Positive-Sum Game: The Optimal Selfish Choice (Game Theory Explained)

What is a Positive-Sum Game?

A positive-sum game is a situation where all participants can benefit simultaneously. The total gains exceed the total losses. Unlike zero-sum games (where one person's gain is another's loss), positive-sum games create value for everyone involved.

Key distinction:

• Zero-sum game: Your gain = My loss (total value stays constant)
• Positive-sum game: Your gain + My gain > 0 (total value increases)
• Negative-sum game: Total losses exceed total gains (value is destroyed)

For example, trade is a positive-sum game: both parties value what they receive more than what they give up, so both benefit. Competition via innovation is positive-sum: better products benefit consumers while successful companies profit.

Why Positive-Sum Games Matter for Your Prosperity

Most of your prosperity depends:

• in the short term, on zero-sum effects
• in the long term, on positive-sum effects

Think about a hairdresser. Today's income depends on whether today's customer enters their shop or their competitor's. But their quality of life mostly depends on society: how productive farmers are, how cheap building homes is, how safe the city is, etc.

After all, the median hairdresser of 2025 has a better quality of life than the hardest-working hairdresser of 1750, even though their job didn't change, because society around them did change.

The point is: positive-sum effects dwarf zero-sum ones over the long term. This is somewhat evident. What's less evident is that the same game can be played with zero-sum or positive-sum tactics.ShareCopy

Think about the competition between companies. Do they compete mostly by focusing on zero-sum tactics or positive-sum ones, such as technical innovation? Even customer acquisition in the absence of innovation can be zero-sum or positive-sum, depending on whether the tactics used increase trust in the product category or decrease it, for example, by lying to customers or breaking their trust.

Or think about how countries fight poverty: do they do it predominantly using zero-sum tactics, such as financial redistribution (which redistributes scarcity), or positive-sum ones, such as building the capacity to produce enough goods and services so that everyone can get some (creating abundance)?

Or think about higher education. Are degrees designed and attended predominantly for their zero-sum benefits (a piece of paper that gets you ahead in a zero-sum job search) or their positive-sum benefits (useful skills that increase the country's prosperity)?

But what determines if society will play a given game using zero-sum or positive-sum tactics? Plenty of factors and incentives matter, sure, but an underrated one is the belief of whether one's prosperity mostly depends on zero-sum or positive-sum effects. If people believe life is mostly zero-sum, they’ll default to zero-sum tactics. If they believe in positive-sum, they’ll invest, cooperate, and innovate. And, perhaps most importantly, treat societal trust, societal infrastructure, and societal productive capacity as a common good, worth building and never worth consuming.

The tricky part is that, indeed, using zero-sum tactics generally gets you ahead in the short term, but if you want your quality of life to grow beyond a certain level, you cannot do without society predominantly using positive-sum tactics.

This is, I believe, the key point we should hammer. It's paramount that people understand that playing positive-sum games is not only the optimal choice from a prosocial perspective but also from a selfish one.ShareCopy

Positive-Sum vs Zero-Sum: Understanding the Difference

The choice between positive-sum and zero-sum tactics shapes entire societies. Here's how they differ in practice:

Aspect	Zero-Sum Thinking	Positive-Sum Thinking
Wealth creation	Redistribution of existing wealth	Creation of new wealth
Competition	Winning by making others lose	Winning by creating more value
Business strategy	Market share battles, price wars	Innovation, expanding the market
Education	Degrees as ranking signals	Skills that increase productivity
Trust	Consumed as a resource	Built and maintained
Time horizon	Short-term gains	Long-term prosperity
Example	Lobbying for protectionist policies	Investing in R&D for better products

The critical insight: zero-sum tactics often win in the short term, but only positive-sum tactics can create lasting prosperity.

Real-World Examples of Positive-Sum vs Zero-Sum Games

In Business

Zero-sum: A company competes by spreading false information about competitors, decreasing overall trust in the industry. They might gain market share temporarily, but total market value shrinks.

Positive-sum: A company innovates to create a better product. They gain customers, competitors improve to keep up, and consumers benefit from better choices. The entire market grows.

In Poverty Reduction

Zero-sum: Financial redistribution without capacity building. Wealth is moved around, but total productive capacity stays the same (or decreases due to misaligned incentives).

Positive-sum: Building infrastructure, education, and institutions that increase productive capacity. Everyone can access more goods and services because more are being produced.

In Personal Careers

Zero-sum: Office politics, taking credit for others' work, sabotaging colleagues. You might advance, but organizational effectiveness suffers.

Positive-sum: Developing genuine skills, mentoring others, contributing to team success. You advance because you've created real value, and the organization prospers.

In International Relations

Zero-sum: Mercantilism, trade wars, and beggar-thy-neighbor policies. Countries fight over fixed resources.

Positive-sum: Free trade, technology sharing, and cooperative problem-solving. Countries specialize in their comparative advantages, and all benefit from increased productivity.

How to Shift from Zero-Sum to Positive-Sum Thinking

The transition requires understanding that your belief about the nature of the game shapes which tactics you use:

1. Recognize long-term effects: Zero-sum tactics might work today, but they destroy the foundation for tomorrow's prosperity.

2. Invest in common goods: Trust, infrastructure, institutions, and knowledge are positive-sum investments that compound over time.

3. Choose value creation over value capture: Ask "How can I create more value?" before "How can I capture more value?"

4. Build productive capacity: Whether in your own skills, your organization, or society, focus on increasing what can be produced, not just redistributing what exists.

5. Maintain trust: Treat trust as a renewable resource that grows with use, not a finite resource to be extracted.

The Selfish Case for Positive-Sum Games

Here's the paradox: acting in enlightened self-interest means playing positive-sum games.

A hairdresser who maximizes short-term profit through price gouging might win today's zero-sum game. But their long-term quality of life depends on:

• Agricultural productivity (food prices)
• Construction efficiency (housing costs)
• Public safety (secure environment)
• Medical advances (health and longevity)
• General prosperity (purchasing power of customers)

None of these improve through zero-sum thinking. All require positive-sum cooperation, innovation, and investment.

The takeaway: If you want prosperity beyond a basic threshold, you need society to predominantly use positive-sum tactics. And the only reliable way to have such a society is to practice positive-sum thinking yourself, not out of altruism, but out of rational self-interest.