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Zero-sum game


Winning is better than losing, but everybody loses when the war isn’t one worth fighting for.

Peter Thiel

In zero-sum games, for someone to win another has to lose.

Why it matters: It is important to identify zero-sum games and avoid them because the resulting drama distract us from what matters strategically.

  • It makes us hallucinate opportunities where none exist.
  • It takes significant time to play status-games because status needs to be known, signaled, and maintained.
  • Those who play zero-sum games don’t attract opportunities from long-term players.
  • In zero-sum industries, prestige is given much higher weightage than merit.

In contrast: Be on the look out for and play Positive-sum Games.

What causes it: Zero-sum games are triggered by scarcity, conformity, and status-seeking.

  • Competition happens when it isn’t feasible to create net-new things and there is isn’t enough money (store of value) to go around. This happens in industries like real-estate, etc.
  • In some industries, success is rewarded with status instead of money (store of value), for example, in academia, news and media, identity politics, managers in a dysfunctional organization, etc. In such situations, signaling becomes a better means for advancement than actually doing the work. In contrast, incumbents play the role of gate-keepers.
  • A rookie in a cricket team doesn’t resent a pro. However, when hierarchies are built without any meaningful criteria and merit, it degenerates into a zero-sum game. For a number 2 to be number 1, the number 1 must be brought down.

To break free from zero-sum games:

  • Think and act independently. Don’t conform.
  • Think in Building Blocks
  • Build on what you’ve got.
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