Wednesday, September 22, 2010

Zero-Sum Fallacy

Zero-Sum Game Fallacy...

Def. Zero Sum Game: A situation where anyone's gain is balanced by another's loss

Syn.  Constant Sum: where the benefits and losses to all sum to the same value

Cutting a Pie, is Zero/Constant-Sum, because taking a larger piece reduces the amount of pie available for others.

In Economics, Goods and Services can be created, destroyed or poorly allocated thusly creating net gain or loss.

In Capitalism IE the Free Market, "no exchange takes place unless both parties benefit" -Milton Friedman, this in and of itself would not necessarily avoid adverse affects to third parties but "[He, the proverbial merchant, is] led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was not part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. " -Adam Smith

Non-Zero-Sum: A situation where the gains and losses are less than or more than Zero

List of Links to research for the writing of this blog... from best to worst [based on quick skimming], and then Wikipedia

No comments:

Post a Comment