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Zero-sum game

Zero-sum game

A zero-sum game is a game or situation where the gains by winners are offset by losses to losers. Zero-sum games are sometimes used to describe market situations in which increased sales by one firm come at the expense of other firms. The total sales remain the same, only each firm�s share of the total changes. If, in a market, there are only a fixed number of potential buyers, increased sales by one competitor result in lost sales by other competitors. Zero-sum games are one form of GAME THEORY, models used to describe results of market strategies depending on the strategies other participants in the market employ. Well-known MIT economist Lester Thurow popularized the term zero-sum game in his 1981 book Zero-sum Society: Distribution and Possibilities for Economic Change. Written during a period of economic stagnation, Thurow suggested MACROECONOMICS comprised a zero-sum game, and as such, well-off members of society must bear the brunt of taxation and other government-sponsored economic actions for the benefit of all members of the society. Recently the term was used to describe growth of the INTERNET, one writer suggesting that Internet growth represents a shift of RESOURCES rather than an expansion of resources and economic output. Zero-sum game is also used to describe the conflict between work and personal life, with additional time and resources being given to one outcome at the expense of the other. Technology companies created the term zero-drag to describe employees who did not have spouses or dependents and therefore had nothing to prevent them from devoting more time to the company. It is often argued that COMPETITION in consumer goods markets results in a win-win situation in which both buyers and sellers seek out the most return for their limited resources and, in the process, create economic efficiency. Market exchanges could be viewed as a zero-sum game, whereby the benefits to either buyer or seller come at the expense of the other. Financial markets can exemplify the zero-sum game, since for every buyer there is a seller. In early 2001 the Wall Street Journal described �dot-com� insiders who sold their shares before the collapse of the technology market. Some insiders sold their shares for more than the current market value of the companies for which they worked.
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