Zero-Sum and Non-Zero-Sum Game

Games can be classified as Zero-sum games and Non-zero-sum games.

A Zero-sum game is one where the gain of one player is exactly equal to the loss of another. For example, in a private game of poker, the total amount won by some players is exactly the amount lost by others.

On the other hand, Non-zero-sum games are scenarios where the outcome doesn't result in an equal exchange of gains and losses. In these games, it's possible for all participants to benefit or lose together.

Non-zero-sum games can be further divided into positive-sum and negative-sum games.

Positive-sum games are scenarios where all participants can win, and the sum of their gains is greater than the losses. For instance, in a trade agreement between two countries, both countries can benefit from better trade terms, leading to a situation where both are better off than before.

Negative-sum games are the opposite, where the total losses exceed the gains.

An example is a costly lawsuit between two companies. In such scenarios, the combined expenses from legal fees and any damages paid often surpass any benefits that the winner might secure.