Zero-sum game

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. Thus, cutting a cake,
where taking a larger piece reduces the
amount of cake available for others as
much as it increases the amount available
for that taker, is a zero-sum game if all
participants value each unit of cake
equally (see marginal utility).

In contrast, non-zero-sum describes a

situation in which the interacting parties'
aggregate gains and losses can be less
than or more than zero. A zero-sum game
is also called a strictly competitive game
while non-zero-sum games can be either
competitive or non-competitive. Zero-sum
games are most often solved with the
minimax theorem which is closely related
to linear programming duality,[1] or with
Nash equilibrium.

Humans have a cognitive bias towards

seeing situations as zero-sum, known as
zero-sum bias.

Definition
 Choice 1 Choice 2

Choice 1 −A, A B, −B
Choice 2 C, −C −D, D
Generic zero-sum game

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.[2]
Zero-sum games are a specific example of
constant sum games where the sum of
each outcome is always zero. Such games
are distributive, not integrative; the pie
cannot be enlarged by good negotiation.

Situations where participants can all gain

or suffer together are referred to as non-
zero-sum. Thus, a country with an excess
of bananas trading with another country
for their excess of apples, where both
benefit from the transaction, is in a non-
zero-sum situation. Other non-zero-sum
games are games in which the sum of
gains and losses by the players are
sometimes more or less than what they
began with.

The idea of Pareto optimal payoff in a

zero-sum game gives rise to a generalized
relative selfish rationality standard, the
punishing-the-opponent standard, where
both players always seek to minimize the
opponent's payoff at a favorable cost to
himself rather to prefer more than less.
The punishing-the-opponent standard can
be used in both zero-sum games (e.g.
warfare game, chess) and non-zero-sum
games (e.g. pooling selection games).[3]

Solution
For two-player finite zero-sum games, the
different game theoretic solution concepts
of Nash equilibrium, minimax, and
maximin all give the same solution. If the
players are allowed to play a mixed
strategy, the game always has an
equilibrium.
Example …

A zero-sum game
Blue
Red A B C
−30 10 −20
1 30 −10 20
2 10 −20 20
−10 20 −20

A game's payoff matrix is a convenient

representation. Consider for example the
two-player zero-sum game pictured at
right or above.

The order of play proceeds as follows: The

first player (red) chooses in secret one of
the two actions 1 or 2; the second player
(blue), unaware of the first player's choice,
chooses in secret one of the three actions
A, B or C. Then, the choices are revealed
and each player's points total is affected
according to the payoff for those choices.

Example: Red chooses action 2 and Blue

chooses action B. When the payoff is
allocated, Red gains 20 points and Blue
loses 20 points.

In this example game, both players know

the payoff matrix and attempt to maximize
the number of their points. Red could
reason as follows: "With action 2, I could
lose up to 20 points and can win only 20,
and with action 1 I can lose only 10 but
can win up to 30, so action 1 looks a lot
better." With similar reasoning, Blue would
choose action C. If both players take these
actions, Red will win 20 points. If Blue
anticipates Red's reasoning and choice of
action 1, Blue may choose action B, so as
to win 10 points. If Red, in turn, anticipates
this trick and goes for action 2, this wins
Red 20 points.

Émile Borel and John von Neumann had

the fundamental insight that probability
provides a way out of this conundrum.
Instead of deciding on a definite action to
take, the two players assign probabilities
to their respective actions, and then use a
random device which, according to these
probabilities, chooses an action for them.
Each player computes the probabilities so
as to minimize the maximum expected
point-loss independent of the opponent's
strategy. This leads to a linear
programming problem with the optimal
strategies for each player. This minimax
method can compute probably optimal
strategies for all two-player zero-sum
games.

For the example given above, it turns out

that Red should choose action 1 with
probability 47 and action 2 with probability
3 , and Blue should assign the probabilities
7
0, 47 , and 37 to the three actions A, B, and C.
Red will then win 20
7 points on average per
game.

Solving …

The Nash equilibrium for a two-player,

zero-sum game can be found by solving a
linear programming problem. Suppose a
zero-sum game has a payoff matrix M
where element Mi,j is the payoff obtained
when the minimizing player chooses pure
strategy i and the maximizing player
chooses pure strategy j (i.e. the player
trying to minimize the payoff chooses the
row and the player trying to maximize the
payoff chooses the column). Assume
every element of M is positive. The game
will have at least one Nash equilibrium.
The Nash equilibrium can be found
(Raghavan 1994, p. 740) by solving the
following linear program to find a vector u:

Minimize:
 Subject to the constraints:
u≥0
M u ≥ 1.

The first constraint says each element of

the u vector must be nonnegative, and the
second constraint says each element of
the M u vector must be at least 1. For the
resulting u vector, the inverse of the sum
of its elements is the value of the game.
Multiplying u by that value gives a
probability vector, giving the probability
that the maximizing player will choose
each of the possible pure strategies.

If the game matrix does not have all

positive elements, simply add a constant
to every element that is large enough to
make them all positive. That will increase
the value of the game by that constant,
and will have no effect on the equilibrium
mixed strategies for the equilibrium.

The equilibrium mixed strategy for the

minimizing player can be found by solving
the dual of the given linear program. Or, it
can be found by using the above
procedure to solve a modified payoff
matrix which is the transpose and
negation of M (adding a constant so it's
positive), then solving the resulting game.

If all the solutions to the linear program

are found, they will constitute all the Nash
equilibria for the game. Conversely, any
linear program can be converted into a
two-player, zero-sum game by using a
change of variables that puts it in the form
of the above equations. So such games
are equivalent to linear programs, in
general.

Universal solution …

If avoiding a zero-sum game is an action

choice with some probability for players,
avoiding is always an equilibrium strategy
for at least one player at a zero-sum game.
For any two players zero-sum game where
a zero-zero draw is impossible or non-
credible after the play is started, such as
poker, there is no Nash equilibrium
strategy other than avoiding the play. Even
if there is a credible zero-zero draw after a
zero-sum game is started, it is not better
than the avoiding strategy. In this sense,
it's interesting to find reward-as-you-go in
optimal choice computation shall prevail
over all two players zero-sum games with
regard to starting the game or not.[4]

Non-zero-sum
Psychology …

"If I Win - You Win. I will get what I need, if I

take care of your needs first." - Izaya Kross

The most common or simple example

from the subfield of social psychology is
the concept of "social traps". In some
cases pursuing individual personal interest
can enhance the collective well-being of
the group, but in other situations all parties
pursuing personal interest results in
mutually destructive behavior.

Complexity …

It has been theorized by Robert Wright in

his book Nonzero: The Logic of Human
Destiny, that society becomes increasingly
non-zero-sum as it becomes more
complex, specialized, and interdependent.
Movies …

See the plot of Arrival

Extensions
In 1944, John von Neumann and Oskar
Morgenstern proved that any non-zero-
sum game for n players is equivalent to a
zero-sum game with n + 1 players; the
(n + 1)th player representing the global
profit or loss.[5]
Misunderstandings
Zero-sum games and particularly their
solutions are commonly misunderstood by
critics of game theory, usually with respect
to the independence and rationality of the
players, as well as to the interpretation of
utility functions. Furthermore, the word
"game" does not imply the model is valid
only for recreational games.[1]

Politics is sometimes called zero

sum.[6][7][8]
Zero-sum thinking
In psychology, zero-sum thinking refers to
the perception that a situation is like a
zero-sum game, where one person's gain
is another's loss.

See also
Bimatrix game
Comparative advantage
Dutch disease
Gains from trade
 Lump of labour fallacy
Positive-sum game

References
1. Ken Binmore (2007). Playing for real: a
text on game theory . Oxford
University Press US. ISBN 978-0-19-
530057-4., chapters 1 & 7
2. Bowles, Samuel (2004).
Microeconomics: Behavior,
Institutions, and Evolution. Princeton
 University Press. pp. 33–36. ISBN 0-
691-09163-3.
3. Wenliang Wang (2015). Pooling Game
Theory and Public Pension Plan.
ISBN 978-1507658246. Chapter 1 and
Chapter 4.
4. Wenliang Wang (2015). Pooling Game
Theory and Public Pension Plan.
ISBN 978-1507658246. Chapter 4.
5. Theory of Games and Economic
Behavior . Princeton University Press
(1953). June 25, 2005.
 ISBN 9780691130613. Retrieved
2018-02-25.
. Rubin, Jennifer (2013-10-04). "The flaw
in zero sum politics" . The Washington
Post. Retrieved 2017-03-08.
7. "Lexington: Zero-sum politics" . The
Economist. 2014-02-08. Retrieved
2017-03-08.
. "Zero-sum game | Define Zero-sum
game at" . Dictionary.com. Retrieved
2017-03-08.
Further reading
Misstating the Concept of Zero-Sum
Games within the Context of Professional
Sports Trading Strategies, series Pardon
the Interruption (2010-09-23) ESPN,
created by Tony Kornheiser and Michael
Wilbon, performance by Bill Simmons
Handbook of Game Theory – volume 2,
chapter Zero-sum two-person games,
(1994) Elsevier Amsterdam, by
Raghavan, T. E. S., Edited by Aumann
 and Hart, pp. 735–759, ISBN 0-444-
89427-6
Power: Its Forms, Bases and Uses (1997)
Transaction Publishers, by Dennis
Wrong

External links
Play zero-sum games online by Elmer
G. Wiens.
Game Theory & its Applications –
comprehensive text on psychology and
 game theory. (Contents and Preface to
Second Edition.)
A playable zero-sum game and its
mixed strategy Nash equilibrium.

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