We like playing games

This post is inspired by a book I read many years ago on a bus journey. I hope I remember it well enough to quote its content correctly. The book was called "The Science of Getting Rich" and was about principles for getting rich. (Ok Ok, I read this kind of books also!, for that matter I would read anything readable if I have time at my disposal and nothing else to do). Well, since I am not blessed with an exceptional memory I could remember only one big message from the book and everything else got eroded over years.

The message is simple, "there is more than enough in this world for the population that it supports". I remember this, partly because, this is quite a contrary statement to what is common knowledge. Starting with the definition of economics in simplest terms as the study of limited resources to fulfill unlimited desires; to the fact, that very soon we might run out of all the oil in the world.

So, the point that there is enough in this world for all of us remained with me since then. Having this perspective and my (limited) knowledge of Game Theory, I related the two.

Game Theory defines many kind of games (and classifications). In one of the classifications we have zero and non zero sum games. For this post, I have put them in three different categories.

Zero sum games: The net profit of the "system" is always zero. In short the amount of "reward" (for the lack of any better generic word) is constant and by taking more than your average share you are depriving someone else of its average share. Gambling/betting and even trading in derivatives falls in this category.

Positive Sum games: The overall outcome of the system is positive. They can be called win-win scenarios also. Trade by definition is one such case.

Negative sum games: The system's outcome is dwindling and as a group its getting worse. Some people might still gain thereby causing some others to lose more than the average.

The Game
Having set these definitions in my mind, even though I never wrote them down before this entry, I try and analyze any situation using these parameters. If the pie to be had is constant or shrinking, you are in a wrong situation. It is already a sinking ship and you will need to work much harder to get the same returns as in a Positive sum game.

The Play
It's not only about choosing a situation (game) but also about what you make of it. You can play in any situation assuming it to be a zero or a negative sum game. If you play with that assumption you are guilty of making the world a worse place than it could/should be.

As kids, we are all born with a zero sum game mindset. Most of the times siblings compete for affection, toys, space and practically everything. However, thanks to our parents, they try to make us more agreeable as we grow, but do we really grow? Sometimes, the opposite may also happen based on where and how we grow up.

In negative and zero sum games, your gaining profit has a very high correlation to others incurring losses; to the extent that it may appear to be one and the same thing - "others loss is my gain". With this we may start focusing on just increasing the losses to others because that might seem easier than working harder to increase your own advantage.

Having all the kinds of games at hand, and applying the principle from the book, it isn't unlikely that almost every game can be played as a positive sum game thereby converting it into one.

Comments (1)

Nice read. This line makes me think "If the pie to be had is constant or shrinking, you are in a wrong situation." I can already imagine a couple of wrong situations. I can think of a right situation too :-).