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In a negative-sum game the overall loss is greater than the overall gain, but a zero-sum game can be seen as a ______ situation.

User Elharony
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Final answer:

A zero-sum game is seen as a neutral situation, where one party's gain is exactly balanced by another's loss. Behavioral economics, however, reveals that humans experience loss aversion, where losses typically have a greater emotional impact than gains.

Step-by-step explanation:

In a negative-sum game, the overall loss is greater than the overall gain, but a zero-sum game can be seen as a neutral situation. This concept aligns with the field of behavioral economics, which deviates from traditional economic theory by taking into account how humans emotionally perceive gains and losses. According to behavioral economists like Daniel Kahneman and Amos Tversky, individuals experience loss aversion, where the pain of a loss is felt more profoundly than the joy of a gain. For example, losing $10 and then finding $10 should leave you financially neutral, yet many people will still feel a negative emotion due to their focus on the loss.

User Andrewjamesbowen
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