I didn't understand the psychology of bank CEO's who destroyed storied institutions by turning all their capital into risky securities until I played Monopoly with my four-year-old daughter. My daughter loves Monopoly, and even though she doesn't really understand it she usually wins. That's because after about half an hour, she gets bored and wants to stop. We add up the money and property and she often has the most. In our last game she tried a new strategy - she didn't buy anything. She still won. If you play for the very short term, Monopoly is essentially a game of chance. Whether you win depends entirely on when you stop. Finally, as my wife observed, if you play (markets, monopoly) for the short-term, you're not invested in the future - not committed to preserving anything, doing what's best to keep the institution going, etc.
Monday, February 23, 2009
Monopoly Money
I didn't understand the psychology of bank CEO's who destroyed storied institutions by turning all their capital into risky securities until I played Monopoly with my four-year-old daughter. My daughter loves Monopoly, and even though she doesn't really understand it she usually wins. That's because after about half an hour, she gets bored and wants to stop. We add up the money and property and she often has the most. In our last game she tried a new strategy - she didn't buy anything. She still won. If you play for the very short term, Monopoly is essentially a game of chance. Whether you win depends entirely on when you stop. Finally, as my wife observed, if you play (markets, monopoly) for the short-term, you're not invested in the future - not committed to preserving anything, doing what's best to keep the institution going, etc.
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