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DEFINITION of Zero-sum

Zero-sum describes a situation in which a participant's gain (or loss) is exactly balanced by the losses (or gains) of the other participant(s). It is so named because when you add up the total gains of the participants and subtract the total losses then they will sum to zero. Cutting a cake is zero-sum because taking a larger piece for yourself reduces the amount of cake available for others. Situations where participants can all gain or suffer together, such as a country with an excess of bananas trading with an other country for their excess of apples where both benefit from the transaction, are referred to as non-zero-sum.

The concept was first developed in game theory and consequently zero-sum situations are often called zero-sum games though this does not imply that the concept, or game theory itself, applies only to what are commonly referred to as games. To treat a non-zero-sum situation as a zero-sum situation, or to believe that all situations are zero-sum situations, is called the zero-sum fallacy.

Zero-sum game

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