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Zero-sum is an activity or strategy that seeks a bigger share of existing value without adding new value. This is often referred to as win-lose because any value you gain has to be taken from someone else.Win-win is an activity or strategy that creates new value. By creating new value it is possible for all participants to gain.
AnalogyThe classic analogy for zero-sum is dividing a pie between people. If you get a bigger piece, someone else gets a smaller piece. The equivalent analogy for win-win is baking more pies until everyone is satisfied.ExampleA real estate speculator buys houses and then immediately resells them. They hope to use their negotiating skills to obtain a profit on this activity. They don't improve the property beyond a few cosmetic changes. This is a zero-sum activity because it isn't creating anything of value. The people who buy from the speculator pay a higher price then if they had purchased from the original owner but they get no extra value. As an example of a win-win activity, a carpenter purchases historical homes that have architectural value but are in poor condition. She fixes them up, adding significant value to each property to sell at a higher price. The people who buy from her win because they obtain an improved property.
BehaviorAlthough some situations are inherently zero-sum, it is usually possible to add value. As such, most zero-sum activity comes down to behavior whereby people seek to gain a greater share of the world's wealth without doing anything productive.|
| Zero-Sum | Win-Win | | Definition | An activity or strategy that seeks to gain without adding value. | An activity, strategy or agreement that allows all to gain. |
Negotiation
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