Day One of the Money and Politics Game
Hannah Schwennesen
Dr. Hubert Bray
Math 89S: Game Theory and Democracy
October 2, 2013
SUMMARY
Day one of the Money and Politics game consisted of 21 players, each with the
individual goal to maximize his/her profits, disregarding the profits of other players. All
players were given 9 chips except for two randomly selected players who were given 50
chips. Players were allowed to collaborate via email prior to the actual start of the game,
and many took advantage of this opportunity. Of 21 players, 9 made alliances before the
start of the game. One player, Nick, emailed the entire group of players to propose his plan
for a “utopian” format for the class. He argued that the best way to fully maximize the
profits of each individual player was to create a level playing field that would greatly
promote investment in the economy. He stated that playing with the interests of others in
mind would allow the class to have the greatest average return on investment when
compared to classes that played the game in the past. Although some students were
skeptical of the possibility of such an ideal situation, many were impressed by the proposal
and ready to implement it during the game.
At the start of the game, Nick was unanimously elected president; most players felt
as though he would have the greatest motivation to maintain a utopian society as the
creator of the idea. After being elected, Nick stated that he would keep the government
treasury separate from his personal funds (which was not required by the rules of the
game) and that he would use money from the treasury to help out those who lost their chips
on bad investments. Nick consulted all players when deciding upon the tax rate; the group
agreed to set taxes at 20% in order to build up a treasury that could assist bankrupt players.
During the first round, many players invested around 20% of their chip totals on
their own turns. Three groups formed in which players invested on each of their group
members’ turns and received the profit or suffered the loss of the chips that they invested
individually. After the initial, “experimental” round, players observed that investing with
others was the most successful strategy because it maximized the number of times players
could invest each round. For the remainder of the game, players formed small investment
groups with which to implement this strategy. Nick remained president throughout the
entire game and no disapproval was explicitly expressed. He kept taxes at 20% to maintain
a sufficient treasury and established several tax-free rounds whenever the treasury reached
an amount with which all players felt comfortable. On several occasions, he awarded funds
from the treasury to players who had no chips remaining after a bad investment. His low
taxation policy and treasury handouts encouraged players to be more aggressive in their
investments.
One group of five players, who were situated in a compact formation at the center of
the room, formed an alliance within the first two rounds of the game. They were the most
successful of all groups, with an average rate of return on investments per round of 77%.
The group’s success originated mostly in their aggressive strategy; they invested a much
larger portion of their individual funds than any other group of players. Additionally,
players in the group quickly developed a network of trust within their alliance that other
groups lacked.
Several players on day one decided to work alone and invest only on their individual
turns, which proved to be the least successful strategy. These players had much fewer
opportunities to invest their chips than players who had alliances, and they required
assistance from the government on multiple occasions. The average return on investment
per round for those who invested on their own was 20%.
Overall, the utopian strategy was successful in promoting a high average rate of
return for the entire class, which was 51% at the end of day one.
Day One of the Money and Politics Game
On the first day of play for the freshmen enrolled in the Game Theory and
Democracy seminar in fall of 2013, there were 21 students participating in the Money and
Politics Game. Every student received 9 chips at the start of the game, with the exception of
two randomly chosen students who were given 50 chips. Dr. Bray, moderator of the game,
informed the students that the goal of the day’s game was to maximize one’s personal
wealth as much as possible, disregarding the wealth of others in the class.
Dr. Bray allowed students to politic through email correspondence prior to the day
of play. One particular student, Nick, took advantage of this strategy and emailed all
students with a proposal. He suggested that the students structure the class like a utopian
society with the main goal of maximizing everyone’s success. He argued that this strategy
would allow the class to have the greatest return on investment out of all past classes.
Although his plan was not explained extensively, he did mention a redistribution of wealth
from the government treasury in order to stimulate the economy. Most students received
his proposal positively, though there were some skeptics who doubted how presidential
corruption could be avoided. Some students suggested that laws be put in place to limit the
power of the president; Nick did acknowledge the possibility of such rules, but he argued
that the nature of majority rule would be the best limit to presidential power. One particular
student, Basil, suggested (via email) that the entire class invest together on each turn in
order to maximize investment return. However, students were informed of his plan after
the idea for a utopian society was mentioned and no students responded.
Many students did form alliances before the game started. Nine of the twenty-one
students had established an alliance with at least one other student via email
correspondence or conversation before the start of the game. Some players, including
Bemenet, Gloria, and David, also developed the strategy of sitting at a central seat at the
long table so that they could have the power of the swing vote if the class ever became
divided. Others thought of very basic plans to pool investments with their classmates to
make greater investments, and a few had set a percentage of their income that they would
invest each turn. One group of three students (Isaac, Alex Z., and Brian) developed a
strategy in which they would bet chips from the treasury and collect the profits. They
planned to implement this strategy by gaining the presidency and promising to insure all
bets made from the government treasury with their personal funds. Overall, however,
strategies formed before the game, aside from Nick’s utopian idea, were undeveloped and
did not have much effect on the game.
Once play began, students unanimously decided upon Nick as president, for they
assumed that he would have the greatest interest in pursuing his peaceful proposal. At this
point, it became clear to Isaac, Alex Z., and Brian that they would not be able to implement
their strategy, for most players already supported the idea of a utopian society. Nick asked
all students to voice their opinions on what should be selected as the tax rate, thus
simulating a democratic system. A tax rate of 20% was chosen in order to build up a
sufficient treasury that could be used to help those who lost a large percentage of their
chips in one investment. Nick made a very obvious effort to show that he was separating his
personal funds from the treasury so that his constituents would trust him. He also stated
that players would be awarded chips from the treasury if they lost all of their chips on a bad
investment, although he did not quantify how many chips bankrupt players would receive.
On the first round of investment, many students invested on their own; some made
small profits, while others lost money or broke even. Three groups of players did decide to
pool their investments on this round; the players simply gave some of their chips to their
neighbors and asked to be given the profits if the investment was successful. Because the
goal of the game was to maximize individual profit, which did not require players to
compare themselves to each other, those who allowed others to invest on their turns did
not feel threatened by other players who made a profit using this technique. They felt that it
gave them the ability to form alliances that would be helpful throughout the game. Hannah
and Tony N. had formed an alliance before the start of the game and had agreed to invest
equal amounts on each other’s turns to maximize the amount of money they were investing.
Their strategy was not as successful as others’ strategies in the first round in terms of an
increase in chip count; however, they did establish an efficient system for returning profits
to each player involved in the investment. They decided that each player should receive an
equal proportion of the profit after each round as long as initial investments were the same.
Another group of players, Isaac, Alex Z., and Brian, invested chips together during the first
round in a similar fashion; however, they did not invest equal numbers of chips, so the
redistribution of profits was more complicated than that of Tony N. and Hannah. The third
group of players, Bemenet, Gloria, and David, also adopted this “pooled investment”
strategy. The group was able to make the greatest profit out of all those who chose the
pooled investment strategy. Most of the other players in the room caught onto this strategy
at the end of round one, and the pooled investment strategy dominated for the remainder of
the game.
The following rounds consisted of players scrambling to form small groups in which
to invest their money over multiple turns. The group of players in the central section of the
room, which consisted of Alex M. and Chi-Chi in addition to Bemenet, Gloria, and David,
formed an alliance immediately during the second turn. After this point, they chose to limit
their group to five members to keep their investment system more organized. They decided
to invest a very large portion of their chips on each players’ turn, which ended up being
beneficial for the group because they were able to double or triple their chips on most turns
that round. Therefore, their profits increased exponentially during the first round, and they
were able to invest even greater amounts of chips in the ensuing rounds. They redistributed
their profits after each player’s turn in order to develop a sense of trust between group
members. Once the group was confident in the loyalty of each member, they decided to
distribute the profits at the end of each round. They invested a much larger portion of their
chips at each turn than any of the other groups, which led to very high rates of return for the
group members. Overall, the 5 players of this alliance ended the day with more chips than
all other players except Jenna, who started with 50 chips. Chi-Chi and Alex M. were even
able to surpass Jenna in their final chip counts even though they both started with only 9
chips each. Overall, the average percent return on investment per round for the group was
77%, which was much greater than the rate of return of any other group.
Hannah and Tony N. formed an alliance with Nick, Alec, and Cameron. This group
also required members to contribute the same amount to the investment each turn and
redistributed profits after each turn. Within the group, Hannah, Tony N., and Cameron
corresponded via email concerning the overthrow of Nick as president; however, the group
refrained from doing so because of his generous tax policies. Members of this alliance ended
up with variable chip totals at the end of the game, and the average percent return on
investment per round for the group was 47.6%. Alec was the most successful member of the
group in terms of final ranking amongst the class, for he ended as the 7th richest of all
players. However, he started with 50 chips and thus had a very low rate of return per round
(20%). Hannah was least successful with a final ranking of 15th.
Another group of students, including Jenna, Alex Z., Brian, Isaac, and Hilary, formed
an alliance; this group was centered in the original alliance formed between Isaac, Alex Z.,
and Brian. They used a less organized system for distributing profits. Each person placed
whatever amount they chose into their central “treasury,” which was invested by the person
whose turn it was. At the end of each turn, players in the alliance individually collected what
they determined to be their investment return, and there was no central figure to determine
if the chips were being distributed appropriately. Players in this group communicated via
text message during the game. The average percent return on investment per round for this
group was 44.8%, with the highest-ranked player in 3rd place (Jenna) and the lowest-ranked
player at 18th (Isaac). Although Jenna did end up with a very high chip total, her rate of
return was the lowest of the group (34%) because she started the game with 50 chips.
A fourth group consisted of Tony Q, Basil, and Kushal, who used a strategy similar to
that of Tony N.’s group in which all members invested equal numbers of chips on each
member’s turn and distributed the profits after each turn. They began investing together
during the second half of the game, so it was difficult for them to catch up to the group that
made the highest profits. The average percentage of return on investments per round for
this group was 55%, with Kushal as the richest in 9th place and Tony as the poorest in 14th
place.
Some players did elect to invest on their own throughout the entire game, despite
recruitment attempts by the allied groups. Ben purposefully resisted making alliances on
the first day to determine if he could keep up with the rest of the players on his own. He was
unable to make a large profit by himself, and ended the day in last place with a rate of
return around 9%, which he attributed mostly to the chips given to him by the government
treasury. Lauren also refrained from allying herself with others during the first day of play,
which led to her final ranking of 20th in the class with a rate of return around 31%. She was
also assisted by handouts from the treasury throughout the game.
Nick remained president of the class throughout the game given his favorable tax
policies and his perceived commitment to do what was beneficial for the class as a whole.
Not only did he keep the treasury separate from his personal funds, but he also kept the
taxes at a rate of 20% and gave the class a “tax break” every few rounds when the treasury
was at a sufficient level. He provided money from the treasury to those who lost all of their
chips on bad investments as a method to stimulate the economy. Most students were very
pleased with Nick’s presidency, though a few members of Tony N.’s group did make plans to
overthrow him that were never executed. There was a general trust in Nick’s judgments
because of a perception that he made the system fair for every player. Therefore, players
did not feel the need to elect a new president because most were benefiting from his
policies.
Although Nick did not face any obstacles in maintaining his utopian society, he was
prepared to punish players who actively worked to the detriment of others. He stated that
he would have taxed a player at 100% if that player had stolen chips from another in a
group investment scenario. According to his report, he was willing to work ruthlessly for a
utopian society because he knew that it would allow him to gain the greatest personal
profits, which was the goal of day one’s game. He felt that he needed to maintain his role of
president in order for the utopian society to succeed.
Bemenet’s group, which profited the most on day one, was also prepared to retaliate
against a change in the political system. Players in this alliance stated that they had planned
on combating a new tax strategy by forming a new majority with the players on either side
of their group. They felt that they had a good chance of being included in whatever majority
formed because they were at a central location at the table. Additionally, they were
prepared to bribe a candidate to give their group more favorable tax policies.
A two-party system never developed among the players on day one because there
was no argument over who was to be in power. Although there were separate and distinct
groups that invested together, the groups did not interfere with the success of one another,
for the goal of the game was to maximize individual profits with no reference to the profits
of others. Due to the low tax rates and frequent tax holidays that stimulated investment, the
average return on investment per round for the entire class was around 51%, which was
the highest out of all three days of play.
Raw data calculated from day one
Emails Sent to Class Prior to Game Day
Nick:
I don't know how many of you remember me, but my name is Nick and I'm in your Game
Theory and Democracy class. As I was trying to prepare a little for our game tomorrow, it
occurred to me that perhaps our class may be able to accomplish something that (as far as I
know) no other classes have accomplished - build class wide wealth that guarantees us all
success in this game. The investment odds in this game are excellent - over any sort of
extended period, a great amount of wealth could be built up for each and every class
member, all while providing a still providing a safety net against bankruptcy. Obviously
similar redistribution plans have failed in real life, but the fact is that in a microcosm as
small as our class, we could easily ensure that we're all successful. When you consider that
our fiscal standing carries over from class to class, it is quite clear that we all do have ample
motivation to maintain financial stability.
In short, I think that rather than all taking a cutthroat approach early in the game, we would
be better served working as a community. Remember, there is no limit to our financial
gains from the treasury. Why not exploit that fact? If you all have any other ideas feel free
to throw them around on this email or in class tomorrow. Otherwise, I'll see you all
tomorrow morning.
Ryan:
Personally, I think that sounds like a solid approach. However, is there some way we can
guarantee that someone won't try to gain power and take advantage of the system? We
would have to elect a president who we could trust and who would be willing to prevent
some kind of power grab. Are we allowed to make some kind of laws concerning investment
and power?
Let me know,
Ryan Meingasner
Nick:
Definitely a valid concern. I think that our best bet would probably be to try to institute
some sort of system that keeps the president in check - maybe by way of a wider
distribution of the treasury. The good news, however, is that majority rule will never really
allow that kind of abuse if all others agree on a set of laws.
Hannah:
I agree that we should work as a single community to try to maximize our wealth. However,
even with unanimous agreement, it would be very difficult to prevent any one person from
placing their own interests over those of the group. We need to come up with a plan for
what should happen if someone begins acting unfairly towards other players. If we don't, I
think the two party system will come back into play.
Cameron:
I am all about trying to maintain a utopian community to maximize wealth. As long as we
have a majority, we can tax all non-compliant individuals who try to take advantage of other
players at 100%. I also suggest we tax profits at around 10% so we can mitigate losses for
those who roll a zero and lose their money. With a 10% tax there should be enough excess
money to give 50% of their investment back to individuals who lose their money with a bad
investment.
Basil:
As the results on the spreadsheet show, the profitable return on investments is
irrefutable. If we really want to have a utopian society in which we all work together to
make as much money as we can, then all we have to do is increase the times (or rolls) that
we invest.
What I mean is that rather than take turns, we all just invest in a certain amount on every
roll of the dice. That increases the number of times we invest, which means that increases
the amount of times we are profiting from the 50% expected rate of return.
Essentially all I am saying is that we are increasing the rate of making the amount we
(theoretically) get 50% on our investments.
Ex:
Rather than Nick invest 30 on his turn, then wait for everyone else spin for his turn once
again, Nick should just invest 30 on each person's turn. Every turn we spin as a Utopian
society just becomes like an individual spin for everyone else. Everyone should just keep
track of how much they are getting.
Ex:
If I put in 5, Tony puts 5, and Nick puts 5, and the dice triples, we all win 45, but each have
our own internal wins of 15.
Sorry if this email is too long, complicated, and maybe not even thought out enough. I am
just putting out an idea!!
Players’ Reports of Day One
Bemenet
Last Tuesday was the first day of the money and politics game in our seminar. Before
starting the game, I knew that I would have to find a seat in the middle; that way, if the class
ended up splitting into two parties, I would be one of the swing votes, and could possibly be
offered a monetary award for joining either party. I read the email that Nick sent out and I
agreed with his idea of having a utopian society, especially since I wanted our entire class to
earn the most money from all previous GTD classes. So when the game started, I sat next to
Gloria, Alex (the boy), Chi Chi, David, and Ben. I actually lost my first investment of 5 chips.
When the next round came, David asked if he could invest some of his chips on my turn, and
I think we doubled it. Once Gloria, Chi Chi, and Alex saw that we made money, they all
decided to invest in each other's turns, too. I offered Ben a chance to pool with us, but he
didn't seem interested. The fact that Nick was committed to keeping a utopian society
definitely helped us since every second or third round was free of taxes. As our group got
richer and richer, the amount of money we invested started to grow and the group to my
left (Hannah, Tony, Basil, Alec, etc.) started to catch on to our strategy, however, they
started later in the game and thus did not make as much as we did. Some of the players on
Jenna's side of the room tried to enter our pool, but we felt that five was enough people and
adding an extra person would make things more complicated. We also liked the fact that we
were the five richest players in the class (not counting Jenna), and we wanted to keep it that
way. I ended day one with around 290 chips (4th richest), and felt good about how our
"company" did that day.
Tony N.
To start the first game, Mr. Dr. Professor Bray gave each player 9 chips except for two
players, Alec and Jenna, who started with 50 chips. These two players were considered the
"wealthy" players and coveted members of investment groups later in the game. Nick was
elected President before the game started, and stayed in power all game.
During the first round, most players were silly and invested on their own, except for
two genius players, Hannah and Tony Nader. Slyly, they shared chips to invest, but came
out unlucky and did not make much after the first round. Other people followed Hannah and
Tony's example and started to team up and invest as a group in order to invest more at a
time and invest more than once a round.
Throughout the game, Nick tried to keep tax policies fair for all and please everyone so
he could stay in power. The tax money was given to players that lost all of their money as a
sort of "bail out". Some of the players noticed Nick was a bit of a push over and could be
manipulated in order to serve their needs.
As investment groups formed, some became very rich, but other not-so-lucky players
lost very often. The middle group was very lucky and continued to double and triple their
investments. When the first day ended, the middle group had about a hundred chips on
average more than any other group.
Alex M.
Initially I had no strategy going into day 1 of GTD Money and Politics game. I figured I would
just make smart bets around the 33-40% mark (i had an idea of how to optimize my bets)
and simply politic as I needed to, so I picked a middle seat. It turns out that a group of 5,
David, Gloria, Chi Chi, Bemenet, and myself, started betting in each others turns equal, large
amounts of chips and became the five richest in the game. I then began to notice our
position in the room and it divided the table into seven people to one side and nine to the
other, with our group of 5 physically separating the two groups of people, neither of which
large enough for a majority, so I discussed with the group of five that we needed to remain
politically neutral as to keep the favorable tax conditions we were experiencing already. For
the goal of day 1, I feel that I was fairly successful in the strategy I employed.
Our physical position at the table was helpful and definitely contributed to disallowing a
majority to form and a breakdown of the utopian society. If someone had presented us with
unfavorable conditions we would have found a majority and retaliated. We really just got
lucky with rolls and made a ton of money making 5 bets a round.
Basil
The first day for many was a game of tests and trials. Our overall goal was to accumulate as
much chips as we can without consequence of having less chips than any of our peers.
Hence, it was of best interest for the president (Nick) to have a favorable policy throughout.
This policy consisted of 20% taxes on everybody with a tax holiday every few turns. Since
there was not much incentive to be ahead of everybody else, this led me to spend a majority
of the game experimenting with a few tactics that I thought would be beneficial.
The first of my tactics was to make sure I invested at least a third of my chips every round. I
derived this because I knew based on Dr. Bray’s book there is a statistically proven 50%
rate of return on investments. However, after gaining a few coins, I convinced myself that
there must be faster ways to gain chips. I did this by offering a deal with Tony and Kushal in
which I would offer them each 10 chips on their turns. If they triple, they give me my 10
back, plus 3 extra. If they doubled, they only give me 2 from their return. If they got nothing,
I got my 10 back; and if they lost it all, I lost my 10.
After a few successful turns with this strategy, Kushal, Tony, and I then came to the
realization that all we were doing was merely increasing the amount of times we invested
chips. In other words, we were increasing the amount of times we gained 50% return from
our investments. Hence, from then on this was our strategy of choice. We concluded that
whenever the goal of the game is to just maximize the amount of chips an individual
receives regardless of what others made, then having a pool of multiple investments per
turn was the best way to make chips.
Isaac
Before day one, my strategy was to align with Brian and Alex to pool our money and thus
invest on multiple turns. In retrospect, we were not nearly aggressive enough with our
investments and waited too long to begin executing our strategy. Ultimately, we had the
right idea. The game rewarded players who partnered with others to place bets on each
others' turns.
Initially, Brian, Alex, and I planned to use our shared chips to insure the treasury on bets
placed by the government in return for a cut of each profit. I quickly realized that people
were unlikely to go along with this idea as it would be clear that we were profiting directly
from treasury funds. That idea was a flop.
My mistake on day one was allowing too many investors to join our pool. We allowed two
wealthy players to join our pool, thinking that with more capital we'd have more potential
for profit. However, because their were large discrepancies among different players' initial
investments, we felt obligated to give each player a number of chips at the end of the game
proportional to their initial investment. Because my initial investment was relatively small, I
did not come off a big winner after day one. The Utopian society offered enormous potential
for amassing sizable profits. Unfortunately, I was a little behind the curve and ended the day
towards the bottom of the class.
Cameron
On Day 1, the utopian society dominated. After an initial turn, it quickly became clear that
whoever pooled their resources would acquire wealth quicker. I formed a group with
Hannah and Tony initially, but we had really unlucky rolls and didn't have great returns on
our investment. At the same time, a new group of five was forming that started making
money very quickly. Eventually, we incorporated Nick, the president, and Alec, one of the
two classmates who started with 50 chips as opposed to 9 to make more money. The utopia
managed to coexist in peace for the entirety of class and although my group didn't finish at
the very top, we did well enough for ourselves to finish in the top half.
David
Going into day one I had a simple strategy in mine, invest my money with others. I was kind
of affiliated with two others before the game started and I emailed them this simple
strategy. Within the first round I invested my money with one of the two that I was affiliated
with. This instantly caught on, and a group of five including myself invested like that for the
whole game. We knew that we could make more money the more often and the more money
we invested. With Nick as president, we had low tax rates, and every three rounds a tax
holiday. We invested a reasonable amount when there was low taxes and a lot more when
there was no taxes. Others who were not in the group started to notice what we were doing
and how much money we were making, and so they started to also use this strategy.
Because we were only trying to get as much money as possible it didn't matter what other
people did, as long as there was a fair tax policy. Also, because of this there wasn't much
strategy other than this simple one that we needed to use. That was really the whole game.
At the end, the five of us were within the top six in the most money.
I had emailed bemenet and Gloria, but it wasn't a strong affiliation until the game actually
started and I invested on Gloria's turn. Then chi chi and Alex saw what I was doing and
joined in
Lauren
Day one was prefaced series of emails which would ultimately shape the gameplay. Nick
George, the mastermind of the situation, proposed a system of a somewhat utopian society,
in which we would all work as a community instead of fighting over wealth from the start.
Personally, I have always defined myself as the more skeptical type, and this proposition did
not escape my critical eye. I automatically assumed that an entire utopian class period
would be unrealistic and impractical. Looking at history--from New Harmony to Nauvoo-utopian communities really never function as planned, in fact they usually backfire, creating
more problems than the society in question had before they began striving for perfection.
So why would our class of eighteen-year-olds be any different? Maybe I underestimated our
cooperative abilities and intelligence, or maybe utopia is much easier when it's just a game.
Either way, it worked pretty darn well.
Personally, I didn't quite thrive under President Nick's system. Though I started with the
same amount of chips as everyone else at the table, I ended the day with the second-to-least
chip count. It was a little demoralizing to start on a level playing field with the rest of the
class, and then end the day in the bottom two, 20th out of 21. But, what I did not quite
expect was the fact that the system to more or less 'bail out' those who went bankrupt
worked pretty well. I personally went bankrupt twice, and both times I was provided with
sufficient funds from the treasury to keep playing.
So although I didn't personally have a particularly fiscally productive day, I was pleasantly
surprised by the class' ability as a whole to maintain a productive utopian system. The
second day was totally different, and made for a very interesting contrast. Overall, we did
really well on day one, and I kind of wish we could go back!
Gloria
I came into Day one having an alliance with Bemenet and David, but not knowing the
limits/scope of the alliance. In the first round, David gave me the remainder of his chips (he
lost around half of his on his turn) to invest on my turn, and soon, Bemenet, Chichi, and Alex
Merriman did the same, and we formed our alliance of five. Because we started early, and
Nick kept the tax policy low or nonexistent, we quickly became rich. Although we were
offered the President position if we formed a majority with one of the other groups, we
declined that because the game was already going really well for us. Taxes were low, we
invested on each other's turns, and we had a small enough group as to where it was easy
enough to divide up the profits.
On the first day, we distributed profits off of every turn. Towards the end, we allowed an
entire round to pass before equally distributing the profits, but always equally distributed
before the next round. This made us trust each other and the alliance, and made us
confident as a group for day 2.
We all invested the same amount, and we just talked. we didn't have any covert form of
communication. Also, we were assuming Nick wouldn't raise taxes, but were kind of playing
it by ear if he did--we thought since we were the richest, we could form an alliance with
another group. And I definitely think the fact that we trusted each other was the most
important part to our strategy.
Hilary
I was pretty clueless when we started the first day of the game, and I really had no plan
coming into the day. I was sitting next to Jenna (one of the original rich kids), and although
we didn’t have any strategy, I wanted to keep her as an ally for the game. I figured out early
on that the group in the center of the table had a plan to become wealthy together. I
watched them become richer and richer, and it was clear that they had a good method for
investing their money. I didn’t establish a group that I could invest my money with until the
second half of class, and unlike the other one, we didn’t have a fabulous system for gaining
money together. Our crew, which consisted of Jenna Poczik, Alex Zrenner, Scott Rubin, Brian
Mazur, and me, wanted to keep the group somewhat small, so we decided collectively to not
include the two people at the end of the table, who didn’t have nearly enough money to
contribute.
We communicated over group text during class, which was somewhat intimidating to those
around us, because it seemed like we were scheming to overthrow Nick or to come up with
some radical plan to change the course of play. In actuality, we were working to create our
own “national bank.” Our plan was essentially to have a central “treasury,” in which we
would invest the money on our respective turns, if we chose to do so. We basically threw in
however much money we wanted and then just took our “earnings” back at the end of each
turn, without any solid methods or calculations. It was probably economically beneficial for
me, but our “strategy” was a bit chaotic and definitely needed to be perfected. I ended the
day in 10th place, so I was in the top 50%! It was a fun class and I wish I had better
recollections of what happened exactly!
Tony Q.
On day 1, the objective was to increase the wealth of the entire class as a whole. The
expected return is always positive so we wanted to encourage betting and also to promote a
utopian society as much as possible. Consequently we established a 20% tax which would
create a back-up system for people who go bankrupt. In addition, the money would be
distributed after a certain amount to prevent the president from stealing it all.
There seemed to be a good acceptable mood among the society which I believe was created
by the email that Nick sent before the game started. People generally agreed with the idea
and people were happy so the status quo was maintained. In addition, most people were of
the opinion that any demonstration of dissent against the current status quo would lead
to high taxes for them due to nobody vote with them.
Quickly as people began to understand the workings of the game, people began to establish
small groups so that each person in the group would invest during the other members'
turns. Since expected return is positive, so the more times you bet, the more money you
should have. There also not much incentive to betray any of the other members since this
strategy is clearly beneficial and any betrayal would lead to everybody not willing to be a
part of a group with that member. So overall, that member would lose money and the group
would lose expected possible money which is against the set objective.
From what I can remember, I think the major strategy was to bet as much as possible. I
would see how the rich people would be getting richer and so copied their method of taking
betting on other people's turns. I didn't try any method to steal or some manipulative way
to earn money due to the fear of possible retaliation. I wasn't the richest and stealing would
just get me taxed at 100%, so less money overall. I mainly just bet some chips with the
people who were sitting closest to me, I don't remember who these were. I wasn't that
successful as I think I ended up around the bottom half of the class. This might have been
because I started pooling late or was just unlucky. For how much to bet, I think I mainly
tried to do an amount close to 30%. Using the method, Professor Bray taught us, the optimal
amount to bet is around 38%.
Alec
The general consensus of the class was to start as a utopian society. I started with 50 chips,
so while the average of the class was 9 chips I was placed in an influential position. I started
investing my money into other people in order to get more chances to increase my chip
amount. When people started to divide into groups, I joined into a group of 4 and we
invested money equally while splitting the profits made. Since the society was working
together to gain as many resources as possible, there was no incentive for me to go against
the majority. Therefore, I decided to simply stay in my group and invest as many times as
possible.
Nick
The night before the first day of the game I sent out an email to the class suggesting we try
to form a sort of utopian society. My argument was based on the logic that we were not
competing against one another, but rather past classes.
Upon arriving to class I was voted president, and I made a point of asking the class what
they thought an appropriate tax rate would be. We came to the conclusion that 20% would
be appropriate, and thus that was the rate for the first couple rounds. I also specifically
made sure to separate my personal chips from the treasury chips at all points during the
game.
Once a significant enough treasury had been built up (so that there was an adequate safety
net in case anyone lost everything), I decided to give the class a tax break. Over the next
couple rounds, the tax rate moved between 0 and 20%. Once the treasury was full enough, I
redistributed the funds equally around the class.
While this was happening, several groups formed and invested their personal funds on each
others' turns in order to bring in a larger return. This was quite successful, and the overall
wealth of the class increased significantly.
At the end of the class, spirits were high and most people did quite well financially.
1. Were you prepared to punish anyone who went against you with 100% taxes?
Yes, I would definitely have levied 100% taxes in a situation where a player stole chips from
other players (i.e. in a group investment scenario). I think such a situation would have
warranted class wide approval for a crippling tax, so I wouldn't have hesitated. Otherwise, I
can't really think of another situation that would have warranted such rash action.
2. Did you threaten this explicitly at any point?
To be honest, I don't remember for sure whether or not I ever made an explicit threat. I
may have said something along the lines of, "If you take their chips I'll raise your taxes to
100%", or something to that effect. Not totally sure though.
3. Did you have any underlying motives that you didn't act on?
For the first round the one goal was to maximize our own profits. I knew that this could
only really be accomplished with some sort of perfect society, so in order to maximize my
own profits I stuck to the plan I instituted. That being said, it was certainly a secondary goal
to control power (and thus control my own fate), but that wasn't really something that
needed to be acted on.
Jenna
During the first day of of the game, I was one of the two people given 50 chips to start. With
my initial lead, I was able to invest a little more than everyone else could to start so I quickly
made some more money. I was generally lucky with my rolls and remained the richest in
the class until I realized that the people towards the middle of the table had created some
kind of alliance that seemed to be profitable. Although it took a little bit of time to set up
and figure out the logistics of collective betting, I then set up an alliance with Hilary, Alex,
Isaac, and Brian. We started investing together and it was profitable. I ended the day in
third place with 289 chips.
Ben
My plan was to not join any groups and see if I could make a profit. Unknowingly, I did the
right thing by betting around 40% of my chips each time. However, I kept getting unlucky
rolls and losing my money. Thus, at the end, I only made a profit of 6 chips over my original
9, and that was only because of the distribution of chips from the treasury. At the end, even
though I didn't make a huge profit, I found the experience interesting, since I got a tiny
glimpse into the world of gambling and began to see how so many people lose money
through it.
Kushal
The game started off with everyone - except 2 - having 8 chips. The 2 wealthy people had 50
chips to start off with. Nick was elected president since he had taken the initiative in
sending out the email the day before. The classroom had collectively agreed on a utopian
society. Unlike day 2, there was no ranking system in place. The only objective was to get as
rich as possible.
This meant that working together was the best strategy to employ. The tax rate was decided
at around 25% and the treasury would be maintained to help out bankrupt players. The
theory behind this was if certain players didn't invest, it would lead to a collective decrease
in the wealth because other players couldn't invest on their turns as well.
As the game continued, various strategies were employed and experimented with. However,
it was eventually confirmed that the best strategy would be to invest on the turns of other
people and look after your own money in the pool. The fastest way to get rich is to invest as
frequently as possible since, on average, there is a positive ROI.
During this entire time, Nick was a very democratic leader - he listened to others and went
with the consensus. There was a group of 6 that figured out the above strategy before the
others and took off with it, leaving them as the richest in the group. Overall, it was a very
successful game and certainly less frustrating than day 2.
I worked with Tony and Basil during day 1. Towards the beginning of the game, we hadn't
really developed the strategy of investing on each others turns so it was mainly individual
during the first half.
However, we finally figured out our strategy and started investing together during the 2nd
half of the game. We were successful, but since we started off later than the center "rich"
group, we were not able to make as much money as they were.
Alex Z.
Isaac and I formed an alliance going into the game, and we wanted to create a central bank
for the treasury and provide insurance for the treasury like the entrepreneur in the book.
We figured we need at least one other person to contribute to being the "bank" so i
recruited Brian since he was in my dorm. We decided once we had a certain number of
chips we would propose the idea of the bank with the support of the insurance. However
the game was moving too fast, and we needed much more than we had thought. Since Hilary
and Jenna were sitting near us, we tried to recruit them. Eventually we just started investing
as a group and eventually abandoned the bank idea. By investing as a group, we were fairly
successful. Everyone's profits grew and it was fairly organized. As i recall, we invested
regardless of tax policies since Nick was president and the society was fairly utopian.
Chi-Chi
Day 1, for me at least, was simply luck. I began by investing my money on my own like
everyone else. I was quite nervous about the game because I never considered myself a very
strategic person. Shortly after the game started, I noticed that the person sitting to my right
(Behemet) was pooling his money with three other individuals and that they were doing
really well. I just asked "hey, can I put some money in on the next turn?" and the company
was born. Luck was on all of our side and we profited immensely. As we started to get
richer, we also got more exclusive and agreed to keep the company to our five. Others tried
to get in with us and we turned them away. There wasn't a lot of drama as Nick keep things
reasonable and fair and we had no reason to try and change the way the system was run. So
we simply continued to invest and profit. We also tried to keep our success secret just in
case we were playing again as we didn't want to be targets for the next game, but that didn't
work. Overall, I made a very lucky and very good decision and just asked to be part of a
team.
We agreed to leave the politics alone as long as conditions were favorable. If Nick had
started to tax us too much we would have simply nominated a candidate who wouldn't tax
us and promise people who voted for our candidates favorable conditions and/or paid them
off. We knew we would never be able to buy Nick/bribe him to give us better conditions. I
think going as a group made us the most successful. We were the first people to really group
up, so I think we became richer simply because we started working together earlier (plus a
bit of luck).
Hannah
Day one consisted mostly of cooperation amongst students. I had an alliance with Tony and
Cameron that came to include Alec and Nick as well. We invested upon each other’s turns,
but we did not invest enough chips on each turn and therefore did not do as well as the
“rich” group. Also, we seemed to have much worse luck than any of the other groups.
Though we did have the president within our alliance, we did not have an advantage
because Nick was in favor of keeping conditions fair for all players. I was pleasantly
surprised by his ability to maintain the utopian society and I feel as though it was successful
in motivating us to invest more of our chips on each turn.