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Zero Sum and Positive Sum Game
Apr 04, 2021
3 minutes read

Some patterns would help you better handle your time and investments. One of those discerning patterns is looking for the difference between a Zero-Sum and a Positive-Sum game.

  • Zero-sum game entails that there would only be one winner. Sports like Cricket and Badminton are zero-sum games. At any place when you are competing with someone else and if you win - they lose, and they win - you lose: it is a zero-sum game. (Is dating a zero-sum game?)
    • Politics is a zero-sum game. (Governance is not a zero-sum game.)
    • In zero-sum game, you have to be the monopolistic leader. (Why are there predatory pricing, like in WeWork and Amazon?)
  • Positive sum game can have multiple winners.
    • When you had a hard time commuting to the office, Uber appeared with an easy-to-use service. Now you can quickly go to the office, the driver gets paid, and Uber gets a cut. All three of you are getting value from what Uber did. In this game, all three of you are winners.
      • Building something is a positive-sum game. (Is Instagram a positive-sum game?)
    • Building a network is a positive-sum game. If you know five people, and your flatmate knows five people. You bring all of them together for a party, and now you both know ten people.

Mostly I avoid zero-sum games before they occur, but knowing something doesn't mean that you are immune from it. Myriad games are both zero-sum in some respect and positive-sum in some respect. Focus more on the positive-sum part there. Like, there can only be a limited number of winners in a hackathon. But this shouldn't stop you from building stuff.

Check out my new positive sum endeavour:

  • Predatory pricing from

    Capitalism works because companies that thrive take a bunch of inputs and create a product that is more valuable than the sum of its parts. That creates additional value, and in such a model companies have to compete by making better goods and services. Someone like Neumann, and Son’s entire model with his Vision Fund, is to take inputs, combine them into products worth less than their cost, and plug up the deficit through the capital markets in hopes of acquiring market power later or of just self-dealing so the losses are placed onto someone else. This model has spread. Bird, the scooter company, is not making money. Uber and Lyft are similarly and systemically unprofitable. This model is catastrophic not just for individual companies, but for their competitors who have to *make* money. Amazon has created a much less competitive and brittle retail sector. Netflix’s money-losing business is ruining Hollywood.


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