Zero-Sum Definition

In game theory and economic theory, a zero-sum game is a mathematical representation of a situation in which each participant’s gain or loss of utility is exactly balanced by the losses or gains of the utility of the other participants.

If the total gains of the participants are added up and the total losses are subtracted, they will sum to zero. Cutting a cake is an example of a zero-sum game in which one person’s loss is equivalent to another person’s gain, so the net change in total utility is zero. In contrast, non-zero-sum describes situations in which the interacting parties’ aggregate gains and losses are either less than or more than zero.