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Zero sum game

Sociologyindex, Sociology Books 2011

Zero sum game is a form of competition in which one or more parties must lose while one or more gains.

A game or political situation in which whatever is gained by one side is lost by the other so that the net change is always zero.

The Winners and Losers of the Zero-Sum Game: The Origins of Trading Profits, Price Efficiency and Market Liquidity 
Lawrence Harris, USC Working Paper, May 1993. 
Abstract: Trading is a zero-sum game when measured relative to underlying fundamental values. No trader can profit without another trader losing. People trade because they obtain external benefits from trading. These benefits include expected returns from holding securities, risk reduction from holding correlated assets and gambling entertainment. 

Three groups of stylized characteristic traders are examined. Winning traders trade for profit. Utilitarian traders trade because their external benefits of trading are greater than their losses. Futile traders expect to profit but for a variety of reasons their expectation are not realized. 
Winning traders make prices efficient and provide most liquidity. Utilitarian and futile traders effectively underwrite the winning traders' efforts. - rcf.usc.edu/~lharris/ABSTRACT/Zerosum.htm

Is War a Zero-Sum Game? Evidence from the U.S. Civil War
Marc D. Weidenmier, Claremont Colleges Working Papers.
Abstract: A new daily data set of Confederate cotton bonds trading in Liverpool is analyzed in conjunction with Union Greenback prices to asses the impact of war news on Civil War asset prices. The empirical analysis indicates the presence of a cointegrating relationship between Union Greenback prices and cotton bond prices after controlling for innovations in the cotton and bond markets.

The findings show that war emitted a common but asymmetric signal. War news was efficiently transmitted across the Atlantic Ocean via steamers and investors in London and in New York reacted the same way to the events of the Civil War. - econpapers.repec.org/paper/clmclmeco/2000-04.htm

 

 

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