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Monopoly[R] pricing.


There is a large and rich literature in economics on monopoly pricing (e.g., see the reviews in Braeutigam 1998; Ordover and Saloner 1998; Varian 1998). However, a close examination of this literature reveals a surprising gap: there have been virtually no studies on Monopoly[R] pricing. We propose to fill that void with an empirical examination of the pricing of the board game Monopoly[R]. In particular, we examine market-level, quarterly prices from 1990 to 2002 and find evidence of customary pricing.


The board game Monopoly[R] was patented in 1935 by Charles Darrow, who later sold the rights to Parker Brothers. However, questions have been raised about the legality of the 1935 patent. The game Darrow patented (and claimed to have invented) is similar to a game patented in 1904 by Elizabeth J. Magie, which was designed to educate people about the tax proposals of Henry George (George 1879); in particular, one variation of the rules illustrated how a land tax would affect landlords' profits. Magie's game was originally called "The Landlord's Game" but was also known as "Monopoly" or "Finance" (Anspach 2000). Charles Darrow, who played Magie's game, misrepresented himself as its inventor and was erroneously allowed to patent it in 1935 after Magie's patent expired (Anspach 2000; Orbanes 2006; Supreme Court of the United States 1982). Because the game was in the public domain after the expiration of Magie's 1904 patent, Darrow effectively "enclosed" it. Moreover, a former Parker Brothers executive describes the legality of the 1935 patent as "probably weak to begin with" (Orbanes 2006, p. 76) because it was filed after the legal grace period. Although the 1935 patent expired in 1952, ongoing trademark protection of the name Monopoly[R] and copyright protection of the game's visual design (1) ensure that Parker Brothers remains a monopolist over Monopoly[R].

Not surprisingly, the monopolists of Monopoly[R] have aggressively sought to block entry by rival games. Between 1935 and 1940, Parker Brothers sued and forced out of the market two close competitors named New York and Big Business (Orbanes 2006). They also used the court system to temporarily block (between 1973 and 1985) the entry of a rival game named Anti-Monopoly[R], which was created by Ralph Anspach, an economics professor at San Francisco State University (Anspach 2000; Supreme Court of the United States 1982). Anspach countersued, with the result that the monopolist over Anti-Monopoly[R] sued the monopolist over Monopoly[R] for antitrust violations (Anspach 2000).

Parker Brothers (now a division of Hasbro) does not release annual sales figures, but it claims that Monopoly[R] is the best-selling board game in the world, with over 250 million units sold and 480 million players since 1935 (Hasbro 2007).

We are aware of only one previous study that even tangentially examined Monopoly[R] pricing. Besley and Rosen (1999) estimate the extent to which sales taxes are shifted to consumer prices for 12 commodities (including Monopoly[R]) and use those estimates to make inferences about market structure. They fail to reject the hypothesis that sales taxes on Monopoly[R] are fully shifted to consumers, which is consistent with a perfectly competitive Monopoly[R] market.


In this paper we examine the nominal price of a new Parker Brothers' Monopoly[R] board game edition #9 (this is the usual game with properties named after Atlantic City locations, not any new city-specific editions or other special editions), by metropolitan area, from 1990 quarter l to 2002 quarter 4. The data were collected by and purchased from the Council for Community and Economic Research (C2ER), formerly known as the American Chamber of Commerce Research Association (ACCRA). Data are not available for prior to 1990 quarter 1, and after the fourth quarter of 2002 the C2ER ceased to collect prices on the Monopoly[R] board game. All prices exclude sales tax. Data for cities in Alaska, Hawaii, and Canada are excluded from the analysis. For certain quarters no data were collected from certain metro areas and as a result it is an unbalanced panel.

C2ER collects data on the prices of a variety of consumer items. Some are completely homogeneous (like Monopoly[R]) but some are quite heterogeneous (such as doctor and veterinary visits, a new house, or a rental apartment). To generate an average price for the heterogeneous items, data collectors are asked to record prices from a number of establishments, the exact number of which varies with the size of the metro area. For large metropolitan areas (over 1 million population), C2ER recommends collecting price data from 10 establishments, for smaller metropolitan areas 5 are requested, and for non-metro areas 3-5 are requested. Prices from multiple establishments are collected even for the perfectly homogeneous items such as the Monopoly[R] game. C2ER then reports the simple average of these prices for each metro area; it is these average prices that we study because the individual establishment-specific prices are unavailable from C2ER. Because every unit of Monopoly[R] edition #9 is identical, we assume that the Law of One Price holds within each market and that the averages represent the uniform price of Monopoly[R] in the metropolitan area at that time. C2ER undertakes a variety of checks and precautions to ensure the accuracy of the data; see Council for Community and Economic Research (2006).


A histogram of the nominal prices (for all metropolitan areas and for all quarters 1990-2002) is provided in Figure 1. A significant feature of the histogram is that it exhibits large spikes at the prices $9.98, $9.99, $10.98, $10.99, $11.98, and $11.99. To show the mass at these spikes, Table 1 lists the 10 most common Monopoly[R] prices and how frequently they occur in the data. Each of the most common prices is 1-3 cents less than a round number (which could be dollars or half dollars). In contrast, round dollar prices appear rarely in the data. For example, the three most common prices in the data were: $10.98 (3.75% of the sample), $10.99 (2.70%), and $10.97 (2.09%), but the round price of $11.00 constitutes just 0.09% of the sample. In other words, the price was 95 times more likely to be one to three pennies less than $11.00 than exactly $11.00. Likewise, prices of $9.99 (1.92% of the sample), $9.98 (1.52%) or $9.97 (1.50%) were far more likely than a round price of $10.00 (0.06% of the sample). Put another way, the price was 82 times more likely to be 1-3 cents below $10.00 than exactly $10.00.


We next examine only the last digit of the price. Figure 2 is a histogram depicting the frequency with which each number from 0 to 9 appears as the last digit in the price. Across all metropolitan areas and time (quarterly, 1990-2002), 23.2% of all prices end with a 9 and 19.0% end with an 8. In contrast, prices ending with a zero are least likely and account for only 4.2% of the sample. (2) Broadening our examination to the last two digits of price, we find large spikes for certain two-digit price combinations. Specifically, 8.7% of the prices in the sample end with 99 (e.g. $10.99) and 7.4% end with 98 (e.g. $10.98). In contrast, only 0.3% of prices end with 00 (e.g. $10.00 or $9.00).

These data are consistent with customary pricing, which has also been called psychological pricing (Friberg and Matha 2004; Kreul 1982) or odd pricing (Stiving and Winer 1997). Vendors who engage in customary pricing tend to charge prices that end with a 9 or 8 and particularly avoid prices that end with 0 (Gedenk and Notes: Data: C2ER prices for Monopoly[R] board game, by metropolitan area, 1990 quarter 1 through 2002 quarter 4. Sattler 1999; Twedt 1965). This phenomenon has been studied in the economics and marketing Literatures since the 1930s (Bader and Weinland 1932; Ginzberg 1936). Under customary pricing, prices are sticky. Rather than moving smoothly or continuously along the price line, retailers react to variation in costs and the price elasticity of consumer demand by occasionally making large price jumps to another customary price (e.g. from $9.99 to $10.99). We investigated whether the spikes in the data for all years pooled are due to changes in the manufacturers' suggested retail price (MSRP) over time. Hasbro refused to disclose to us the history of their MSRP, but multiple spikes at customary prices (e.g. $9.99, $10.99, and $11.99) appear in every quarter and year, suggesting that either the MSRP is not strictly followed or the manufacturer recommends different retail prices to different retailers.



We also explore a different set of Monopoly[R] prices: those of the 28 properties on the Monopoly[R] board, ranging from $60 for Mediterranean Avenue to $400 for Boardwalk. (3) Figure 3 shows that these prices are not consistent with customary pricing; they all end with zeros and tend to vary in units of $20. Figure 3 also exhibits a railroad spike at $200, reflecting the prices of the Reading, Pennsylvania, B&O, and Shortline properties. Another source of relevant price data is the rent charged to the player who lands on an owned property; however, a study of Monopoly[R] rents is beyond the scope of this paper.



This note contributes to the vast literature on monopoly pricing by studying Monopoly[R] pricing. In particular, we find that Monopoly[R] prices in various markets of the U.S. from 1990 to 2002 are consistent with customary pricing.

There are several unresolved questions about customary pricing. First, it is unclear why customary pricing is so common. Stiving and Winer (1997) categorize the most common theories, which include these: consumers round prices down or consumers view 9-ending prices as a signal of a price discount. The second unresolved issue is the extent to which customary prices enhance sales or profits (Basu 1997; Ginzberg 1936); a literature review by Gedenk and Sattler (1999) finds that the empirical literature is almost evenly split between finding no effect or a positive effect (on retail sales) of 9-ending prices, with only a few studies finding negative effects. Resolving these research questions is an area for future research.

We are Sorry[R] for the limitations of this paper, and hope that the reader does not consider this to have been a Trivial Pursuit[R]. In follow-up work we plan to investigate attitudes towards Risk[R] and pursue the obvious extensions in Game Theory, although we do not have a Clue[R] how we will put those plans into Operation.[R] (4)

doi: 10.111l/j.1465-7295.2009.00199.x


ACCRA: American Chamber of Commerce Research Association

C2ER: Council for Community and Economic Research

MSRP: Manufacturers' Suggested Retail Price


Anspach, R. The Billion Dollar Monopoly[R] Swindle, 2nd ed. Redwood City, CA: XLibris, 2000.

Bader, L., and J. D. Weinland. "Do Odd Prices Earn Money?" Journal of Retailing, 8, 1932, 102-4.

Basu, K. "Why are so many goods priced to end in nine? And why this practice hurts the producers.". Economies Letters, 54, 1997, 41-44.

Besley, T., and R, Harvey. "Sales Taxes and Prices: an Empirical Analysis." National Tax Journal, 52(2), 1999, 157-78.

Braeutigam, R. R. "Optimal Policies for Natural Monopolies." In Handbook of Industrial Organization, vol. 2, Chap. 23, edited by R. Schamensee and Robert Willig. New York: North-Holland, 1998.

Chernow, R. The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance. New York: Touchstone/Simon & Schuster, 1990.

Council for Community and Economic Research. Manual: ACCRA Cost of Living Index. Arlington, VA: Council for Community and Economic Research, 2006.

Friberg, R., and T. Y. Matha. "Does a Common Currency Lead to (More) Price Equalization? The Role of Psychological Pricing Points." Economics Letters, 84(2), 2004, 281-87.

Gedenk, K., and H. Sattler. "The Impact of Price Thresholds on Profit Contribution--Should Retailers Set 9-Ending Prices?" Journal of Retailing, 75(1), 1999, 33-57.

George, H. Progress and Poverty: An inquiry into the cause of industrial depressions and of increase of want with increase of wealth ... The Remedy. New York: D. Appleton, 1879.

Ginzberg, E. "Customary Prices." American Economic Review, 26(2), 1936, 296.

Hasbro. 2007, Story of the Monopoly Game. Press release.

Kreul, L. M. "Magic Numbers: Psychological Aspects of Menu Pricing." Cornell Hotel and Restaurant Administration Quarterly, 23, 1982, 70-75.

Orbanes, P. E. Monopoly: The World's Most Famous Game & How it Got That Way. Cambridge, MA: Da Capo Press, 2006.

Ordover, J. A. and G. Salouer. "Predation, Monopolization, and Antitrust." In: Handbook of Industrial Organization, vol. 1, Chap. 9, edited by R. Schamensee and R. Willig. New York: North-Holland, 1998.

Stiving, M., and R. S. Winer. "An Empirical Analysis of Price Endings with Scanner Data." Journal of Consumer Research. 24(1), 1997, 57-67.

Supreme Court of the United States. Anti-Monopoly Inc. v. General Mills Fun Group, Inc. No. 81-4281, 1982.

Twedt, D. W. "Does the "9 Fixation" in Retail Pricing Really Promote Sales?" Journal of Marketing, 29, 1965, 54-55.

Varian, Hal. "Price Discrimination..+ in Handbook of Industrial Organization, vol. 1, Chap. 10, edited by R. Schamensee and R. Willig. New York: North-Holland, 1998.

(1). Parker Brothers' copyright of the game's visual design covers the cartoon financier with a top hat. tuxedo, cane. and white handlebar moustache, based on J. P. Morgan (Orbanes, 2006), who achieved near-monopoly power in certain railroad, steel, and banking markets (Chernow, 1990).

(2.) In each case, we reject the hypothesis that the final digit appears 10% of the time; for the digit 4 we reject at the 2% significance level and for all other digits we reject at the 1% significance level.

(3.) We question the utility of the Electric Company and Water Works data.

Cawley: Department of Policy Analysis and Management Cornell University, Ithaca, NY. Phone 607-255-0952, Fax 607-255-4071, E-mail

Kenkel: Department of Policy Analysis and Management Cornell University, Ithaca, NY. Phone 607-255-2594, Fax 607-255-4071, E-mail
Most Common Monopoly[R] Prices, 1990-2002

Frequency Rank Price ($) Frequency (%)

1 10.98 3.75
2 10.99 2.70
3 10.97 2.09
4 9.99 1.92
5 11.99 1.76
6 9.98 1.52
7 9.97 1.50
8 11.98 1.31
9 10.48 1.19
10 12.99 1.11
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Author:Cawley, John; Kenkel, Donald S.
Publication:Economic Inquiry
Geographic Code:1USA
Date:Apr 1, 2010
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