C

several individuals go out to eat, prior to ordering they agree to split the check equally between all of them. Each individual must now choose whether to order the expensive or inexpensive dish. It is presupposed that the expensive dish is better than the cheaper, but not by enough to warrant paying the difference compared to eating alone. Each individual reasons that the expense they add to their bill by ordering the more expensive item is very small, and thus the improved dining experience is worth the money. However, every individual reasons this way and they all end up paying for the cost of the more expensive meal, which, by hypothesis, is worse for everyone than ordering and paying for the cheaper meal.

An airline loses two suitcases belonging to two different travelers. Both suitcases happen to be identical and contain identical antiques. An airline manager tasked to settle the claims of both travelers explains that the airline is liable for a maximum of $100 per suitcase, and in order to determine an honest appraised value of the antiques the manager separates both travelers so they can't confer, and asks them to write down the amount of their value at no less than $2 and no larger than $100. He also tells them that if both write down the same number, he will treat that number as the true dollar value of both suitcases and reimburse both travelers that amount. However, if one writes down a smaller number than the other, this smaller number will be taken as the true dollar value, and both travelers will receive that amount along with a bonus/malus: $2 extra will be paid to the traveler who wrote down the lower value and a $2 deduction will be taken from the person who wrote down the higher amount. The challenge is: what strategy should both travelers follow to decide the value they should write down?