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.
|Definition||An activity or strategy that seeks to gain without adding value.||An activity, strategy or agreement that allows all to gain.|
This is the complete list of articles we have written about negotiation.
If you enjoyed this page, please consider bookmarking Simplicable.
© 2010-2023 Simplicable. All Rights Reserved. Reproduction of materials found on this site, in any form, without explicit permission is prohibited.
View credits & copyrights or citation information for this page.