Definition of 'Zero-Sum Game'

Definition of 'Zero-Sum Game'

A situation in which one participant's gains result only from another participant's equivalent losses. The net change in total wealth among participants is zero; the wealth is just shifted from one to another.

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Investopedia explains 'Zero-Sum Game'

Options and future contracts are examples of zero-sum games (excluding costs). For every person who gains on a contract, there is a counter-party who loses. Gambling is also an example of a zero-sum game.

A stock market, however, is not a zero-sum game because wealth can be created in a stock market.

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