Sociology Index

Zero Sum Game

In a zero-sum game no wealth is created or destroyed. In a two-player zero-sum game, whatever one player wins, the other loses. Zero sum game is a political situation in which whatever is gained by one side is lost by the other so that the net change is always zero. The theory of zero-sum games is different from that of non-zero-sum games because an solution can always be found. If the only way for you to gain a particular sum is to deprive someone else an equivalent sum, you're in a zero-sum game.

Zero-sum thinking was an evolutionary adaptation to a time when we lived in hunter-gatherer society, says neuroscientist Dan Meegan. Resources such as food and mates were finite, so more for one person meant less for another. For some people, free trade really is a zero-sum game, according to Meegan. Even if the nation benefits, individual people may not.

Is War a Zero-Sum Game? Evidence from the U.S. Civil War
Marc D. Weidenmier, Claremont Colleges Working Papers.
Abstract: A new daily data set of Confederate cotton bonds trading in Liverpool is analyzed in conjunction with Union Greenback prices to asses the impact of war news on Civil War asset prices. The empirical evidence analysis indicates the presence of a cointegrating relationship between Union Greenback prices and cotton bond prices after controlling for innovations in the cotton and bond markets.

The Winners and Losers of the Zero-Sum Game: The Origins of Trading Profits, Price Efficiency and Market Liquidity - Lawrence Harris, USC Working Paper, May 1993. 
Abstract: Trading is a zero-sum game when measured relative to underlying fundamental values. No trader can profit without another trader losing. People trade because they obtain external benefits from trading. These benefits include expected returns from holding securities, risk reduction from holding correlated assets and gambling entertainment.