Zero Sum Game

In the first quarter of 2010, according to the government¡¯s statistics, Korea recorded an 8.8 billion dollar loss from trade with Japan. In trade between two countries, when one country gains from trade, the other country may gain or lose from trade. When one country gains a certain amount of money from trade while the other loses the same amount of money, it can be called a zero sum game.

A zero sum game is a term used in game theory to describe a game between two players, where the gain of one player is offset by the loss of the other player, equaling the sum of zero. For instance, if you play a single game of chess with someone, one person will win and the other will lose. The win (+1) added to the loss (-1) equals zero.
If you play chess in a tournament, each individual match is zero sum, with one winner and one loser. However, outside of the game, you are given a number ranking. This ranking can change much if you lose to someone of a much lower rank. It may not change much if you lose to a much higher-ranking player. When a single game is actually one in a series with an outside ranking, the total result may be non-zero sum, since wins or losses are not the only thing that counts.

The zero sum game is not always about scores. A loser may gain as much from his losses as he does from his wins. He may become a better player as a result of losing; so though, technically, the game comes down to one winner and one loser, it may be advantageous to lose. Players matched against those with much greater skill may be more interested in learning than winning.

Countries may gain from trade regardless of the zero sum game theory. A country that loses from trade may gain something intangible such as the respect of another nation and better diplomatic relations. As in chess where the loser may profit by his loss, a country that takes an economic loss in trade may profit in other ways.