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zero-sum game

Contributor(s): Ivy Wigmore

A zero-sum game is a situation in which the potential gain for all players combined remains constant. No augmentation or loss can occur and the gain is distributed between the competitors such that a win for one player is a loss for the other(s). The zero-sum concept originated in game theory as one type of constant-sum game.

If two people are competing for $100, for example, at the end of a zero-sum game one player might have $100 and the other nothing, each might have $50, or the money might be split in any other amounts. In any case, though, the total amount split between the players will be no more or less than $100.

Zero-sum game is often used to describe non-game situations and areas of endeavor. The conventional approach to business, for example, is to consider competition a zero-sum game, in that any advantage gained by a competitor is a loss for one's own company and, as such, a company might actively try to impede a competitor's success. Monopolies, price wars, format wars, a lack of compatibility and interoperability, and risks to sustainability are among the results of zero-sum competition. 

Harvard and Yale business professors, Adam M. Brandenburger and Barry J. Nalebuff developed the concept of co-opetition, a type of non-zero sum game in which competitors can create value through cooperation. Coopetition games are mathematical models that are used to examine how cooperative efforts among competitors can increase the benefits to all players and grow the market. 

This was last updated in December 2017

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