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Zero-sum game. Zero-sum game is a mathematical representation in game theory and economic theory of a situation that involves two competing entities, where the result is an advantage for one side and an equivalent loss for the other. [1] In other words, player one's gain is equivalent to player two's loss, with the result that the net ...
Examples of Zero-sum Games. Chess: In a chess match, when one player captures an opponent’s piece, the other player loses that piece. Hence, there is a clear winner and a loser by the end of the game, demonstrating the win-lose situation of zero-sum games. Poker: At a poker table, the amount of money won by the winning players is equivalent ...
- What Is A Zero-Sum game?
- Understanding Zero-Sum Games
- Zero Sum vs. Positive Sum Games
- Zero-Sum Games and Game Theory
- Example of A Zero Sum Game
- How Zero Sum Games Apply to Finance
- The Bottom Line
A zero-sum game is any interaction in which one person's gain results in an equivalent loss by the other participant. No net gain is achieved. The concept of a zero-sum game is prominent in game theory. Chess is an example of a zero-sum game, in which one person wins at the expense of another. Some transactions in the financial market are zero-sum ...
Zero-sum games are found in many contexts. Poker is a zero-sum game since the sum of the amounts won by some players equals the combined losses of other players. The pot does not grow, it is simply redistributed. Games like chess and tennis, where there is one winner and one loser, are also zero-sum games. Derivatives trades are often cited as zero...
Zero-sum games are the opposite of win-win situations, such as a trade agreement that significantly increases trade between two nations. There also can be lose-lose situations, such as a breakdown in a diplomatic negotiation that ends with no positive outcome for either party. In real life, things are not always so obvious, and gains and losses can...
Game theory is a complex theoretical study in economics. The 1944 groundbreaking work “Theory of Games and Economic Behavior,” written by Hungarian-born American mathematician John von Neumann and co-written by Oskar Morgenstern, is the foundational text. Game theory is the study of the decision-making process between two or more intelligent and ra...
The game of matching penniesis often cited as an example of a zero-sum game, according to game theory. The game involves two players, A and B, simultaneously placing a penny on the table. The payoff depends on whether the pennies match or not. If both pennies are heads or tails, Player A wins and keeps Player B’s penny. If they do not match, Player...
In the stock market, trading is often thought of as a zero-sum game. However, because trades are made based on future expectations and traders have different risk preferences, a trade can be mutually beneficial. Investing long-term is considered a positive-sum situation because capital flows facilitate production and create jobs that then provide s...
In a zero-sum game, or any zero-game interaction, there are winners and losers but there is no net gain. Luckily, most interactions in life are non-zero-sum games. Some of the participants can gain while others lose, but it is not a winner-take-all outcome. And, in the end, the amount gained can be greater than the amount risked.
- Will Kenton
- 1 min
May 18, 2021 · The meaning of ZERO-SUM GAME is a situation in which one person or group can win something only by causing another person or group to lose it. How to use zero-sum game in a sentence.
May 2, 2024 · A zero-sum game is a mathematical concept meaning that the sum of gains and losses for both parties zero out or negate each other. The phrase is based on classical game theory, where one person ...
- Jeremy Bowman
Aug 21, 2024 · Zero-Sum Game Meaning. A zero-sum game refers to a competitive situation wherein the profit of one equals the loss of another and vice-versa, thereby nullifying the net change in wealth for participants involved. The number of participants can be anything but one. It is a type of game theory and often applies in economic and political situations.
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1 other. contributed. A zero-sum game is a game in which it is impossible for any player to help themselves without hurting another player. The name comes from the fact that in such a situation, the gains and losses of all the players sum to zero. For example, if players A and B are playing a zero-sum game, and player A chooses a strategy that ...
