Asian Games Are Not Zero Sum

Non zero sum games in which correlations can be positive, OK.

You have them in hunter gatherer societies, but then through technological evolution, new forms of technology arise that facilitate or encourage the playing of non zero sum games, involving more people over larger territory.

A lot of forms of non zero sum behavior in the realm of economics and so on in everyday life often leads to cooperation.

The argument I make is basically that, well, non zero sum games have always been part of life.

Assuming that a few of you did not do the assigned reading, very quickly, the key idea is the distinction between zero sum games, in which correlations are inverse always a winner and a loser.

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But there's a more fundamental reason that it's not intrinsically upbeat, because a non zero sum game, all it tells you for sure is that the fortunes will be correlated for better or worse.

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Social structure adapts to accommodate this possibility and to harness this productive potential, so you get cities, you know, and you get all the non zero sum games you don't think about that are being played across the world.

Now, what is game theory about?

Varoufakis s Great Game

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The Spanish Government favoured the creation of virtuous circles of cooperation, enabling all the parties concerned to collaborate, making concessions and reaping positive benefits on a non zero sum basis.

The sum of all trade balances in the world is equal to zero, which means that not all countries can be net exporters and that currency wars end up being zero sum games. That is why America s entry into the fray was only a matter of time.

And this is Von Neumann and Morgenstern, who wrote the Theory of Games.

It assumes that people are looking out for what's good for them.

During the Great Game, Afghanistan was a buffer state.

I engage in the use of game theory, game theory is a branch of mathematics and that means, sorry, that even in the study of politics, math has come into the picture.

And you can think of it in terms of a game theoretic payoff matrix.

Yet, so far, the threat has not worked. To understand why, we can appeal to game theory, which provides economists and others a powerful framework with which to explain the dynamics of both simple and complex interactions.

More than a century later, the game continues. But now, the number of players has exploded, those living on the chessboard have become players, and the intensity of the violence and the threats that it produces affect the entire globe.

So economists talk about game theory that every two person game has a Nash equilibrium.

The extent to which China will engage Afghanistan positively will depend in large part on whether China rids itself of the prevailing zero sum mindset and facilitates America s military withdrawal by doing what it can to stabilize the country.

If this assessment is accurate, the obvious next question is how much further Abe and Xi can move toward détente, thereby appeasing their business sectors, without losing the backing of nationalists, who tend to view the bilateral relationship as a zero sum game.

So, in a way, the question is on what grounds am I upbeat at all about history? And the answer is, first of all, on balance I would say people have played their games to more win win outcomes than lose lose outcomes. On balance, I think history is a net positive in the non zero sum game department.

The inability of unconventional monetary policies to prevent outright deflation partly reflects the fact that such policies seek to weaken the currency, thereby improving net exports and increasing inflation. This, however, is a zero sum game that merely exports deflation and recession to other economies.

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Apparently, Varoufakis believes that his sophisticated grasp of game theory gives Greece a crucial advantage in the complicated dynamics of the negotiations. In fact, the game being played out in Europe is less like chess than like tic tac toe, where a draw is the normal outcome, but a wrong move means certain defeat.

HONG KONG Too often, debate about the relationship between the state and the market casts them as opposing forces locked in a zero sum struggle. But this simplistic approach quickly turns constructive discussion into a casualty of the ideological battle between advocates of state and market capitalism.

NEW YORK We live in a world where, in theory, global economic and political governance is in the hands of the G 20. In practice, however, there is no global leadership and severe disarray and disagreement among G 20 members about monetary and fiscal policy, exchange rates and global imbalances, climate change, trade, financial stability, the international monetary system, and energy, food and global security.

The most recent example of this dialogue of the deaf occurred in Europe, from January to July 2015. Month after month, the Greek government and its eurozone partners sat at the board, one side thinking the game was checkers and the other thinking it was chess.

Using exchange rates to boost net exports is a zero sum game at a time when private and public deleveraging is suppressing domestic demand in countries that are running current account deficits and structural issues are having the same effect in surplus countries. After all, a weaker currency and better trade balance in some countries necessarily implies a stronger currency and a weaker trade balance in others.

Yanis Varoufakis, Greece s new finance minister, is a professor of mathematical economics who specializes in game theory. But his negotiating technique unpredictable oscillations between aggressiveness and weakness is the opposite of what game theory would dictate.

He thought that his old reality based friends from the Ford administration were back in power. He thought that he and Treasury Secretary Paul O Neill could win the quiet inside game for sensible policy without resorting to an outside game that would make his reappointment in 2004 unlikely.

eBay solved the prisoner's dilemma and created a market where none would have existed by creating a feedback mechanism that turns a prisoner's dilemma game into an assurance game.

Of course, not everyone can gain share at the same time. Fortunately, if countries increase productivity with the aim of boosting relative productivity and growth potential on the tradable side, this will increase incomes and accelerate the growth of global aggregate demand.

Five years ago, policies aimed at cutting greenhouse gas emissions were seen as a cost burden on the economy. Negotiations were therefore a zero sum game, with countries seeking to minimize their obligations while asking others to do more.

A decline in oil prices is to some extent a zero sum game, with producers losing and consumers gaining. The usual thinking is that lower prices stimulate global demand, because consumers are likely to spend most of the windfall, whereas producers typically adjust by cutting back savings.

But Israel was wrong to believe that Egypt could be a gateway into the Arab world. The gate to Israeli Arab reconciliation remains where it was always been in the hands of the Palestinians.

Beggar thy neighbor policies could lower total trade volume a zero sum game from which no one would benefit. After all, Japanese exports rely on emerging and developing markets, with East Asia alone accounting for nearly half of Japan s foreign sales.