A zero-sum game is a transaction between two or more parties, whereby one party's gain is equal to the other party's loss. The net result is a zero change in overall wealth. While zero-sum games are most commonly associated with financial markets and trading, they can also be found in everyday life.

In competitive games like chess, the two players are playing a zero-sum game. Both are competing to make the best moves to gain the advantage while taking away moves from the other player. If one wins, the other loses, and there is no net change in total wealth. This is known as a zero-sum game because the sum of all wins and losses is zero.

Zero-sum games are used in many areas of life, but one of the most common is political negotiations. In international relations, where negotiation usually involves two or more states, the result is usually a win-lose situation. For example, a negotiation to reduce greenhouse gas emissions could have different outcomes for the parties involved. One country may win, while the other may lose, but the total outcome is zero.

In the business world, zero-sum games are also common. Companies often find themselves in a situation where, if one business wins, another will lose. In many cases, this can be beneficial, as competitors may be forced to innovate and find better solutions.

Zero-sum games are also found in game theory, where they’re used to model decision-making between two or more parties. Using such models, economists and game theorists can determine how two parties will react to different scenarios, and how their decisions will impact each other.

Overall, zero-sum games are a useful tool to help understand the dynamics of financial markets, business negotiations and decision making. In a world of limited resources, zero-sum games can be used to ensure that the gains of one party don’t come at the expense of another.