I'll Take Park Place For $200: Using Game Theory To Teach Personal Finance Lessons

Two kids playing a game of cards

As parents of school aged kids across the nation are being asked to help navigate learning at home, they are coming up with creative ways to keep their children focused and interested. If we have to do this, why not have some fun. One option is using a game to teach the lessons.

This idea of "Game Theory" can also be applied to teaching financial wellness. We recently came across an article exploring the concept of using the game monopoly to teach five fundamental lessons of personal finance. The game Monopoly helps kids practice basics like addition and subtraction, but there's a lot more to it. Let's break it down.


Every property on the Monopoly board is different. Some cost more than others and each pays a different rental rate. As a result, some are much better deals than others.

Kentucky Avenue, for example, costs $220 and its rent is $18, resulting in a yield of about 8%. Meanwhile, Boardwalk is much more expensive, at $400, but its rent is also higher, at $50, putting its yield at 12.5%. This makes Boardwalk a much better buy, even though it’s so much more expensive.

Little kids tend to focus only on the prices of properties, but this is an opportunity to teach them about rates of return.

Total return 

An asset may be worth more to someone else than it is to you. In fact, the often-overlooked reason the game is called Monopoly is because players can double the rents they earn when they own all the properties in a set. If another player has all but one of the properties in a set, and you hold the remaining one, he or she might pay an above-market rate to buy it from you. That’s the second lesson. Most assets carry two types of return potential: income and appreciation. Whenever you’re evaluating a purchase, you want to consider both.

Enter To Win sign with clouds and sky background


Chance cards illustrate the role of luck—both good and bad—in everyone’s financial life. Sometimes, good fortune drops out of the sky (“Advance to Go, Collect $200”). Sometimes, bad luck comes along (“Speeding Fine, Pay $15”).

Lesson: Life isn’t always predictable and it isn’t always fair.

But there are ways to protect yourself from bad luck, including holding more cash than you think you’ll ever need. Like opening a savings account  or money market account.


If a player ends up in financial distress, properties can be mortgaged to raise cash or they can be sold to another player. But you might end up selling at a fire-sale price. There are lessons in this about leverage, liquidity and financial stability.

Risk on Black-Golden Watch Face with Watch Mechanism. Full Frame Closeup.

Risk preference 

Monopoly participants seem to fall into three groups, each with varying degrees of risk aversion.

  • Some rarely buy properties, so as to conserve cash.
  • Others are willing to open their wallets, but only for properties they think make sense.
  • The third group are willing to spend top dollar buying up the most valuable properties—and they’ll spend even more to populate them with houses and hotels.


In Monopoly, as in real life, the amount of risk you decide to take is a choice—but only to an extent. Those who take too little risk can see their savings dwindle. Those who take too much risk can, of course, fall into bankruptcy. Monopoly does a good job illustrating how risk is a choice, but only within certain boundaries.


While Monopoly mirrors real life in multiple ways, there are two respects in which it’s unrealistic.

  • First, when you set up a Monopoly game, each player receives the same amount of cash. That makes sense for a kids’ game. But, of course, that isn’t how the real world works. Monopoly would be a different game if each player started with a different amount of cash. That’s a different kind of lesson, but probably worth pointing out to children.
  • Second, Monopoly is all about buying and selling investments. There’s no concept of work. For most people, though, you can’t start investing until you’ve spent some time working and saving. That probably would have been difficult to build into the game, but it is a key shortcoming. By ignoring the value of work, it leaves players with the idea that the only way to build wealth is by investing.

In order for any of us to get through this unusual time, we have to find ways to have fun. Using games to teach lessons is just one way to do this. We are here for you Minnesota. Hang in there... eventually we will pass GO again.




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