ORIE Monopoly Team Takes the "Where's the BOOM" Award

For the past 13 years, an annual "Bits On Our Minds" exhibition has showcased student digital technology research projects.   On March 3, 2010, students from a variety of disciplines displayed 40 projects on a wide range of topics, ranging from "Emotion Classification and Data Mining on Social Networking Sites" to "Spinal Compression Fracture Detection" to "Spoken Language Detection."  ORIE senior Thomas Byuen and M. Eng. student Germán Gutiérrez Gallardo presented a poster describing the work of the "Monopoly Strategy Research Group (MonStR)."

Faculty from the Computer Science Department awarded one of the top prizes in the exhibition, "Where's the BOOM (Brains On Our Machines)," to the work of Gutiérrez and Byuen, which included contributions from other students who have graduated and was advised by Professors Eric Friedman and Shane Henderson.  Criteria for the award include "novelty, elegance, simplicity, and appropriateness of algorithms, and overall software engineering."  Byuen said "we were pleasantly surprised when we heard that we had won the award."

MonStR's poster presentation dealt with estimating the probability that a game of Monopoly never ends.  Earlier work by the group estimated that the probability of this happening is 12 percent,  assuming there are two players, each using a particular simple strategy.  Since then, Byuen and Gutiérrez have explored other strategies, including one that reduces the probability of the game going on forever to 2 percent.  

This current best strategy, called "SureFire,"  entails maintaining and updating a 'subjective' value for each property on the board.  Now the team is working on improving this strategy by tinkering with parameters that dictate how players value properties, when they buy, sell or mortgage, etc., optimizing them to increase and eventually maximize the probability of winning with strong confidence.  

As a related project, the group is exploring whether the game of Monopoly can be 'tweaked' to illustrate how financial crises might arise, under some simple and transparent mechanisms,  from an economic situation that has changed since the game was invented.  The revised game assigns some of the players the role of bankers, with the ability to make loans to other players and introduces some financial measures for these players, such as the 'leverage ratio' (equity divided by average total consolidated assets).  The group will "study the impact of the leverage ratio on banks, the likelihood of them going broke and, lastly, the benefit to players in bailing out the banks."  

As Byuen and Gutiérrez observed in a published paper about their work in general, "the reason this is important is not just that we are enthusiasts and see it that way, but also because Monopoly is a microcosm of many important systems in real life, where sequential decisions under uncertainty are made in the face of competition from other entities."

Gutiérrez, who is from Guadalajara, Mexico, will graduate with a Master of Engineering degree from ORIE in May 2010 and join Oliver Wyman, the management consulting firm in September.  Byuen, from Woodside NY, will intern at Ernst and Young in the summer of 2010 after which he will undertake a Master of Engineering program in ORIE, concentrating in Financial Engineering.