Zero-sum Games

At about 10 o'clock in the morning the phone rang on the CEO's desk. His sister announced her promotion as Chief Corporate Counsel of another firm. Her brother complimented her reluctantly. They shared a few comments, and then she said, "I want to call Mom and Dad." Her brother stared out the window after the conversation thinking how he could get one-up on his sister. Years later he told a conference how his zero-sum views kept him from sharing his sister's excitement.

Self-serving motivation instigates zero-sum behavior.  Anyone seeking their own achievement or rank at all costs maneuvers each event with single-minded purpose.  Zero-sum players parry condescending and pejorative opinions.  Arguments never seek compromise or acknowledgement of the opponent's view.  Every opposing statement is wrong without reservation or further research.  Politicians demonstrate this expertise repeatedly: some Democrats will not accede to a Republican, and a Republican avoids conceding to a Democrat.

Religious leaders take similar stances.  Doctrine and dogma provoke schisms where there ought to be conciliation.  Ultimate divisions between groups rest in the mind of God.  God's distinctions will become known in time.  Angry differences do not further the Kingdom of God anywhere in this world.

Husbands and wives may suffer the weight of zero-sum gaming.  "You are stupid!"  "You can't do anything right!"  "That is not the way to do it; who the #$%@!& taught you to do it that way?"   Marriages begin with loving comments and embraces until the games begin.  Then the bed and the table are the playing field of demoralizing put-downs.  Neither husband or wife wins; no marriage survives the zero-sum game.

Robert J. Aumann and Thomas C. Schelling delineated the nuance within zero-sum games, and received the Nobel Memorial Prize in Economic Science (October 11, 2005) for their work known as "game theory". For most of us, watching our children playing a game on Microsoft's X-Box is all we know about game theory. Aumann and Schelling's work has implications outside the box of every discipline and experience.

Louis Uchitelle, NY Times reporter (October 11, 2005), explains how game theory differs "from mainstream economics". Most economists assume "that people behave rationally and act independently of one another" Robert Aumann observed people acting at a particular moment by observing "what other people do or what they imagine others will do". Aumann found his views accentuated when groups or people have opposing goals.

Wall Street works game theory between 9:30AM and 4:00PM

* Few investors take a contrary trading position: never fight the tape

* Few stock brokers take a position differing from their office colleagues: clients of the same brokerage office may find their statements look the same.

* Few commodity traders missed the shift in oil prices

* Few retirees have a portfolio different from their peers.

Knowing the actions of your opponent or colleague may preserve your portfolio, your country's security, and your marriage. Community resolves conflict while encouraging problem resolution and progress. Our innate propensity toward rational action supports Aumann and Schelling's observations more often than not. We challenge this proclivity when we presume our political opponent, investment scheme, or marriage requires a zero-sum maneuver. Is any event or methodology worth an "all or nothing" stance? Only the lottery!