Pokémon, a hand held video game made by Statoshi Tajiri in 1996 is about a character who explores the world training Pokémon and using them to battle against other trainers.  Today there are 6 generations of Pokémon games, 23 different core series games, and over 700 Pokémon, all of which I have loved playing.  I received my first game: Pokémon Blue, back in 1997, the year I also learned to read, after my mom got tired of staying up reading Pokémon to me all night.

Since those fateful days staying up with a flashlight under my covers, Pokémon has aged with me, like a fine wine. As it turns out, Pokémon is more complex than meets the eye, both in player-to-player interactions and in the main game. Now that I am older and have taken Micro Econ, I have recognized the presence of several monopolies in the Pokémon games.

So, lets take a look at the Pokémon economy.  In Pokémon, the player buys all of their goods either from individuals who sell specialty items like Lavaridge cookies or MooMoo milk, or from the Pokémart. Pokémarts are a strong example of a monopoly in the Pokémon games. In order to complete the game, one must buy Pokéballs in order to catch Pokémon, potions to heal them in battle, and other items, which increase the base stats of Pokémon. Since Pokéballs are directly necessary in order to beat the game, and items like potions are extremely helpful, the demand for these products is highly inelastic. Additionally, all of these products must be bought in Pokémarts scattered across the land. All of these Pokémarts maintain the same appearance and prices. We can assume, since all trainers must buy Pokéballs, and those who buy other items have a significant advantage, that the Pokémart monopolies can mark up prices significantly in order to maximize profits. We see this by comparing the products made in Pokémarts to other items available in game.

One interesting phenomenon in the Pokémon games is the relative prices and efficiencies of different healing items. For instance, the store bought item Potion costs 300 Poké-dollars to heal 20 hit points, whereas the Fresh Water item heals 50 hit points for only 200 Poké-dollars. So how does the Pokémart monopoly get away with this huge markup? Well firstly, Fresh Waters can only be bought at vending machines in specific locations in the game, whereas Pokémarts can be found in virtually every city in the game. Another reason is that they aren’t perfect substitutes for higher-level trainers. While Fresh Water offers the best Hit Points to Poké-dollar ratio, one of the main uses of healing items is in the heat of battle. This is where Fresh Water falls short. Fresh Water can only heal 50 hit points maximum, but Hyper Potions which cost 1200 Poké-dollars can heal for 200 hit points, albeit for a lower hit point-Poké-dollar ratio. However, for higher-level Pokémon, 50 hit points is an insignificant amount, especially when expecting a big attack.

Another way I have applied the concept of monopoly to the Pokémon games is in my player-to-player interactions. Sparing you all the nitty gritty details about Pokémon breeding let me tell you that it is very difficult to train Pokémon adequate for competitive battling and to breed just one would take days of work. I wanted to build a team of 6 Pokémon, but I knew I didn’t have enough time. This all happened towards the end of winter term and I realized that the opportunity cost of breeding Pokémon all day was a significant drop in my GPA. So, I came up with a strategy to create a monopoly on one type of competitively viable Pokémon, then to trade it for different Pokémon of the same worth. See, while it may take days to breed the first competitive Pokémon, the second and the third take only minutes afterwards. In a simplistic way, this is like the concept of an economy of scale, wherein the first unit is expensive to produce, while the next are less so, making this the perfect set up for a natural monopoly. In order to do this right, I needed to pick a Pokémon that is strong despite fluctuations in the metagame (or current dominant strategy). This meant that my product had inelastic demand, meaning I could demand stronger Pokémon in return for my trade. I also decided to pick a scarce Pokémon and give it a scarce move through a series of time consuming steps. This created a significant barrier for entry for others looking to breed similar Pokémon, giving me stronger monopoly power. All told, I was able to make a number of beneficial trades with others who had similar monopolies on different Pokémon. This illustrates the fact that by specializing and trading, each Pokémon master could save time but still make a powerful team in order to be the very best.

All told, Pokémon actually illustrates the concepts of monopoly fairly well, both in game and in player-to-player interactions. For those interested in the Pokémon I used to make a monopoly, it was jolly Lucario with the egg move bullet punch. Unfortunately, Lucario has since been banned to the über tier and so my monopoly power is mostly gone.