A market in which one supplier dominates and sets price and quantity of the good.
The assumption in monopoly is that there are no substitutes and the firm is thus a price-maker. The firm may be motivated by profit maximization, and restrictive barriers to entry of the market prevent competition. Output is set at the point at which marginal revenue equals marginal cost.
Critics of this system argue that prices are far higher and output much lower than under other forms of competition. As a result, legislation has been introduced to restrict the power of monopolies.
Also see: imperfect competition, monopolistic competition, bilateral monopoly, duopoly theory
The history of Monopoly can be traced back to 1903, when American anti-monopolist Lizzie Magie created a game which she hoped would explain the single tax theory of Henry George. It was intended as an educational tool to illustrate the negative aspects of concentrating land in private monopolies. She took out a patent in 1904. Her game, The Landlord’s Game, was self-published, beginning in 1906.
Magie created two sets of rules: an anti-monopolist set in which all were rewarded when wealth was created, and a monopolist set in which the goal was to create monopolies and crush opponents.
Several variant board games, based on her concept, were developed from 1906 through the 1930s; they involved both the process of buying land for its development and the sale of any undeveloped property. Cardboard houses were added and rents increased as they were added to a property. Magie patented the game again in 1923.
According to an advertisement placed in The Christian Science Monitor, Charles Todd of Philadelphia recalled the day in 1932 when his childhood friend, Esther Jones, and her husband Charles Darrow came to their house for dinner. After the meal, the Todds introduced Darrow to The Landlord’s Game, which they then played several times. The game was entirely new to Darrow, and he asked the Todds for a written set of the rules. After that night, Darrow went on to utilize this and distribute the game himself as Monopoly.
Parker Brothers bought the game’s copyrights from Darrow. When the company learned Darrow was not the sole inventor of the game, it bought the rights to Magie’s patent for $500.
Parker Brothers began marketing the game on November 5, 1935. Cartoonist F. O. Alexander contributed the design. U. S. patent number US 2026082 A was issued to Charles Darrow on December 31, 1935, for the game board design and was assigned to Parker Brothers Inc. The original version of the game in this format was based on the streets of Atlantic City, New Jersey.
In 1936, Parker Brothers began licensing the game for sale outside the United States. In 1941, the British Secret Intelligence Service had John Waddington Ltd., the licensed manufacturer of the game in the United Kingdom, create a special edition for World War II prisoners of war held by the Nazis. Hidden inside these games were maps, compasses, real money, and other objects useful for escaping. They were distributed to prisoners by fake charity organizations created by the British Secret Service.
In the Nazi-occupied Netherlands, the German government and its collaborators were displeased with Dutch people using Monopoly Game sets with American or British locales, and developed a version with Dutch locations. Since that version had in itself no specific pro-Nazi elements, it continued in use after the war, and formed the base for Monopoly games used in the Netherlands up to the present.
Economics professor Ralph Anspach published Anti-Monopoly in 1973, and was sued for trademark infringement by Parker Brothers in 1974. The case went to trial in 1976. Anspach won on appeals in 1979, as the 9th Circuit Court determined that the trademark Monopoly was generic and therefore unenforceable. The United States Supreme Court declined to hear the case, allowing the appellate court ruling to stand. This decision was overturned by the passage of Public Law 98–620 in 1984. With that law in place, Parker Brothers and its parent company, Hasbro, continue to hold valid trademarks for the game Monopoly. However, Anti-Monopoly was exempted from the law and Anspach later reached a settlement with Hasbro and markets his game under license from them.
The research that Anspach conducted during the course of the litigation was what helped bring the game’s history before Charles Darrow into the spotlight.
In 1991, Hasbro acquired Parker Bros. and thus Monopoly. Before the Hasbro acquisition, Parker Bros. acted as a publisher only issuing two versions at a time, a regular and deluxe. Hasbro moved to create and license many other versions of Monopoly and sought public input in varying the game. A new wave of licensed products began in 1994, when Hasbro granted a license to USAopoly to begin publishing a San Diego Edition of Monopoly, which has since been followed by more than a hundred more licensees including Winning Moves Games (since 1995) and Winning Solutions, Inc. (since 2000) in the United States.
In 2003, the company held a national tournament on a chartered train going from Chicago to Atlantic City (see § U.S. National Championship). Also in 2003, Hasbro sued the maker of Ghettopoly and won. In February 2005, the company sued RADGames over their Super Add-On accessory board game that fit in the center of the board. The judge initially issued an injunction on February 25, 2005, to halt production and sales before ruling in RADGames’ favor in April 2005.
In 2008, the Speed Die was added to all regular Monopoly set. After polling their Facebook followers, Hasbro Gaming took the top house rules and added them to a House Rule Edition released in the Fall of 2014 and added them as optional rules in 2015. In January 2017, Hasbro invited Internet users to vote on a new set of game pieces, with this new regular edition to be issued in March 2017.
On May 1, 2018, the Monopoly Mansion hotel agreement was announced by Hasbro’s managing director for South-East Asia, Hong Kong and Taiwan, Jenny Chew Yean Nee with M101 Holdings Sdn Bhd. M101 has the five-star, 225-room hotel, then under construction, located at the M101 Bukit Bintang in Kuala Lumpur and would have a 1920s Gatsby feel. M101’s Sirocco Group would manage the hotel when it opens in 2019