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by amelius 3650 days ago
From wikipedia [1]:

> In game theory and economic theory, a zero-sum game is a mathematical representation of a situation in which each participant's gain (or loss) of utility is exactly balanced by the losses (or gains) of the utility of the other participant(s).

Advertisement is (to first approximation) zero-sum in the sense that what you sell, your competitor will not sell. The contribution to society of the advertisement is zero. You can say that you have provided the customer the service of making them aware of the product, but that is only in second approximation, as customers generally do not want this service. Also, they can only spend their money once. Further, ads cost money, so perhaps we can even call it a negative-sum game :)

[1] https://en.wikipedia.org/wiki/Zero-sum_game

2 comments

I don't think advertising for jobs is a zero-sum game, especially if the matching algorithm is good enough to match employers and employees that had no knowledge of each other before. If you are able to reduce those search frictions, you have created value. Several economic professors won the Nobel prize for their work in this area:

http://economix.blogs.nytimes.com/2010/10/11/the-work-behind...

https://en.wikipedia.org/wiki/Search_theory

Well, those Nobel prizes are for a specific theory. In practice, in this case, you see developers looking to get problems solved (or solving problems), and getting distracted to look for another job. So even if you are removing market friction, there's a huge cost in people switching (or even getting distracted all the time). In my opinion, if people are looking for a job, they should go to a job-hunting website (even if it has lower-quality data about them).

Anyway, it would be nice to have the effects properly quantified.

There are many developers looking for a good job. There are many companies having difficulty finding qualified developers.

Our goal is to solve those problems, and it is not a zero-sum game.

> Advertisement is (to first approximation) zero-sum in the sense that what you sell, your competitor will not sell.

No, its not. A major portion of the effort in advertising of most products goes into spreading knowledge and/or perceived need for the product category, not just competing for share of the existing demand.

> The contribution to society of the advertisement is zero.

Even in the purely competitive case, that's only clearly the case in the case where the products are perfect subsitutes with neither cost nor utility differences for the purchaser.