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Chapter 26: Q. 6 - Problems (page 598)

Characterize each of the following as a positive-sum game, a zero-sum game, or a negative-sum game.

a. You play a card game in your dorm room with three other students. Each player brings \(5to the game to bet on the outcome, winner take all.

b. Two nations exchange goods in a mutually beneficial transaction.

c. A thousand people buy \)1 lottery tickets with a single payoff of $800.

Short Answer

Expert verified

(a) In a card game, the winner receives the entire amount bet. As a result, the game is one-sided.

(b) The business of exchanging goods benefits two countries as a positive-sum game.

(c) The $3800 lottery prize would be won by only one person; everyone else would lose.

Step by step solution

01

Given information 

The sentences are as follows: (a).

In your dorm room, play a card game.

02

Explanation (a).

(a)

The winner of a card game receives the entire amount bet. At the same time, the contributions of other students will be forfeited. As a result, the game is a zero-sum one.

03

Given information 

The sentences are as follows: (b).

In a mutually beneficial transaction, two countries exchange goods.

04

Explanation (b)

(b)

The business of exchanging goods benefits two countries. Both countries benefit in the business world. As a result, it could be considered a positive-sum game.

05

Given information

The given sentences are : (c)

A thousand people buy $1 lottery tickets

06

Explanation (c)

(c)

This could be regarded as a zero-sum game. Only one person would win the $3800 lottery jackpot; everyone else would lose.

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