DISCUSSION BOARD FIVE
Discussion Board Five
Liberty University
Business 620: Global Economic Prospective
June 12, 2014
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DISCUSSION BOARD FIVE2
Discussion Board Five
What is meant by (a) Zero-sum game? (b) Nonzero-sum game? Provide examples in your
discussion.
A zero-sum game is when the success of players of the game is inversely related. In other
words, in order for one player to win, the other players in the game must lose. For example, this
occurs in situations such as board games and card games where there can only be one winning
side (Wright, 2000). Although zero-sum games do not frequently exist in real life situations,
there are some circumstances where this concept can be applied. For example Wright (2000)
describes how this term can be used in economics when equal trade occurs between two
countries. In order to be a zero sum game, “…both countries gain equal advantage by acquiring
something and by giving something up.”
Wright (2000) goes on to describe how the economic example of a zero sum game rarely
occurs. Instead, it usually represents a non-zero sum game, which is when the players’ interests
overlap and one player’s gain isn’t necessarily a loss for another (Ro, 2013). For example,
“Perhaps the country that trades at a disadvantage gains something non-tangible, like the respect
of another nation and better diplomatic relations. As in chess where the loser may profit by his
loss, a nation that takes an economic loss in a trading situation may profit in other ways”
(Wright, 2000). Ro (2013) describes other real life examples of where the non-zero sum game
can be applied such as the stock market, investments, and information exchanges. The term non-
zero sum game effectively illustrates the complexity of game theory and strategic decision
making.
Respond to the charge that immigrants flood the labor market and drive down wages in the
U.S.
DISCUSSION BOARD FIVE3
There is a common perception that immigrants overflow the United States labor market
and decrease wages. Regardless of how widespread this assumption is, it is important to
recognize that numerous studies have been conducted on this topic, and “…economics literature
has found it difficult to document the inverse relation between ages and immigration induced
supply shifts” (Kotkin, 2012).Carter and Sutch (2013) explain how labor flooding assumes a
declining demand curve for labor in a stagnant labor market, and immigration creates an outward
shift in the supply curve, which in turn causes the equilibrium wage to decrease. However Carter
and Sutch (2013) also notably state, “Despite the popular belief that immigrants have a large
adverse impact on wages and employment opportunities of the native-born population, the
literature on the question does not provide much support for this conclusion.”
In contrast to the belief that immigrants damage the workforce, Furchtgott-Roth (2013)
describes how economists found that immigrants have increased economic efficiencies by
reducing labor shortages, because immigrants can provide a diverse educational background that
cannot be gained through the American workforce alone. To validate this judgment, Furchtgott-
Roth notes that founders of dominant United States companies such as Google and Yahoo are
immigrants. In addition (Kotkin, 2012) explains how anti-immigrant groups believe immigrants
will take the jobs of native-born citizens, when realistically immigrants complement rather than
substitute for native-born workers by reducing bottlenecks caused by labor shortages throughout
various skill level areas.
When analyzing the statement, “Immigrants flood the labor market and drive down
wages in the U.S.” it is critical to recognize the lack of proof. In addition, it is also critical to
recognize the benefits immigrants have been proven to provide for economy.
DISCUSSION BOARD FIVE4
References
Carter, S., & Sutch, R. (2013). Labor marketing Flooding: Migrant destination and wage change
during America’s age of mass migration. Social Science Research Council. Retrieved
from http://essays.ssrc.org/acrossborders/wp-content/uploads/2009/08/ch7.pdf
Furchtgott-Roth, D. (2013, Feb). The economic benefits of immigration. Manhattan Institute for
Policy Research. Retrieved from http://www.manhattan-institute.org/html/ib_18.htm
Kotkin, J. (2012, June 26). US desperately needs immigrants and a strategy to get the right ones.
Forbes. Retrieved from http://www.forbes.com/sites/joelkotkin/2012/06/26/u-s-
desperately -needs-immigrants-and-a-strategy-to-get-the-right-ones/
Ro, S. (2013, April 1). ‘Invisible buyers’ are propping up the stock market. Business Insider.
Retrieved from http://www.businessinsider.com/the-stock-market-is-not-a-zero-sum-
game -2013-4
Wright, R. (2000). An excerpt from the introduction and appendix I of Nonzero: The logic of
human destiny. Pantheon Books. Retrieved from http://www.nonzero.org/gam
etheory.htm
