First, Not everything is a commodity with perfect substitutes, arguably most things aren’t. Substitutability goes beyond price.
Secondly, benefits are not necessarily equal or a linear function of cost.
Third, whether a game is zero, positive, or negative sum requires a look at the costs/benefits of the whole transaction. Saying that a buyer gains $1 more if the price goes up is obvious, it that doesn’t necessarily make it zero sum when you look at the overall transaction of a $1 price raise. .
Zero sum implies that price, costs and benefits are equal. I spend $20 on a product that cost you $20 to make, and I get $20 of benefits out of it.
Whereas I buy something for $20 , it cost you $5 to make, and I got benefits of $100 out of it, that’s positive sum, as both the buyer and seller got positive gain. If you raise the price, the deal isn’t as great, but it’s not zero sum.
First, Not everything is a commodity with perfect substitutes, arguably most things aren’t. Substitutability goes beyond price.
Secondly, benefits are not necessarily equal or a linear function of cost.
Third, whether a game is zero, positive, or negative sum requires a look at the costs/benefits of the whole transaction. Saying that a buyer gains $1 more if the price goes up is obvious, it that doesn’t necessarily make it zero sum when you look at the overall transaction of a $1 price raise. .
Zero sum implies that price, costs and benefits are equal. I spend $20 on a product that cost you $20 to make, and I get $20 of benefits out of it.
Whereas I buy something for $20 , it cost you $5 to make, and I got benefits of $100 out of it, that’s positive sum, as both the buyer and seller got positive gain. If you raise the price, the deal isn’t as great, but it’s not zero sum.