Economics Game Theory Questions Medium
In game theory, zero-sum games refer to situations where the total gains and losses of all participants sum up to zero. In other words, the benefits obtained by one player are directly offset by the losses incurred by the other players. In a zero-sum game, the total utility or payoff remains constant throughout the game.
This concept is based on the assumption that the resources or values being contested are fixed and cannot be increased or decreased. Therefore, any gain made by one player must come at the expense of another player. Zero-sum games are often characterized by competitive interactions, where the success of one player is directly linked to the failure of others.
An example of a zero-sum game is a poker game, where the total amount of money in the pot remains constant. If one player wins, the others lose an equal amount, resulting in a net sum of zero. Similarly, in sports competitions, such as tennis or soccer, where there is a clear winner and loser, the total points or goals scored by both teams sum up to zero.
It is important to note that not all games fall under the category of zero-sum games. In non-zero-sum games, the total gains and losses can be positive or negative, and cooperation among players can lead to mutual benefits. However, zero-sum games are a fundamental concept in game theory, providing a simplified framework to analyze competitive situations and strategic decision-making.