Avoid negative-sum games

Winning wealth and happiness takes effort, skill, and luck. But there is a shortcut: deciding which games to play – and what is even easier – deciding which ones not to play. Negative-sum games are particularly easy to spot and always toxic.

People (especially competitive ones) tend to put a lot of effort, preparation, and attention into winning real-life games: getting that promotion, getting a raise, outgrowing a competitor, choosing a winning stock.

Our perception of game theory is skewed toward a zero-sum game scenario in which the winner takes all and the loser leaves with nothing. The term “Zero-sum game” was coined by John von Neumann for the analysis of nuclear conflict. But he later resented the concept of both zero-sum and non-cooperative games (prisoner’s dilemma) as something deeply incompatible with human nature:

What von Neumann disliked most about Nash’s approach, though, was the axioms upon which it was built. The idea that people might not work together for mutual benefit was anathema to him. He was central European to the core, his intellectual outlook shaped by a milieu where ideas were debated and shaped over coffee and wine.

Book: The Man from the Future: The Visionary Life of John von Neumann

Positive-sum

Positive-sum games are presented as the alternative: In this situation, more value is created than destroyed. It can either be a win-win scenario, where we both benefit, but also a win-lose scenario where you get more than I lose.

A good way to think about this is favors: let’s say I’m going to the store and can pick up something for you. It’s a relatively low effort for me (since I’m already at the store) and a much bigger benefit to you (it saves you a trip to the store). Value gets created.

A more complex example is capitalism: value gets created by parties involved in positive-sum games. From Paul Graham’s “How to make wealth”:

Suppose you own a beat-up old car. Instead of sitting on your butt next summer, you could spend the time restoring your car to pristine condition. In doing so you create wealth. The world is– and you specifically are– one pristine old car the richer. And not just in some metaphorical way. If you sell your car, you’ll get more for it.

Essentially, positive-sum games are what we call “progress”. Most opponents raising points about the progress being unsustainable or impossible long-term (“the resources are finite!”) didn’t do their homework and assumed positive-sum games do not exist.

Negative-sum

Play stupid games, win stupid prizes.

You are playing a negative sum game when you destroy more value than when you create: for example, you steal complicated machinery to sell for scrap metal. You have destroyed value in the world.

Negative-sum games are just making the world worse

I can’t stress this enough: Everything you hate is to prevent people from playing negative-sum games.

• Passwords, locks, keys, and fences that make cities unwalkable are meant to safeguard against trespassers, thieves, and fraudsters.
• We have to limit the functionality of software we develop to protect against spammers and free plan abusers
• You cannot have a beer in a public park because few dumbasses created disproportionate problems when they did.

Every “stupid” rule comes from somebody overstepping the guidelines of reasonable behavior. If you are curious why a pickle has to bounce in Connecticut, or why it’s illegal for Donkeys to sleep in bathtubs in Arizona, this infographic by Olivet Nazarene University:

Why negative-sum games are bad even for the winners

“Sure Artur, but I am a winner and I am here to win! Why should I care about the world or others?”.

Let’s analyze this case in a purely rational payoff-matrix way:

1. Positive-sum games have unlimited upside. Negative-sum games are limited to the total value of assets in the game. So the upside is limited.
2. Not only is the upside limited, but because it’s a negative-sum game, the upside is lower than the downside
3. Even if you have extreme skill, being in a game means an element of chance. You will eventually lose. When you do, you will lose more than you won in previous rounds because of the negative sum.
4. There is also an opportunity cost. By playing a negative-sum game, you are missing out on positive-sum or even zero-sum ones.

Negative-sum games to avoid

1. The #1 destroyer of wealth is divorce. The #1 cause of divorce is infidelity.
2. A good heuristic for stupid games is doing it just “to show them”- Rage quitting (your job or otherwise) gives you momentary satisfaction but long-term consequences of missing a good timing- Buying stuff to impress your neighbors never works out.
3. Stealing. Despite what you might think, the vast majority of scammers and fraudsters do get caught.
4. Shooting yourself in the foot by making stupid choices regarding important aspects of your life.

Funny how you can avoid all that by being a decent person. Act accordingly.

A thing I’ve made

I created a small app to render AI-created worlds inside a VR headset. All scenes are fully AI-generated based on a prompt.

If you have a prompt idea, send me one, and I’ll add it!

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