In this post we’ll unpack all you need to know about Zero-Sum Games and Positive-Sum Games, defining exactly what they are, distinguishing the differences, the key to success and more.
What Are Zero-Sum Games?
A Zero-Sum Game refers to an interaction where one party’s gain is obtained at the direct expense of others.
More simply, Zero-Sum games are win-lose. An example of a Zero-Sum game is status since only one person can occupy a position within a hierarchy at any given time.
What Are Positive-Sum Games?
A Positive-Sum game refers to an interaction where both party’s in an interaction gain.
More simply, Positive-Sum games are win-win. An example of a Positive-Sum game is trade since both parties exchange products or services in a way that benefits them both.
The Difference Between Zero-Sum Games & Positive-Sum Games
Zero-Sum games create asymmetric gains. Positive-Sum games create mutual gains.
Zero-Sum games foster competition. Positive-Sum games foster cooperation.
Zero-Sum games maintain value. Positive-Sum games create value.
Zero-Sum Games Versus Positive-Sum Games Table Summary
| Zero-Sum Games | Positive-Sum Games |
|---|---|
| Win-Win | Win-Lose |
| Asymmetric Gains | Mutual Gains |
| Foster Competition | Foster Cooperation |
| Maintain Value | Create Value |
Life Is Both
From an economic perspective, life is both a Zero-Sum Game and a Positive-Sum Game.
Life is a Zero-Sum game because people are competing for the finite amount of recourses available at any particular moment in time.
Life is a Positive-Sum game because the finite amount of recourses will, through innovation, ideally be used to create new recourses, thus expanding the net-total amount of recourses available.
The Key To Success
The key to success in both personal and professional relationships is to maximise Positive-Sum Games. In other words, we must pursue the goal of creating win-win situations.
Summary (TL;DR)
A Zero-Sum Game is where one person in an interaction loses at the expense of others. A Positive-Sum Game is where both party’s in an interaction gain.
From an economic perspective, life is both a Zero-Sum Game and a Positive-Sum Game since resources are finite but innovation creates new recourses which expands the net-total pool of recourses.
The key to success in both personal and professional relationships is to maximise Positive-Sum Games.
