[Market Economy Guide] Is the Economy a Zero-Sum Game?

“You get more customers when stores are clustered together… In the virtuous cycle of competition, the whole pie grows”

Jung-hoon Park is a nationally beloved actor whom everyone knows. What is not widely known, however, is that he once debuted as a film director. In 2013, he directed the movie *Top Star*, adding film director to his name. Because the film’s story—of a top star who experiences frustration after reaching the top and then successfully makes a comeback—closely resembled Park Jung-hoon’s own life story, it became a hot topic.

Park Jung-hoon and Jung-woo Ha

What is interesting is that around the same time *Top Star* was released, actor Jung-woo Ha’s directed film *Fasten Your Seatbelt* also premiered. Because two top stars debuted as film directors almost back to back, the two films naturally became subjects of comparison.

It seems a reporter asked Park Jung-hoon a similar question when he visited the Busan International Film Festival to promote his film. Coincidentally, both *Top Star* and *Fasten Your Seatbelt* had been invited to the Busan International Film Festival. Since questions comparing the two films were inevitable, the seasoned veteran, with nearly 30 years since his debut, reportedly answered like this:

“Jung-woo Ha is a talented guy, but did that talent really disappear in *Fasten Your Seatbelt*? It became a topic because both he and I took on directing, but I think it’s even better that there’s someone in the same position as me. Film is not a zero-sum game. If both movies are good, audiences will watch both; if both are bad, they won’t watch either. I’d like to send words of encouragement to my wonderful junior, Jung-woo Ha.”

As Park Jung-hoon said, film is not a zero-sum game. When there are many good movies, audiences watch more; when they think movies are not very good, they simply do not go. Instead of movies, they may watch a play or a musical, or read a book. They may go traveling or have drinks with friends. There are truly many ways to spend leisure time. If they really have nothing else to do, they can just stay home, lounge around, watch television, or sleep.

What happens when a movie reaches 10 million viewers?

If you assume that the release of one blockbuster film will necessarily hurt the box office performance of other films, that is an overly simplistic way of calculating things. Of course, that can happen. But there are also cases in which a hit film helps other films do well too. A hit movie does not necessarily block the success of other films. Depending on the circumstances, it can even draw into theaters people who had no interest in movies in the first place. When that happens, the overall size of the film market grows. This is the so-called twin box-office effect. A good example is 2004, when *Silmido* became the first Korean film in history to surpass 10 million moviegoers, only to have *Tae Guk Gi: The Brotherhood of War* follow shortly after and break that record in the same year. Many analyses said the huge success of both films was the result of targeting middle-aged men in their 40s and 50s, a demographic that did not usually go to theaters very often.

This virtuous cycle of competition is not limited to the film market. In the real economy, it is common to see merchants in the same line of business gather together, learn from one another, compete, and increase overall sales. Think of the enormous concentration of clothing markets near Dongdaemun in Seoul. If merchants believed that having many other clothing stores nearby would only hurt them, they would never cluster together like that. If they really thought it would hurt them, they would open their stores in some quiet, isolated corner of a neighborhood where no fashion mall could be found. The reason every region and city has food alleys where eateries are gathered together is the same.

Grow the whole pie

From the consumer’s perspective as well, even when people go intending to buy just one item, if many similar stores and products are gathered in one place, they often end up increasing their spending unintentionally by buying two or three things instead. As theaters shifted to the multiplex system, audiences were able to choose from several films in one place, and movie consumption increased accordingly. The economy, in this way, is not a zero-sum game, and competition always increases the size of the whole pie.

Building walls to protect what is yours and keeping other competitors out is futile. The open attitude that benefits both oneself and society is to think about how what you create can be more helpful to people and give them greater satisfaction.

■ Let’s think about it

After the film *Silmido* became the first to surpass 10 million viewers, *Tae Guk Gi: The Brotherhood of War* followed and set a new audience record. Many people mistakenly think of the market economy as a zero-sum game, but in reality it expands the whole pie.

Sung-no Choi

President, Center for Free Enterprise (CFE)

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Original title: [시장경제 길라잡이] 경제는 제로섬 게임?

Author: Sung-no Choi

Date: 2018-12-24

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=column&pn=15&idx=11341