The core concepts of game theory: zero-sum, positive-sum, and negative-sum games

Zero-sum game: Your happiness depends on someone else's pain.
The size of the cake is fixed. The winner's gain is exactly the loser's loss, and the total payoff sums to zero. Examples include chess matches and gambling—if you earn 1 dollar, your opponent loses 1 dollar.

Positive-sum game: Everyone can make the cake bigger to achieve a win-win situation.
Through cooperation, the total payoff exceeds what each party could achieve alone. Examples include international trade—both sides leverage their advantages to exchange goods, ending up with more than before; or startup teams—growing the company together so everyone benefits more than if they worked alone.

Negative-sum game: Conflict causes the cake to shrink, sometimes resulting in mutual destruction.
Total payoff is less than zero, and participants suffer overall losses. Examples include price wars—both sides lower prices to capture market share, reducing profits; or wars—huge costs are invested, but the final gains are far less than the expenses.

In summary, zero-sum is about distribution, positive-sum is about creating value, and negative-sum is about destroying value.

Real life is often a mix: externally, it may be positive-sum (like expanding the entire market cake), while internally, competition can be zero-sum (fighting for market share). $BTC ‌$XRP ‌