Scenario: Catherine and Arthur are playing a game. They are put in two different rooms and asked to choose between two colors: black and white. If they both choose black, they will not get any money. If they both choose white, each of them will get $5. If one chooses white while the other chooses black, the one who chooses black will get $10 and the one who chooses white will get $0.
-Refer to the scenario above.If the players have to pay a fairness penalty of $6,________.

Question

Quizplus · Accepted Answer

Given the fairness penalty of $6, choosing white by both players maximizes their individual and collective payoff, ensuring each gets $5 minus the penalty, which still allows for a positive outcome compared to other options where the penalty could negate any gains or lead to a loss.

Scenario: Catherine and Arthur Are Playing a Game