To celebrate the week before Christmas (and give you a few great last minute gift ideas), The Simple Dollar is reviewing five board games that not only are a blast to play, but teach valuable financial lessons as well. All of these games should be easily found at a department store or a gaming specialty shop (check your local yellow pages). Other games in this series include The Game of Life and Monopoly.
I first discovered Modern Art during a “game night” held in my college dormitory. There were all the usual games there: Monopoly, Risk, and so forth, along with a few others I hadn’t seen before. One of these involved people staring at each other intently, then participating in an auction. As I moved closer to that table, I began to be sucked into one of the best games I’ve ever played.
How the game works Each player has a handful of cards that represent paintings by one of five different artists – you can think of the “artist” as being much like a suit in a normal deck of cards. The players go around the table and auction off the paintings, with the highest bidder collecting that painting. At the end of the round, the paintings are sold: the most popular artist has the most valuable paintings, followed by the next most popular artist, and so on. This gives the players money with which to bid the next round. It’s worthwhile to note that artists maintain their popularity into future rounds, so artists popular early on will always have some value to their paintings. The winner is the player with the most money at the end of four rounds.
In essence, the paintings are like any free market, and that’s what makes Modern Art so interesting: it’s the best game I’ve ever played for teaching the concepts of a free market. What can be learned from it?
Relative values change over time As the game goes on, some artists stagnate in value, while others suddenly skyrocket. If you keep betting on the same horse over and over, you’re going to lose out to people who diversify their investments.
You win by finding bargains and riding their escalation The real key to success at Modern Art, just like in the stock market, is looking at the game situation in front of you and determining which artist is going to make the biggest value jump in this round, then buying that artist’s paintings. The best investor will be the one that picks right.
Bubbles will always burst Whenever people start bidding like crazy for one artist, a good player (and investor) will hold off on investing and will look for something else to invest his or her money on. After a round or two, the bubble will burst and those paintings will be too expensive at auction to turn a strong profit on.
The art of negotiation A big part of this game is knowing how to negotiate with other players, mostly in terms of convincing them to not participate in auctions that you are hoping to corner. This usually ends up with various types of negotiations, including manipulating auctions on some paintings. It’s up to you to determine how much of this to allow, of course, but it can get very interesting.
Aesthetics versus the bottom line Another interesting aspect of this game is how many players seem to bid in relation to their personal feelings about the paintings themselves, even though it really doesn’t matter in the game. This can cause some players to train-wreck their own game, much like investors who bought into sexy stocks like Enron.
Different forms of auctions mean different strategies The game allows several different kinds of auctions, from a “once around” auction to a double-painting auction and several other variants. Each one requires a careful evaluation of what’s actually for sale and what other players are doing.
Aside from some very complicated (and often boring) board games, this is the best version of an open market I’ve ever seen in a game – plus it’s incredibly fun to play. If you want to teach (and learn about) the open market to someone, this is easily the most enjoyable way to do it. You might even find yourself playing it again and again – it takes only about an hour to play, and it gets very interesting as the players gain more skill at the game (i.e., they understand the market better).