What is a zero-sum game?

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What is a zero-sum game?

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Five people bring $20 each to the poker table. No matter who wins and who loses, $100 enters the table and $100 goes home with the winner(s). Value at the end of the night minus value at the beginning of the night equals zero, a zero sum game. If one person wins it’s because another person loses.

Now imagine three people, one with bread, one with peanut butter, one with jelly. Each is unhappy with their lunch prospects. They decide to make three peanut butter and jelly sandwiches for lunch. Even if the peanut butter cost more than the jelly, all three of them have benefitted from the arrangement. This is *not* a zero sum game.

All commerce, all the way back to prehistoric barter networks, is based on the idea that you can find an arrangement where ALL parties leave the table better off than how they started.

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