In page navigation

Zero-sum game

Updated: Aug 20, 2021

A type of game, analysed extensively in the theory of games, in which the gains and losses of the ‘players’ sum to zero for every possible choice of strategies. For example, suppose there are only two players, firrn A and firm B, which between them control 100 per cent of the market for a particular product. Whatever increase in market share firm A might gain will be exactly equal to the loss suffered by firm B. Thus the game is zero-sum. The importance of this type of game is that the players are in pure conflict. There is no scope for joint action to increase the total sum of pay-offs.

Reference: The Penguin Business Dictionary, 3rd edt.

Sources & references
Risk disclaimer

Invezz is a place where people can find reliable, unbiased information about finance, trading, and investing – but we do not offer financial advice and users should always carry out their own research. The assets covered on this website, including stocks, cryptocurrencies, and commodities can be highly volatile and new investors often lose money. Success in the financial markets is not guaranteed, and users should never invest more than they can afford to lose. You should consider your own personal circumstances and take the time to explore all your options before making any investment. Read our risk disclaimer >

James Knight
Editor of Education
James is a lead content editor for Invezz. He's an avid trader and golfer, who spends an inordinate amount of time watching Leicester City and the… read more.