The Zero-Sum Bias: When People Think that Everything is a Competition

Zero-Sum Bias

 

The zero-sum bias is a cognitive bias that causes people to mistakenly view certain situations as being zero-sum, meaning that they incorrectly believe that one party’s gains are directly balanced by other parties’ losses. For example, the zero-sum bias can cause people to think that there is competition for a resource that they feel is limited, in situations where the resource in question is actually unlimited and freely available.

This bias can shape people’s thinking and behavior in a variety of situations, both on an individual scale as well as on a societal one, so it’s important to understand it. As such, in the following article you will learn more about the zero-sum bias, understand why people experience it, and see what you can do in order to reduce its influence.

 

Understanding the zero-sum bias

Because the zero-sum bias causes people to believe that for one person to gain something someone else must lose something equivalent, this bias encourages belief in an antagonistic nature of social relationships. It can generally be said to affect people on two scales:

  • Individual scale. This means that the zero-sum bias causes people to mistakenly assume that there is intra-group competition for a certain resource, between them and other members of a certain social group.
  • Group scale. This means that the zero-sum bias causes people to mistakenly assume that there is inter-group competition for a certain resource, between their group and other groups.

It’s important to keep in mind that there are, of course, situations that are indeed zero-sum, meaning that any gains by one party are directly balanced by the losses of other parties. However, the issue with the zero-sum bias is that it causes people to believe that situations are zero-sum, when that’s not actually the case.

Note: the zero-sum bias is sometimes referred to as the zero-sum heuristic or zero-sum intuition. In addition, note that the zero-sum bias is a psychological phenomenon, while the more basic concept of zero-sum games is based on economics and game theory.

 

Examples of the zero-sum bias

There are many situations and ways in which people display the zero-sum bias.

For example, consumers often have a zero-sum approach when they assess different products, since people tend to assume that if a product is superior in one dimension then it must be inferior in other dimensions. This means, for instance, that people might assume that if a phone is durable then it will have poor battery life performance, or they might assume that if a product is designated as environmentally friendly then it will have poor durability.

The zero-sum bias can also affect how people view trades and exchanges, in situations where it causes them to mistakenly assume that there must always be one person who benefits more from making a trade, even in situations where both parties benefit to an equal degree but in different ways. This means, for instance, that people might assume that when someone sells someone else a service or a product, either the seller or the buyer must be losing as a result of the exchange.

In addition, the zero-sum bias can also affect people’s thinking on a larger, societal scale. For example:

 

Why people experience the zero-sum bias

There are several cognitive mechanisms that cause people to experience the zero-sum bias:

  • Mistaken belief in limited resources. In many cases, people intuitively assume that a certain resource is more limited than is actually the case. For example, people often believe the lump of labor fallacy, which is the idea that there is a fixed amount of labor to be distributed within an economy, so that the entry of new people into the job market comes at the direct expense of others.
  • Mistaken belief in trade-off consistency. In situations where people assess the attractiveness of different options in a given choice set, they often display compensatory inferences when they assume that there must be a tradeoff between the various advantages and disadvantages of each option, so that the options must be balanced overall. This can lead people to discount the advantages of superior options or to ignore the disadvantages of inferior options, since they assume that they must be balanced by some unseen disadvantages (in the case of discounted advantages) or by unseen advantages (in the case of ignored disadvantages).
  • Common correlations. Certain types of tradeoffs or problems tend to be frequently correlated with each other, which can cause people to assume that they exist even in situations where they don’t. For example, this can cause people to assume that superior performance in an electric device entails that the device must have poor battery life, because the two traits are often correlated.
  • Previous experience. In some cases, people mistakenly assume that a certain situation is zero-sum because they were exposed to similar situations in the past that were in fact zero-sum. Accordingly, people who live in situations where resources are more scarce tend to display a greater degree of zero-sum beliefs.

When it comes to interactions between people, a failure to see other people’s perspective can also cause people to display the zero-sum bias in various situations. For example, when people trade something, each of them might view the exchange as being beneficial for different reasons. Failing to see that different people might have different reasons for taking action can lead to the incorrect assumption that they must both be motivated by the exact same factors, which would make it much more likely that the exchange is zero-sum in nature.

Finally, note that people’s tendency to display zero-sum thinking has been proposed to be an evolutionary adaptation. This is because, for the majority of our history, most resources were highly limited, and so this sort of thinking could have encouraged people to compete for them when necessary.

Note: because the zero-sum bias is so widespread, this form of thinking is considered to be a notable feature of folk economics, which is the intuitive view of economics that is held by people who have relatively little formal knowledge on the topic.

 

How to avoid the zero-sum bias

There are several things you can do in order to reduce the likelihood that you will be influenced by the zero-sum bias.

The first step to mitigating this bias is to identify situations where you might experience it. This includes cases where you believe that a certain situation is zero-sum, meaning that the gains of any party in the scenario are directly balanced by the losses of the other parties involved, or that an increase in one domain must come at the expense of a decrease in another.

Once you identify such situations, try to assess them and determine whether they are truly zero-sum or not. How you do this will depend on the situation, and on the reasons why you believe that it is zero-sum.

For example, if you want to buy a new laptop and find yourself thinking that it’s impossible for one option to be better both in terms of price and in terms of quality, ask yourself why you think that this is the case, and try to use additional information, such as user reviews, in order to determine whether or not your initial intuition was justified.

Similarly, if someone is offering you a trade that makes you suspicious about their motivations, try to see their reasons for wanting to go through with the trade, and remember that those reasons might be different than yours, which could help you see that the trade can be beneficial for both of you simultaneously.

Finally, you can also try using various general debiasing techniques, such as slowing down your reasoning process, in order to help yourself overcome your initial intuitive assumption that situations that you encounter are zero-sum. This can be beneficial both when reducing the zero-sum bias that you experience, as well as when reducing the bias that other people display.

 

Summary and conclusions

  • The zero-sum bias is a cognitive bias that causes people to mistakenly view certain situations as being zero-sum, meaning that they incorrectly believe that one party’s gains are directly balanced by other parties’ losses.
  • For example, the zero-sum bias can cause people to think that there is competition for a limited resource, in situations where the resource in question is actually unlimited and freely available.
  • In practice, the zero-sum bias increases people’s belief in the antagonistic nature of social relationships, and can cause them to think, for example, that reduced discrimination against one group will always come at the expense of increased discrimination against other groups.
  • People experience the zero-sum bias for a variety of reasons, including a mistaken assumption that certain resources are limited, a mistaken belief in trade-off consistency, an overreliance on common correlations, an overreliance on previous experiences, and an inability to see other people’s perspective.
  • To reduce the degree to which you experience the zero-sum bias, you need to identify cases where you assume that a certain situation is zero-sum, and then assess the situation rationally in order to identify whether it is actually zero-sum, which you can do, for example, by asking yourself whether a resource under consideration is truly limited.