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Tip of the Day Investigate Different Types of Mortgages

Investigate Different Types of Mortgages - Before purchasing a new home, after you have enough in the bank to make your 20% down payment, spend some time investigating who is...

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Zero-sum Game

Definition: Zero-sum games involve situations in which one person's gains are the result of another person's losses.  No wealth is created (or destroyed) in these games.

Examples: Examples of zero-sum games include options and futures.  If a person makes money on an options or future contract, it means the person who sold it to him lost money.  Another example is gambling: either you or the house win.

What about the stock market? The stock market is not a zero-sum game because stocks are not simply investments traded from one party to another.  Rather, they're representative of the underlying business.  So if the business creates value, the stock will do so for the investor as well.

 

Discuss It!

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golden age cheese said:

Why the stock market relates with this zero sum game. I didnât get the point in which that you relate the stock market with the zero sum game. I really want to know what is really happening here in this discussion about the stock market.

assignment help uk said:

Zero sum games are completely new to me and i am very excited to about them here. Most of the people play in their mean time. Nice saying on stock market too.

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