Zero Sum Game

A game theory term that refers to situations in which one party's gain is contingent upon a second party's loss. For example, if there is a situation in which one person receiving 1 million dollars means another person losing 1 million dollars, the wins and losses add up to zero. Another example is an employment situation in which one person's receiving a job means a second person is unemployed, or in a budgeting situation in which one department's funding comes at the expense of another department's. Zero sum situations typically arise in the context of distributive bargaining, where there is a set amount to be divided.

In contrast to the zero sum game are the positive sum game and the negative sum game. The term positive sum game refers to situations in which the total of the wins and losses adds up to more than zero, even if one side may still get more than another. The term negative sum game refers to situations in which gains and losses taken together add up to less than zero. In such a situation, the only way for one party to maintain its current position is to take something from another party. It is in the context of negative sum games that the most serious competition tends to occur.