The Zero-Sum Bias: When people think that everything is a competition | Hacker News Reader

The Zero-Sum Bias: When people think that everything is a competition

effectiviology.com

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I see this most clearly in people who will not trade in a board game like Monopoly unless the deal is extremely slanted in their favor. They simply can't understand that people who trade will always beat people who don't, and the easiest way to trade is to trade fairly.

If four people are playing a game of Monopoly, and two trade with each other but the other two refuse, now two people are playing Monopoly and the other two are begging for it to end.

(Please don't reply by criticizing Monopoly, I know that many people don't like it, I suspect this is a major reason why.)

It's one of my all-time favorites. My favorite 'house rule' was invented by my nephew: He negotiated a % of rent I collected utilizing properties he traded to me.

Funny corollaries because Monopoly is a zero-sum game (at the end there will be a ordering of players by relative wealth, and their absolute wealth ceases to matter): players should be trying to 1) trade as much as possible, even if some trades are slightly slanted against them, 2) spread their trades evenly amongst the other players, and 3) to actively discourage trades between other players.

You might as well give both players who trade a trade point, and award the victory to the player who has the most at the end.

Yes, Monopoly more or less is (there are ways to gain and lose money without taking the other players' money, but they almost do not depend on players' choices). I think the parent's point is that trade in monopoly, however, is not. By making an exchange that allows both traders to complete a color set, they end up both much richer than before the trade.

I understand the parent's point because I am the parent.

"I'll trade you this missing piece, but get 10% of all the rent you collect when someone lands on them AND I don't need to pay you rent if I land in them... AND if you land on free parking the next 2 times, that cash goes to me"

Derivatives trading in monopoly is pretty evil.

There's such an advantage to having a full color set, it's hard to imagine folks that don't want to trade to get one.

I've come to discover that a lot of people just wait to randomly get one, one person eventually does, and the others just wait to land on that person's property and lose. After 6 hours of play and maybe one elimination they call the game off and vow never to play again.

This is my life-long frustration on monopoly and Catan. There isn't a better case for free trade than playing those games in my opinion, but people really are reluctant to understand that trades make their possition better at the expense of everyone else.

Allow me to boast about my single most fantastic monopoly play where nobody wanted to trade at all, so I initiated a series of trades where I gave each opponent a monopoly without getting myself one, except for the very last trade of all with a player that had all the cash in the game and no properties and I gave him a small monopoly and got a huge one + all the cash to build on it. They key is that each trade I made increased the opponents chances to win enormously, but the last one basically gave me the game in exchange for a small chance to someone that had none at all.

Sounds masterful. I've always explained Monopoly as a trading game unlike any other out there in that you spend the entire first 3/4 of the game building up to one big trade. It may be a complex multi-part trade, involving other trades in preparation, but it's all you were working towards. After that trade, you're just a passenger seeing how your valuations played out.

Sometimes, like what you did here, you can just structure everything so well that every trade is a better deal for the other player than it is for you, but the sum total of the trades makes you unstoppable. As I mentioned before, this is almost inevitable when you spread your trades between all of the players, and they don't trade with each other. So if you specifically target their needs (like you did), they might not even be able to come up with productive trades with each other...

Absolutely correct!

Monopoly is a zero sum game. So perceiving it as such shouldn't be the bias that leads to poor strategy.

(edit: it seems that it may be possible to play monopoly in a way that generates infinite money and with no win condition)

It technically isn't, because if everyone forgives each other's expenses they can be infinitely rich as the bank never run out of money.

Well I'll be. I'd thought that the rules were more strict. It appears that even if the bank does run out of bills more can be created by writing on pieces of paper.

Money in monopoly doesn't matter except as a means to increase your probability of winning. The probability of winning is zero sum.

Thats not the use of zero-sum used in economics or in (some applications of) game theory: any game with a discrete victor is a zero-sum probability of winning.

What is not zero-sum is the amount of money/points floating in monopoly. If you played a monopoly tournament where players can resign, and at the end of the game you sum up all the money as points for a final ranking you would see monopoly is truly non-zero-sum.

Trading in Monopoly is not zero-sum, the outcome is.

One of my favorites is the economy. People constantly talk about there only being a finite number of resources or money. While this is true, there is not a finite amount of wealth. The whole point of an economy is to generate new wealth and goods. Inventions and innovations. It is easy to see when you take the historical perspective, that the vast majority of us are living much better off than those a hundred years ago and amazingly better than those of just a thousand years.

Absolutely. This is also a huge problem in trade. Trump, for example sees trade in zero-sum terms, where if China and Europe are doing well, that's proof that America is losing.

Peak urban real-estate, regions with good weather, clean air and water, natural resources, biodiversity etc. might be counter points. Unless we achieve fundamental breakthroughs in natural and physical sciences as well as improve basic economic incentive structures that drive corporate behaviour, our current prosperity might be short-lived. It is difficult to confidently predict how any of these things will turn out though - our way of life has undergone massive change in the last five decades than it might have anytime before that, and that pace is only accelerating.

I mean more as a generalization. But as a counter point, we do have AC now. We are better at getting access to clean water. I wouldn't say things are short lived, since the trend has been going on for thousands of years. There's definitely been some bumps in the road (some pretty big ones), but usually they are local and short (in the grand scheme of things).

Money is a surprisingly poor way of measuring an economy. AC may be cheap as a percentage of GDP, but it can make a huge difference in quality of life. However, if you look at meat production as a share of GDP it significantly reduces the calculated economic growth over very long time periods.

You're exactly right. We have much better access to AC than our ancestors did.

Based on observations I have the opposite view. A lot of human behavior would not make sense if we only measured resources and not social competition over wealth and status. There is even biological aspects like stress which get effected by the relative status between members of a community.

Resources however increases each year with more people enjoying the benefits.

> Resources however increases each year with more people enjoying the benefits.

> RESOURCES ... INCREASES EACH YEAR

I wouldn't call this a zero nor negative sum game if the game is to gather resources (resources with certain value. Which I think you'd agree that more recent resources have higher value. Like an AC vs a fan).

> I wouldn't call this a zero nor negative sum game if the game is to gather resources

yes, that would not be a zero sum game.

If the game however is about wealth there are things like status symbols which drain resources but increases perceived relative wealth.

Would you agree that status symbols with no intrinsic value are a zero sum game? Could a status symbol for wealth work if everyone had it and could afford it?

I'm not sure why you are shifting to status symbols though. I'm talking about things that make people better off. Money, widgets, access to clean water, and medicine. Sure we can talk about status symbols, but it seems kinda contrived to make your point and not the one that we originally started with or have been discussing. So unless you have a good reason for that digression I'm having a hard time seeing this as anything but a non sequitur.

When people use imagery to illustrate wealth, for example in a video or say the Wikipedia article for wealth (https://en.wikipedia.org/wiki/Wealth), we see things like gold. Google images for wealth displays jewelry. Expensive cars. Expensive boats. Expensive mansions.

Resources would be food, clean water, shelter, land, gasoline, things which purpose fulfill a specific need.

I would say that the first thing, wealth, represent a zero-sum game. The value of such items goes down as more people has them, and thus the status of owning them goes down as more people has the same item. Resources however is not a zero-sum game. The value of clean water will always be high regardless of how many other people have clean water.

Money in itself sits between wealth and status. It can be used for both, through at some amount it turn from resource and become just accumulated wealth.

Well I suggest reading carefully that first paragraph from Wikipedia. It does agree with me but I'll give you that it says it can be context dependent and you are talking about what it is considered "to be wealthy". In that context, I think if you considered the average person a hundred years ago to a average person today, the person today would be considered wealthy (to the person from a hundred years ago).

But to quote the first sentence of the second paragraph

> At the most general level, economists may define wealth as "anything of value"

Which is why Saudi Arabia is "wealthy", because they are rich in oil resources.

> Resources however is not a zero-sum game.

Great, we're done here, right? We agree?

To a person with access to clean water, having access to clean water does not make one wealthy. To someone that doesn't it does. But this is the difference between the economic term of wealth and the colloquial term of "to be wealthy". (Though we can say that all westerners are wealthy if we take the right perspective, but I won't get into that).

I actually will get into that. You're taking this from a western-centric point of view. Not only that, a temporally local point of view. I'll ask you to reread my original comment now that there is added context given. Specifically that laid out in this paragraph. I'm not talking about money. The value of money is a result of the economy, not the other way around. You're conflating things that don't interact that way.

Honestly I don't even understand your point. Because I'm saying things like "We have AC and good medicine. Our ancestors a thousand years ago had neither. Ipso facto, we're more wealthy". I have absolutely no idea why people with expensive things discredits this argument. I'd even argue that while off topic, if anything it helps mine. Because previously only monarchs had that kind of wealth, now we have almost 15 million millionaires in America alone. That's like the global population of 5000 years ago. You can also find my link to the world bank that shows the number of people living in extreme poverty (globally!) has been plummeting. These are the kinds of things I'm talking about. Not that some rich person has a nicer house than you. But that there has been a trend where everyone everywhere is doing better than they were before (given the time scale).

You seem to not get my point so let me explain it in a other way.

All resources can represent wealth, status and power, but only if others are excluded from it. For example clean water is not consider wealth in a west-centric point of view where water is free, but in the desert clean water can very much represent wealth. A person who can waste clean water in the desert to plant a garden is wealthy and gains status, while the same person growing the same garden with the same amount of water gain no such status if it next to a fresh water lake in say Sweden.

In the absent of a zero sum game wealth does not exist. This does not mean that resources do not provide benefits. They do. Our ancestors a thousand years had less resources and thus suffered more from the effect of that. If we had a time machine and we traveled back in time we would be more wealthy because we would have resources that they do not.

A easy way to deal with the terminology is to outsource our definition. Wealth is that which a wealth tax taxes. Good medicine provided by the state, for all its extremely high value to society and individual people, is not something that can be taxed through a wealth tax. The very concept would not make any sense. The only thing a wealth tax can tax is wealth. Ipso facto, good medicine provided by a well fare state is not wealth. It great, it is good, it is useful, it is valuable, but wealth it is not.

While this is true, there is not a finite amount of wealth. The whole point of an economy is to generate new wealth and goods. Inventions and innovations.

This is a frustrating hand-wave that I've been subjected to for far too long. It's absolutely possible that there is a finite amount of wealth.

Moreover, even in an economy with positive growth, if a small fraction of individuals capture a large enough amount of the growth, wealth has effectively been capped for everyone else.

First off, I hope it is clear that I am talking long trends and not local ones. I thought this would be apparent with phrases like "just a thousand years." What I'm saying is that the vast majority of people on this planet have better access to food, clean water, medicine, housing, etc than our ancestors did. I mean we have AC and people a few hundred years ago had shade and fans. This does not mean that inequality does not exist, nor does it mean that we've made the world a great place and no longer need to improve. It doesn't even say how much further we need to go, just "things have gotten better for most people." If you read my comment that way I do not think it is deniable, but fact. Interpreting it conversely is frustrating because I clearly stated longer trends, not locality.

Second off, inequality can still exist in positive sum games. You can even have players which have gained negative utility. Positive sum just means that the total utility from all the players is positive. Doesn't say anything about exploitation, fairness, etc.

Third, I'd argue that part of the presumption of a zero sum game is a problem in capitalism. Since many people see "games" as "if I don't get x then that is equivalent to losing x". Or "if person has x then I can't have x". This is the "we both can't be wealthy" mentality or "you having more wealth than me means you're better than me" mentality. Given your comment I think you'd agree that these are destructive mentalities, but they stem from (among many other things) thinking of things as zero sum games. Not that we all can be winners.

That said, I do think systems can be exploited and there can be bad actors. But that's not really what we're talking about here is it?

I also want to be clear. When I say there is not a finite amount of wealth I am assuming time exists. At any given instance there is only a finite amount of wealth. As time progresses it either increases or decreases. I am saying that given a large enough time frame (which don't have to be that large) the trend is of increasing wealth/resources.

If by the wealth you mean land, then yes it's finite. But the ownership of man-crafted things is not. You can always create new apps or websites that generate values. Those man-crafted things can become useless someday as well. For example, a 3.5" floppy disk drive probably isn't worth what it used to be anymore.

...that depends on how you define wealth but you know, there is the infinite vastness of space. So to say that wealth is finite doesn't even make sense when talking only about raw resources. Then add to that the potential scientific innovations, machines and other things humans can invent and produce from all those raw resources and it's pretty infinite as far as we'll ever know, certainly in our lifetimes times a trillion.

For humans, yes. For other species, sadly, the last hundred years were most likely devastating. Which make me think that in the end, it is a zero sum game as long as we remain on the same planet and don't recycle our waste.

> vast majority of us

Like 1% or 10%?

No I mean this [0]. Percent of people that live in extreme poverty is plummeting. Or select most other metrics and you will find similar trends (as in >20 year time spans)

[0] https://ourworldindata.org/uploads/2013/05/World-Poverty-Sin...

The world population between 1820 and now changed so dramatically, those datapoints are virtually meaningless.

Not to mention, they indicate either 1/2 or 1/4 (depending on who's counting) lived with less than $2 per day. Not exactly something to celebrate.

The economy does none of those things. What you are talking about is technological progress and money is just one of humanity's greatest inventions out of many.

I see people interpret personal comfort as zero sum and it drives me nuts. Like somehow other people being safe and comfortable devalues ones own safety and comfort.

I suspect it is because many humans derive self-worth from seeing other people who are worse off than they are. If you have that mindset, personal comfort really can be a zero-sum game, sadly...

What you just described is rivalry-based schadenfreude.

> Rivalry-Based Schadenfreude is individualistic and related to interpersonal competition. It arises from humans' desire to stand out from and out-perform their peers. Another person's misfortune elicits pleasure because the observer now feels better about their personal identity and self-worth, instead of their group identity.

I actually believe this effect is responsible for most of the racism we have in the US. Black people are an easily identifiable “lower class” who aren’t supposed to have power over white people or have higher social standing. A lot of Americans were irrationally angry at Barack Obama as a result.

And that's no accident. I'm currently reading Kendi's excellent "Stamped from the Beginning". He goes into a fair bit of detail how early in the US's history poor whites allied with poor blacks in pursuit of better economic equality. The white elites quickly recognized this as a problem and worked to turn poor white people against the black population. We're still paying the price today.

W.E.B. DuBois wrote about this same exact scenario a hundred years ago as well, though writing about the reconstruction period in the South after the war

Protip: please don't say "humans" when you can just say 'people', or even 'folks'! It makes you sound a lot more, well, human, and less like a poorly-programmed, clunky robot.

this feels like a superfluous nit

Thank you human :)

Protip: No one cares about this

Could you give some examples?

What I was thinking of as I typed that comment was people who begrudge increases in the standard of living for those in poverty. I see this in two forms. The first and most direct form I see is when people don’t want minimum wage to increase because it means their own wage becomes closer to the minimum. The second and more insidious form I see is in judging the entire concept of “poverty” in a critical light. I recall my mother being furious that the average person below the poverty line had a color TV (this was in the 90s). I would think in a progressive and loving society we might celebrate the fact that what we consider our poorest citizens have access to technology and new niceties.

> I recall my mother being furious that...

I'm going to be the first to acknowledge that you know your own mother a lot better than I do; but strictly from what you've written that is a defensible position.

Most of the readers here live in a society that is extremely compassionate compared to most historical societies; one where there is constant political pressure for the people who make good decisions to support those who make bad decisions. If some impoverished person is going into debt or spending the last of their savings to buy a colour TV, that is money that someone who is relatively well off is going to have to make up later, eg, when our poor friend comes up against unexpected medical expenses. And a colour TV is pretty much a pure luxury that will further cause them to waste time not improving themselves or the world around them.

I'm not about to start shouting at anyone; but being a cautious person who prepares for many contingencies is very frustrating because if you build up a financial buffer against things going wrong you have to start picking up the burden for people who not only made stupid choices, but don't realise it. Simply don't acknowledge that they were stupid and also would make the same choices again with enthusiasm. I don't even mind supporting a few people who are just lazy, but supporting someone who won't acknowledge that they are actively making their situation worse is miserable.

The difficulty is fundamental attribution error.

My mistakes are not mistakes, they are bad luck.

Your bad luck is not bad luck, they are mistakes.

Modern Life is so complex.

And in many situations , telling whether they're zero sum, is uncertain, and hard. Look at the debates here for example.

So people default to what they already generally know.

They know that society is very competitive. The job market is very competitive. The mating market is very competitive. Zero sum games are everywhere.

So it's no wonder they have this cognitive bias.

It's not just that.

Zero sum let's you shift blame for your own failures. You can say someone else took it from you (nefariously).

When the game is positive sum, the cause of failure must be internal. You just couldn't do it and there's nobody to blame but you. A lot of people can't handle this.

Entire philosophies and like outlooks are driven by this. The external locus of control.

I disagree that a positive sum game implies an internal cause of failure. Easiest example is inflation. You can be gaining positive ground, but not quickly enough to outrun the entity outside of your control who can wipe out your assets unless you stay ahead of the curve.

This is true for many people who didn’t invest in the right capital such as certain real estate, equities, or intellectual property, as efficiency and automation gains means less of the labor is needed.

One can claim it’s an internal failure to not invest in the right things, but it’s not reasonable to expect everyone to have that kind of foresight.

None of those markets are really zero-sum. People value different things in all of those markets (jobs etc). Zero-sum is an edge case.

Interesting answer.

The people aiming for a certain position or role mostly care about similar things though.

So don't they play a zero sum game ?

The most effective person gets hired into a role. The firm performs well, moves more product, lowers prices for customers, sends larger orders to its suppliers, invests some surplus in R&D, grows its payroll, generates return for shareholders who then invest their gains in other enterprises, etc. Or an ineffective person is hired and the opposite happens.

https://en.m.wikipedia.org/wiki/Lump_of_labour_fallacy

If you had two job offers, one salaried at $100,000 and one at $100,001, I assume you would pick $100,001 with zero consideration for any other factors?

It assumes there is only one fixed org chart and role. This isn’t true everywhere under all circumstances, but my personal experience in tech has been that companies make space for talented people who have a real impact. If you’re fighting over a title, you’ll stagnate. If you’re growing the business and building useful things roles will invent themselves. Especially in the case of competing with an individual over a role, making each other look good is far more valuable than being competitors.

In dating market, attractive people get most of the attention [1], thus it would be safe to assume that attractiveness is highly valued by the majority and they compete with each other, knowingly or not.

[1] https://web.archive.org/web/20170127222943/https://blog.okcu...

Attractiveness is not a one-dimensional scale, it is a two-party phenomena.

The zero-sum here depends on who is who. The competition is zero-sum, but the relationship is not.

If the market is to exchange affection, it's positive-sum. If the market is a status good, it's zero-sum.

Isn't it strange though? One of the defining characteristics of the most dominant species on the planet is their capacity for sophisticated cooperation and planning.

Sophisticated cooperation at the scale of the tribe.

On the other hand, the market system is a system of massive economic cooperation, and very sucsesful in many important ways.

But it's not a great fit for human psychology.

> Sophisticated cooperation at the scale of the tribe.

People claim this but it seems to ignore evidence that invalidates all but the least informative definitions of "tribe."

> On the other hand, the market system is a system of massive economic cooperation, and very sucsesful in many important ways.

I think "successful" is doing a lot of heavy lifting in this sentence.

> I think "successful" is doing a lot of heavy lifting in this sentence.

How?

We sort of live in a finite universe in terms of matter and energy right? Conservation laws seem to imply that. So at a large enough scale life would have to be zero sum. I guess what people may actually be arguing about is at what scale the finite aspects of the universe actually matter?

On an anecdotal level, while thinking that everything is zero sum all the time probably isn't good, I find that the majority of the people I interact find it very difficult to imagine that anything is "zero sum." Since they associate "zero sum" with mean things like harsh competition. It seems like that's its own sort of "bias."

> people tend to assume that if a product is superior in one dimension then it must be inferior in other dimensions.

Assuming price is one of the dimensions, this is generally a true statement. Otherwise we'd have a bunch of best-in-class products that are cheaper than inferior competitors.

This can occur for products sold at massive scale and with large tooling costs. This dynamic enables the producers of premium products to manufacture at lower cost than smaller-scale competitors. But usually they don't set their prices lower--they just enjoy higher profits.

Would this be dissimilar to undercutting a competitor? For example Ryzen 3rd gen chips seem to out perform, and undercut the price, of Intel chips with a similar feature set. Maybe brand is a dimension?

Brand is certainly a dimension in some cases (see: Apple products) but it's inconsistent per consumer.

Sometimes this happens for a period of time, but in the medium- or long-run, the manufacturer of the superior product will raise prices. Undercutting is just a way of getting attention in the short-term.

The other alternative is that the inferior and more expensive version simply stops being produced.

Wait until tomorrow until you say that, the third party benchmarks aren't out yet. ;)

In a way this is a restatement of the efficient-market hypothesis. If the market is efficient, then a product that is inferior in most or all dimensions will be forced out of the market by one that is superior. Therefore, if you believe in efficient markets and observe that both products are still offered for sale, it's a reasonable inference that the superior product must be inferior in some way that you haven't yet observed.

Usually where this heuristic fails is on the margins, when markets are not efficient and you're observing a change in technology or production techniques. In this case, the correct inference isn't that the product is inferior in some way you haven't observed, it's that the superior product will eventually end up winning and taking over the marketplace.

I think your argument somewhat presumes that we all agree on some platonic ideal of a product.

Let's pick restaurants as as product: I have some favourite restaurants that for me beat most other restaurants on multiple dimensions (taste, freshness, service, location, price). And there are very popular restaurants I rate poorly on multiple dimensions.

I know other products that I think are both cheaper and better than the competitors, but I can't think of any products where I have many many purchases within the sample space of different products.

A nit pick: you're describing something more like perfectly competitive markets through to monopolistic competition.

The efficient market hypothesis is that the prices offered for purchase and sale factor in all relevant information about the thing being traded. It's less about whether that good is "better" or "worse" than a substitute, more about what information is revealed by prices.

When it comes to products, marketing is also one of those dimensions, and can easily swamp the others. It's a good assumption that if you hold price steady, the more marketing, the worse the product. We don't see this because it is often canceled out by economies of scale, which of course are a result of size, and the larger the relative size, the higher amount of marketing as compared to other brands.

At the same production scale, you should expect the most marketed product to be the worst.

It doesn't help that size is partially a result of marketing. At the same production scale, the most marketed product may not be staying at that scale as long (assuming the marketing is being done somewhat efficiently, which perhaps isn't necessarily a good assumption).

There's a school of thought that expensive advertising is actually "signalling" higher quality to consumers. Why spend so much on something substantially less appealing than available substitutes?

Doesn't open source software kind of throw a spanner in this idea? In quite a few fields, the best option could be released for free and made by a team of volunteers, and if so, it would logically be better than its paid alternatives in pretty much every possible way.

There are important exceptions, though. It's well demonstrated that wine price influence taste perception, for example [1], [2], [3]. And many of us have seen tech consultants charge prices all out of line with value delivered.

[1] https://www.caltech.edu/about/news/wine-study-shows-price-in... [2] https://www.sciencedaily.com/releases/2017/08/170814092949.h... [3] http://www.openculture.com/2017/11/expensive-wine-is-for-dup...

> Assuming price is one of the dimensions, this is generally a true statement. Otherwise we'd have a bunch of best-in-class products that are cheaper than inferior competitors.

You say this like it's an absurd condition but we can observe exactly this condition all the time, with new manufacturing techniques and labor practices creating better products for less resources all the time.

One place I love to observe this phenomenon is cars, where often even new inexpensive cars are superior in many dimensions to older luxury cars (including passenger amenities). But brand attachment and carefully seeded misleading advertising allows luxury vendors to keep their prices high despite a slower product development cycle.

This will be controversial, but this is true everytime there is a pitchfork-inducing "the rich got richer in 20XX" thread. But it's not that the rich stole from the poor in order to become richer (though undoubtedly people will argue this).

If I stick a million dollars in an index fund and passively get richer, am I stealing from the poor? Wealth is not zero sum, yet we seem to treat it like it is (in order for poor people to become wealthy we need to take from the wealthy)

Not that I necessarily agree with them, but some people would say that your index fund is stealing from the poor in a sense, because corporate profits (distributed to you, the shareholder, as dividends) are derived from exploiting the working class, when they could be raising wages instead.

This is obviously not the entire story, because the economy certainly has grown historically and continues to grow, and that growth comes from somewhere. But it is plausible that some amount of wealth accumulation does come at the detriment of the poor.

Well labour prices (for whatever the industry is) is driven by market forces. The Salary / Rate has to match the market expectations.

If the market rate is artificially inflated (minimum hourly wage) then companies will find a way to automate those jobs away. I am sure people will say that this would have happened anyway with certain unskilled labour jobs but you could argue that this only further incentivises them.

I would argue that the UK fast food chains and supermarkets are a good case study to illustrate this. In the UK most of the cashier staff are slowly being removed. Now they normally have 6 - 10 checkouts that are automated and have the customer scan their own items. Tesco (that where I normally go) instead of having 10 checkout staff you can buy 10 machines that are managed by one or two people at most. All the machines in the major supermarkets are using the same vendor for their machines and the software appears to the same for each supermarket but skinned, with the only exception being the german supermarkets.

Similarly at the other end of the scale in the UK. A C# .NET + MVC + JS with some SQL Server experience contract rate is about £350-400 a day. In London because developers expect higher rates (and the higher cost of living pushed the rate up by about £100-200 a day.

Raising wages are not the only way to make the poor relatively richer. There is also all kinds of taxation and welfare programs.

>Well labour prices (for whatever the industry is) is driven by market forces. [...] If the market rate is artificially inflated [...]

First, are all markets just markets?

Second, what if the market rate is artificially depressed - what if it is systemically artificially depressed?

Do market expectations align with an appropriate distribution of wealth to labour under conditions where the first is false or the second is true?

> First, are all markets just markets?

I am not sure what you mean by this.

> Second, what if the market rate is artificially depressed - what if it is systemically artificially depressed?

Regarding artificial depression. Well this is where we get into some somewhat controversial territory.

Some will argue that immigration artificially depresses wages as you can artificially increase the supply of labour and thus drive down the prices. Those that are conspiratorially minded would claim that large companies would make efforts to lobby Political parties to have a more open doors policy on immigration.

Now there is some evidence of the market rate being depressed due to immigration e.g. construction wages have increased in the UK after the "Leave Vote".

https://www.theguardian.com/business/2019/jun/24/constructio...

But I remember reading about a Bank of England report which is somewhat recent and this is the published paper:

https://www.bankofengland.co.uk/working-paper/2015/the-impac...

However the stats themselves go over my head. I have google'd around for a simplified explanation (because I don't trust any of the newspapers to be honest as they will each push their own agenda). It appears that the effect on a native workers on minimum wage would have only lost less than a penny per hour due to immigration. A penny per hour is a rounding error for most people.

However that seems to be at Odds at what we have seen recently with construction.

So I don't know what to think tbh and I won't claim to be any definitive authority on the matter.

> Do market expectations align with an appropriate distribution of wealth to labour under conditions where the first is false or the second is true?

Sorry it isn't clear what you are asking me to compare.

I wonder how people can think "we must let the companies oppress us as hard as possible or else they will fuck us entirely" and not think we live in a literal dystopia.

Technically yes, but the key difference is that those index funds are equally available to rich and poor, and the returns are the same for everyone (mostly).

Contrast that with the plethora of wealth-increasing opportunities that are not available without a large initial investment or the connections or power that comes with existing wealth.

Your claim is the flip side to the joke that goes something like, "The law is blind to class: it is equally illegal for a rich man to sleep under a bridge as it is for the poor man."

The point being: a large fraction of the population in the US is living paycheck to paycheck and has no money to spare for investing in an index fund.

And yet many blow at least $3000+ per year on worthless consumables like cigarettes and lotto (at least my pack-a-day neighbors do). $3k per year in an index fund is certainly not insignificant.

>And yet many blow at least $3000+ per year on worthless consumables like cigarettes and lotto

being poor impairs your cognition[1], so it's not surprising that they are wasting money on stuff like that.

[1] random google result: https://www.scientificamerican.com/article/how-poverty-affec...

I'd imagine that the people they studied in Bangladesh in that article are a lot more poor than basically anyone in the US, especially people with $3k to spare on anything.

And if you were to find evidence of poorer people having impaired decision-making skills in the US (and there might be evidence of that), the question becomes, are they as poor as they are because of that poor decision making?

They are technically available to the poor but in practice many people can't afford to tie up their money for long periods.

If they're forced to take their money out of the fund due to their circumstances, then they could actually lose a lot of it (an economic downturn makes both situations more likely to occur at the same time). Whereas someone who is well off only loses money on paper and can afford to hold on to their investment until the economy improves.

In short, index funds are a bad investment unless you're well off enough that you won't need the money invested. At least not for a long time.

Thanks, that is a great counterpoint. I'll reconsider my position.

It's more that people are starting to recognize that we're more poor than a decade ago in terms of buying power AND unemployment is closer to 25% than some ludicrous politicized value.

When you shove apes deeper into the pits of the dominance hierarchies and feed them garbage, you're going to have resentment.

Along those lines, capital has been concentrating ever more into a smaller slice of the population while cutting the value of the humble pile of capital the average US citizen has. I don't believe in wealth as a zero sum game but I do believe in hyper-predator agents steering the system for more ill-begotten gains. Which becomes a zero sum game...

PG often tries to make this point.

The Pie Fallacy

A surprising number of people retain from childhood the idea that there is a fixed amount of wealth in the world.

http://paulgraham.com/wealth.html

The question is not whether someone steals or doesn't steal from the poor. The crucial questions are whether the divide between rich and poor increases or not and whether the actual buying power of the poor decreases or not. If the lower income classes have less and less, then something has gone wrong and needs to be fixed. That's currently the case in most Western industrialized nations.

One way to fix the problem, in one way or another, is by some form of resource distribution. If someone has got other recipes that could reasonably be expected to work, then they should put them on the table. So far, the "trickle down to the masses" methods favored by the ultra rich have not proven to be very successful and people cannot be bullshitted forever (or who knows, maybe they can, we'll see in the future).

I think money is one of the few things that really does approach a zero sum game. If you have more money, even if you printed it yourself, it deflates the value of everyone else's money when you spend it.

What is not zero sum are the actual goods bought with the money, in cases where cooperation could result in better productivity and more actual goods produced.

I don't that is neccesarily a zero-sum mentality. It's an observation on how policy and the economy as a whole did NOT benefit the poorer class as much as it did the rich class. The rich making more money should not translate to the poor making less money but increase in economic quality of life should more proportional between rich and poor.

The rich making a trillion dollars does not translate into the poor losing a trillion dollars (zero sum). But the wealth of the rich increasing by 300% and the wealth of the poor remaining the same indicates the economic policies and conditions are not benefiting the poor as much as they benefit the rich.

Often,the argument is that policies are not fairly applied to allow the poor to maintain an increasingly better economic living conditions.

It’s a common fallacy to believe that wealth is zero sum. It’s also a common fallacy to believe that, since it’s not zero sum, gains by one group are uncorrelated to losses by another.

If the rich got richer, does that mean they took from the poor? No. But it also doesn’t mean they didn’t. As usual, you have to look at the specifics.

The world does have limited resources and capacity for economic growth. In your index fund example, a substantial chunk of those are being allocated to someone who already has plenty, and it would be a lot more useful if it went to someone who had less. That’s not exactly taking from the poor, but it’s not exactly not.

It occurs to me that there’s a simpler way to put it: wealth creation is not a zero sum game, but wealth allocation is.

I don't think this is a very good way of putting it. if wealth creation is disconnected from allocation, the creation part isn't really a "game" at all; there's no reward function. the second part, that wealth allocation is zero sum is literally true, but only in the tautological sense that there's no way to divide a pie such that the pieces add up to more than one pie. it's not very useful to assume you already have a pie and then decide how to divide it up when the way you divide it affects the size and kind of pie you have to begin with.

I think it's useful because it gets you thinking about which category various things fall into, and how they're connected.

For example, business growth is usually wealth creation. We shouldn't think badly of successful businesses (unless they're taking advantage of externalities or similar). However, pay is wealth allocation. Pay going to executives versus workers versus charity versus taxes is a zero-sum game, but we're OK (for certain values of "we") with executives getting a huge slice of that pie because we're pretty sure it helps drive the wealth creation side of things by providing incentives.

It gets you thinking about what incentives you need, what sort of behavior they drive, what sort of behavior we want to drive, etc.

Far more useful and interesting than the typical story of "wealth is not a zero-sum game, rich people don't take anything away from poor people, The End."

I mean, it's hard to say for sure that on the large scale allocating extra money to poor people would be any more efficient in the long run. Rich people buy things, paying a lot of paychecks. They are also funding a lot of innovations and putting in investments. Things that improve more lives over time than just giving random people lump-sums. Furthermore the question is also: who gets to decide where that money goes? A sibling comment mentions money allocation. Allocation via distributed emergent system is what we have now. To try to allocate more "efficiently" you need someone to manage it. Who should do that job? Sounds like a great/horrible one.

> Wealth is not zero sum

But what relative wealth buys - a safer, more comfortable position in society - definitely is.

I don't think that is quite right. Consider the difference between a society with extremely uneven wealth distribution, such that only a tiny percentage felt safe an comfortable. It's easy to imagine a more even wealth distribution changing that for a large percentage of people.

There is a tautological zero-sum ordering in relative wealth, but it's not clear that correlates to anything meaningful to vast majority of people.

A higher level of relative wealth unlocks an advantage in the allocation of scarce resources like land and housing within a particular locale, which is meaningful to lots of people.

The point is it doesn’t for many people at all if the distribution is uneven enough, I.e. distribution matters.

I’m not saying it’s not important, I’m saying it’s not obviously zero sum. If it was, any marginal change for one person would have impact for another. With an uneven enough distribution I could lose relative in an amount that actually has no impact for me, but could have utility going to you, say. Bear in mind the criteria was “safe and comfortable”, not “able to outbid you on a property”

I don't think it's so clear cut. Maybe relative poverty can only be shifted around, but if you reduce absolute poverty that seems pretty clearly positive-sum.

Think about Trump tax-cuts, who benefited most, the big corporations. That meant they made more profit which meant their stock price went up. Which meant people who owned stock got richer, and if you owned a lot of stock much richer. Whereas poor people who can't afford to put money aside for stock-investing did not get any less poor and they did not get tax-breaks or government support-programs either. They didn't get better infra-structure so travel for them would be cheaper and food fresher etc.

Point is it does not matter if rich got richer. What matters is the tax-system that (at least under Trump) favors the rich and produces growing inequality.

What people take issue with is not necessarily one individual's action, but the system which allows rich people to get richer without benefiting the middle/working class. Cost of education, housing and health care keeps rising in America but wages didn't.

I would say it's a combination of zero sum and non-zero sum. If we can allocate resources better, both the poor and the rich can get richer by producing more. But at the same time how profits are distributed is a zero sum game.

It's not that clear that the rich in general don't play a zero sum game.

But anyways, that's not how people build their model of fairness.

They look at their boss, making much money,often of their good work, while giving them the bare minimum he could get away with.

They look at bezos treating employees like cattle, and not paying taxes.

They look at their landlord, "killing them" with rent. And let's not talk about buying a house.

They look at rich guys, getting many women easily. While they struggle.

Should they really feel the rich don't play a zero sum game?

Say the top 1% increase their proportion of wealth from 20% to 40% of the money supply. Since there's only a finite amount of stuff to buy (productivity), this means the rich can also buy a proportionally bigger amount of stuff. Now, yes, this money gets in the hands of whoever is selling but in our current world this is increasingly also the rich. They're slowly buying up all real estate, companies, securities etc. capturing an ever increasing slice of economic surplus. This capture is exactly how the proportion of their wealth gets bigger and bigger, while wages are under pressure and haven't increased at all.

It's not entirely zero sum, some investments increase productivity and thus create actual wealth. Unfortunately investment in stocks and real estate don't increase productivity at all while rent-seeking only directs an ever increasing proportion of available wealth towards rich people.

> Say the top 1% increase their proportion of wealth from 20% to 40% of the money supply. Since there's only a finite amount of stuff to buy (productivity), this means the rich can also buy a proportionally bigger amount of stuff.

yes, the money supply and real productivity are disconnected from each other, but it's hard to imagine such a huge change in control of the money supply over a period where real productivity is held constant.

> It's not entirely zero sum, some investments increase productivity and thus create actual wealth. Unfortunately investment in stocks and real estate don't increase productivity at all while rent-seeking only directs an ever increasing proportion of available wealth towards rich people.

if there are some investments that increase productivity, but they aren't stocks or real estate, what investments do increase productivity?

I just meant the 20% and 40% as an illustration how increased wealth can make others lose out if productivity doesn't increase proportionally, I wouldn't read too much into it.

Starting/growing a company is the obvious investment that increases productivity (pg isn't wrong). But selling your labor also increases it on a smaller scale, as long as you don't replace someone else. Actually literally anything that creates anything increases productivity. Even creating bitcoins in a sense does (but trading them doesn't)... until they crash.

But real estate and stocks only move ownership from one person to another. They don't create anything. Even issuing new stock only moves ownership.

The subtext of most "rich got richer" articles, is that there's a missed opportunity to make everyone richer by raising taxes on the wealthy, and lowering taxes on everyone else. The rich would still get richer, but at least everyone else will get to share in the spoils as well.

"People sometimes view gender hierarchies in the workplace as being zero-sum, which can cause them to be more opposed to gender-fair policies."

Can someone explain why this isnt zero sum? If the hierarchy moves from being women at the bottom, men at the top to a fair mix, the 'gains' that women make are balanced out by 'losses' for the men. There isn't extra power/prestige/influence introduced to the system by being gender fair.

To clarify, I'm pro equal opportunities, this isn't a sexist rant.

You can still have a hierarchy and the sum of the individuals within that hierarchy does not need to add to zero. It can definitely be positive.

There's many joking examples about governments/lawyers/insert hated group making tasks more difficult or harder. This would be a negative value person and potentially a negative sum hierarchy.

Conversely we can see groups of people working together and forming coalitions that have better payoffs than what the individual members could achieve on their own (like a union coming together and fighting for workers rights. Which can also lead to a more productive business that profits more, thus meaning the boss also profits).

Tldr: Just because someone has a positive worth doesn't mean someone has a negative worth.

That's just the benefit of working as a group though.

Bob, Bill, Jill and Joan are already working as a group when Bob and Bill are the bosses. If we make Bill and Jill the bosses we don't inherently gain anything from that. Yes Jill and Joan might work better because they feel appreciated, equally though Bill and Bob could work worse because they've lost something. Hell Joan could still be annoyed because she didn't get the bosses job.

A hierarchy is a group structure. You could even call this a coalition game.

We can also say that everyone provides a positive value to the group. We can also say that certain people in certain positions provide more value to a coalition. None of this is zero sum. Someone being placed in a certain position does not require value being taken from elsewhere. This is not required in a hierarchical job structure.

A zero sum game is one in which where one player gains value that results in another player losing value. Coalition-al games are games where members form groups.

"A zero sum game is one in which where one player gains value that results in another player losing value"

Yes that's what I'm contending. There can only be one boss, one deputy boss, one assistant deputy boss.

Your point about putting the right person in the right role is a fair point, but its from an organisational POV, not from an individual POV. If I'm the deputy manager, and I get demoted because Tina is a better fit, I have lost, and Tina has gained by the same amount. For Tina and I, it is a zero sum game. I am not misinterpreting that situation as a zero sum game, because for me it is a zero sum game.

I understand then. We're talking about two different games. (I believe) You're talking about the game of obtaining positions. Yes, those games are "mostly" zero sum.

I am talking about a game which describes how well off everyone in the structure is. This is part of why I say "mostly" above, because if the structure is functioning efficiently it can expand and new allocations can be made, but I'd agree that in that instance it is again a zero sum for obtaining those positions (but now with more allocations than the previous game).

Men making games for men doesn't prevent women from making games for women, but somehow people always assume that the incumbents must adapt to serve the entire market. Why don't people see this as a great opportunity for women to carve out their own place in the industry? Literature already works like this, we have erotic romance novels with explicit descriptions of men's bodies catering to women and we have action novels with explicit description of women's bodies catering to men.

Men absolutely losing their minds and filling women game designers' inboxes with death threats because they wanted to make games that didn't cater exclusively to men is a thing that already happened.

Gamers go apeshit over games for other men that they don't like. Or doritos. Gaming is absolutely worst example for this, because the community tend to be volatile over stupidest nonsense.

The game industry is not zero sum, but a game series is.

If a company made a new IP based around nerf guns and cell shaded graphics then nobody would complain. However if the next call of duty changed all weapons to nerf guns and used cell shaded graphics people would go ape-shit on it because it killed their beloved series. If the switch to nerf guns came as a result from gun-ban activists then people would send death threats to said gun-ban activists for killing their beloved series. This behavior is stupid and insane, yes, but it isn't as random or unreasonable as many think it is.

Every single example of zero sum thinking the author used was of whites and men trying to protect their own interests though zero-sum thinking which I found interesting. The author also seems to ignore that altruistic policies which could garner majority groups indirect benefits are themselves based on zero-sum thinking.

When I hear people justify affirmative action policies and racial and gender quotas some of the most frequent stats I heard bring up is relative income levels, relative employment levels, relative everything. Essentially the argument is based around the idea that "majorities' succeeding must have come at the expense of other groups. Even in say... a field like computing in America which is an economic juggernaut that popped up from nowhere which funnels money into the country... the very fact that more White/Asian/Indian men have gotten more jobs than other groups is framed as a crime against those other groups when this is not obvious. Specific needless discrimination and bias is brought up to bring home an argument that majority groups have been playing a nepotistic zero-sum game to their benefit and others and the greater good of societies detriment by keeping talented people with diverse perspectives down. Which isn't an obviously wrong argument yet the solutions on how to fight against this issue like affirmative action are fundamentally couched in zero-sum thinking. People who oppose it do not have zero-sum bias although they are arguably bias towards selfishness. Those are not the same thing.

I don't believe the author made his argument very well. He's confusing zero-sum bias with other types of bias. Singling out white men in all his examples also makes him come off as acting as if it's one group which has the problem which is unlikely to persuade anybody that it's personally wrong for them to engage in zero-sum bias.

P.S. Is zero-sum thinking truly irrational with the future repercussions of population growth and global warming? Time will tell.

This article just kicked me off into a one hour tangent thinking about voting reform activism and my frustration with staunch ordinal voting advocates.

I've found that a lot of ordinal voting system advocates seem to feel that in order for a voting system to work well, it must impose a total order on peoples' preferences. Although they might say that people's preferences are naturally totally ordered, and that it wouldn't be an imposition at all. For me, ordinal systems are destroying information about equal openness to multiple choices. They are filtering the nuances of my preferences through a strict and destructive hierarchy. All just to distill these hypothetical "favorites" that I don't actually have, but which ordinal voting system advocates seem to feel are real anyway.

But I just don't believe that. It's like a whole different worldview. I believe that this sort of bias is at play in that broken, age old gap between ordinal and cardinal voting system advocates.

I wish some funny people would get together and do skits exposing the quirks of different voting systems by playing them out in an everyday, relatable situations e.g. a group of people choosing what restaurant to go to.

I can just imagine a Rob Richie character enforcing that everyone must have a strictly ranked preference between pizza and Thai food. No you are not allowed to be open to both. You must declare which is your ultimate favorite of the two. Even if it means alienating our lactose intolerant friend. They'll be fine since there's salad at the pizza place.

The textbook example of zero-sum thinking is how most people (specially those involved in politics) talk about imports and exports.

All trade is a victim of this.

In reality, trade always creates value, and you can argue that all wealth in the world is created from trade, most of it interpersonal.

But people still feel instinctually that each transaction has a winner and a loser.

That'll likely depend on the definitions of trade and winning/losing.

If you're starving and I'm the only one around and I sell you a loaf of bread for a million dollars, did we both win? Sure, you'll live another week, but I sold you a bread that you'd usually pay a few bucks for and got a million in return.

If I'm paying the mafia for protection, do we both win? Sure, my restaurant doesn't burn down, but if the mafia didn't exist, it wouldn't burn down either.

What about forced trades without perceived value, like a mandatory membership in organizations whose services you don't care for? What do you gain, besides not being thrown into jail?

It certainly does depend on the definitions.

The unstated assumption is voluntary trades in a system of private property rights. Under those conditions, neither side will agree to the trade unless they benefit from it, so value is created for both sides.

So the mafia protection fee is a robbery, not a trade. The mandatory membership probably too.

The bread loaf is a trade, and both people undeniably profit.

Emotionally, it feels "exploitative", but if you think about it, things are less clear. In reality, people stock up food to be prepared to sell it during famines in order to make profits. But this is often made illegal as "profiteering", and as a result no one stock up food, and more people die when the famine comes.

Are you including "daytrading"/algorithmical short term trading when you mean trading creates value?

I do. Though admittedly it's harder to see it there :)

If I ran a stock exchange, I'd look into changing the trading system so trades just happened on even seconds or something, so all this deadweight spending of billions on nanosecond trading advantages could end.

But sometimes imports and exports do have 'winners' and 'losers'. For example, there are well documented cases of 'China shock'[0].

Even if you might posit an ecomony-level gain, distributional effects means many may lose. By itself, saying 'not zero-sum' is not an answer for those policy issues but a slogan.

[0] http://chinashock.info/

I would say it's a natural thing: our biases are mainly a creation of our subconscious, multigenerational experience starting from prehistoric times, our instincts. And before industrial era and before long-range maritime trade started, world has been pretty much a zero-sum place, so perceiving everything as zero-sum is "natural" to us.

Come to think about it, there must be a class of businesses based on this bias, it must be one of the hardest for people to overcome (just as it is hard to overcome lure of sexualized ads: that too, is an instinct, requiring too much conscious power to reject, especially when seeing it casually).

People are also dumb.

One thing that grinds my gears is how the article is shoehorning all these examples of zero-sum bias into a precisely zero-sum situation. It doesn't actually have to be zero-sum for that "bias" to become rational. For example, prisoner's dilemma (which would actually better describe most of the situations put forth in the article).

A common one on HN is cryptocurrency energy use. If crypto didn't exist that energy would have been "wasted" on something else.

There's a huge hole in the ground a 100 or so miles from me and several trains a day rolling up the valley that would disagree with you.

It seems that the authors do not understand the 'zero-sum' definition and apply it to various situations where it simply does not apply.

To pick for example the first article, the only one linking to the full article and not just an extract:

Australians probably do not believe that there's a fixed sum of humans in the world and every new Iraqi means one less Australian. The demand to pick a nationality might be a bias (though plenty of states do not allow dual-citizenship), but it's not a 'zero sum' bias as commonly understood - nobody believes that there's an 'Australia-Iraq' game where only one side may win.

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