Zero-sum game

Zero-sum game: one player's gain equals another's loss

A zero-sum game is a situation where the total gains and losses among participants sum to zero. This means that any advantage gained by one player results in an equivalent loss for another player. Zero-sum games are common in competitive scenarios like poker, chess, sports, and financial instruments like futures contracts and options.

Example

In poker, if one player wins a hand, the total amount of money won by that player is equal to the total amount lost by the other players combined.

Remember this

Understanding zero-sum games is crucial for analyzing competitive situations where resources are limited and one player's gain directly impacts another's loss.

Text adapted from Wikipedia, licensed under CC BY-SA 4.0.

Related concepts

the minimax theorem says: in zero-sum games, there's a saddle point strategy

Minimax theorem guarantees a saddle point strategy in zero-sum games

Nash equilibrium

Nash equilibrium: no unilateral gain

a dominant strategy is: optimal regardless of what other players do

A dominant strategy maximizes payoff irrespective of opponents' actions

Lebesgue measure

Lebesgue measure assigns zero to countable sets

Entropy (information theory)

Entropy of a fair coin is 1 bit

Prisoner's dilemma

Prisoner's dilemma illustrates how individual rationality can lead to collectively worse outcomes

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