Almost Everything I Need to Know About the New Economy, I Learned Playing . . . Monopoly

13 Pages Posted: 16 Mar 2001

See all articles by Paul Farris

Paul Farris

University of Virginia - Darden School of Business

Phillip E. Pfeifer

University of Virginia - Darden School of Business

Date Written: September 2001

Abstract

In this note, the authors use the familiar game of Monopoly to illustrate the new economy phenomena of network effects, increasing returns, positive feedback, and bifurcation points in complex systems. They argue that the "new economy" is not really so new if it shares so many characteristics with an "old economy" game. In any case, it will be easier to understand the important characteristics of a "winner-take-all" economy in the context of this family game that is surprisingly complex. The note makes an effort to differentiate between increasing returns and positive feedback, two concepts that are often confused and sometimes treated as if they were equivalent to each.

Suggested Citation

Farris, Paul and Pfeifer, Phillip E., Almost Everything I Need to Know About the New Economy, I Learned Playing . . . Monopoly (September 2001). Darden Business School Working Paper No. 01-07. Available at SSRN: https://ssrn.com/abstract=263526 or http://dx.doi.org/10.2139/ssrn.263526

Paul Farris (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-0524 (Phone)

HOME PAGE: http://www.darden.virginia.edu/faculty/farris.htm

Phillip E. Pfeifer

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4803 (Phone)

HOME PAGE: http://www.darden.virginia.edu/faculty/Pfeifer.htm

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