in our games so we don’t have very much experience, but the idea is that someone would contract with another player to put in a certain amount of money in the event that they were going bankrupt. In exchange, they would pay them a fee on every one of their turns. Insurers could then contract with re-insurers using the same concept. If the insurer took a big hit by paying for some one else to be bailed out, the re-insurer would pay a certain amount to the insurer in exchange for small fees paid by the insurer to the re-insurer.

Law: There haven’t been many problems with enforcement because everything has really been taken care of by contract. However, we have had an unofficial form of polycentric law. When we play we usually have a large group of familly and friends sitting around who aren’t playing, so if a dispute comes up that hadn’t been clarified or enforced by a contract we’ll ask one of them whose opinion we would respect on the issue. This is very informal, and yet it is still efficient. In the future we’ll probably set contracts as to which neutral friend or relative we use to settle disputes or if we have to use only other players we’ll have to include clauses where bribing the arbiter will result in immediate loss in the case as well as paying the amount of bribe plus a penalty fine to the other party in the court case. It would also be a good idea to set up a list of arbiters to make an appeals court process. If the loser of a court case appeals to the next arbiter in line, his objectives would be twofold: 1. convince arbiter 2 that arbiter 1’s reasoning was based on things outside of the case or that arbiter 1 had other motives 2. if arbiter 2 has been convinced of arbiter 1’s fault then the cases must be argued.

Arbiters may have to be paid in order for them to give their services. In that case, they would have to compete for clients. Who knows. Overall, we don’t have many disputes that can’t be solved, but there are a few here and there.

Bankruptcy: We still need to formalize the process of bankruptcy but this is how we usually handle it in the following way. The player facing bankruptcy pays player who he directly owes and who’s payment will put him into bankruptcy. He may auction off property, houses, hotels, or loans and other assets if needed. Then he must pay oldest debts first working towards newest debts incurred.

Some possibilities: Chapter 7- The individual is completely insolvent and will be going out of the game (or they may just want to quit playing and declare chapter 7). The mutually agreed upon arbiter of creditor and debtor helps sell assets to pay off debts as fairly as the arbiter can decide. After assets have been auctioned off, the player is officially out of the game. Chapter 13- The individual is insolvent but has a decent capital structure that can be worked with. The arbiter of the creditor and debtor helps negotiate how much debt can be forgiven or suggest payment plans. Purpose of Chapter 13 is to reorganize debt to help creditors get some of their money back and so the individual in debt does not go out of the game prematurely.

Conclusion: This game is actually incredibly hard to win. Most games last 4-6 hours and many have gone unfinished. It turns out that free markets are actually pretty fair. Who would have thought?