What is a negative-sum game?

What is a negative-sum game?

The term negative-sum game describes situations in which the total of gains and losses is less than zero, and the only way for one party to maintain the status quo is to take something from another party.

What is negative-sum outcome?

A negative-sum game is a situation where the gains and losses of all will add up to less than zero, agents involved in such a dynamic will lose in comparison to what they currently have. This type of situation often creates major competition or conflict.

What is the difference between a zero-sum game and a positive sum game?

positive-sum game, in game theory, a term that refers to situations in which the total of gains and losses is greater than zero. The term zero-sum game refers to situations in which the total of wins and losses adds up to zero, and thus one party benefits at the direct expense of another.

Can the value of the game be negative?

A negative-sum game is a situation that destroys value as opposed to creating it. This doesn’t mean that all participants lose, it just means that total losses exceed total winnings.

Why is international trade a positive sum game?

A good example of this are the mutually beneficial gains from trade in goods and services between nations. If businesses or (more generally) countries can find a terms of trade in which both parties benefit then specialisation and trade can lead to an overall improvement in the economic welfare of both countries.

Why is the economy not a zero-sum game?

Economics is not a zero sum game due to its popular-definition, which refers to only the human activities. The system under consideration is not closed! Natural resources do flow into the system. It is this non-human-system that loses.

Is wealth a positive sum game?

Wealth creates more resources for everyone, not only the big “winners.” The more wealth that’s created, the more opportunity and resources are available to society as a whole. It’s a positive sum game.

What is positive sum game in international relations?

A positive sum game refers to the outcome of a decision or a policy or a negotiation involving at least one agent. And in this outcome a positive sum game occurs when no one wins at someone else’s expense – indeed the sum of positives and negatives (wins and losses) is positive.

What is the zero-sum property of conflict?

The zero-sum property (if one gains, another loses) means that any result of a zero-sum situation is Pareto optimal. Generally, any game where all strategies are Pareto optimal is called a conflict game.

What is a zero-sum game in economics?

In game theory and economic theory, a zero-sum game is a mathematical representation of a situation in which each participant’s gain or loss of utility is exactly balanced by the losses or gains of the utility of the other participants. If the total gains of the participants are added up and the total losses are subtracted, they will sum to zero.

Are negative-sum disputes always lose-lose?

This type of situation often sparks serious competition. However, negative-sum disputes are not always lose-lose because if the parties know the pie is shrinking, it is possible their expectations will be low. A perfect example of a negative-sum dispute is the allocation of budget cuts within an organization.

What happens when the wins and losses add up to zero?

The wins and losses add up to zero. These situations typically arise in distributive bargaining cases where a “fixed pie” must be divided between the parties. For example, if two departments are splitting up a fixed amount of money, the more one gets, the less available to the other.