In the first round of an experiment with three players, Max observes that another player cheated on the third player. Max knows that if he presses the yellow button, he will get $10 but that if he presses the red button, he will get nothing, and the cheating player will lose $2. Max presses the red button. What idea from behavioral economics explains why Max would do something that is seemingly not in his best interest?
A) Consumers like balance.
B) Consumers can be misled by the way that something is priced.
C) Consumers want fairness.
D) Consumer make inaccurate risk assessments.

Question

Quizplus · Accepted Answer

Max's decision to press the red button, despite not gaining any money and instead causing the cheating player to lose money, is best explained by the idea that consumers (or people in general) value fairness. This concept suggests that individuals are willing to sacrifice personal gain to punish unfair behavior or to restore fairness.

In the First Round of an Experiment with Three Players