Thursday, September 25, 2008

Win-wins and Zero-Sum Situations

P told me about the complex exchange of toys that he and his friends were working on. He would give one of his characters to J who in turn would give one to M who would then give one to P. The end result: they would all end up happier than before. I told them this was called a win-win situation: an exchange (or transaction) after which all the participants were better off.

I contrasted this with "zero-sum" situations in which what benefited one person hurt another, such as when allocating a fix amount of money. I explained how school grading can sometimes be zero-sum, when done with a curve. Only so many students would get an A, and a given student getting an A meant that some other student would not. Luckly for them, their current grading doesn't seem to be by curve: when they get things right they get As...

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