Zero-Sum Games

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Zero-sum game. We use a rock-paper-scissors game to explain a zero-sum game. The game is played between two players, in which the players simultaneously show a rock, paper or scissors, using hand gestures. The rule is: rock breaks scissors, scissors cut paper and paper covers rock. The winner gets one point, and the loser loses 1. If both show the same gesture, they get nothing. Let’s write down the payoff matrix (refer to game theory).

Winnie
RockPaperScissors
RockL = 0, W = 0L = -1, W = 1L = 1, W = -1
LucyPaperL = 1, W = -1L = 0, W = 0 L = -1, W = 1
Scissors L = -1, W = 1 L = 1, W = -1 L = 0, W = 0

So, Winnie’s loss can only come from Lucy’s win or vice versa. If they both show the same hand, the game offers no points. In other words, if you sum each of the cells in the table, you get zero. It is a zero-sum game.

Several games follow this pattern – grand slam tennis matches, football (soccer) games in the knockout stages, NBA, to name a few. Irrespective of how much or how little zero-sum games represent our real life, the notion is hard-wired in the brain thanks to popular culture (the good at the expense of the bad) or high profile presidential elections (Republicans’ loss is Democrats gain).

Sometimes, playing for a tie in the league phase of a football tournament can be a strategy for a team (or both teams) to advance to a playoff / knockout round. Similarly, coalition governments are real possibilities in several countries. These are all examples of win-win situations.