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In a study conducted at the economic laboratory, two participants, Person A and Person B, are randomly paired.
The pairing is anonymous, meaning that neither participant will know the identity of the other participant with whom he or she is paired.
In the experiment, Person A will make a choice, the experimenter will record this choice, and then
both Person A and Person B will be informed of the choice and paid money based on the choice made by Person A. Additionally, both
will receive a small participation fee. Suppose that neither Person A nor Person B will receive any other money for participating
in the experiment.
The experiment consists of two stages. In the first stage,
both Person A and Person B participate in a task for 30 minutes. When Person A and Person B participate in this stage, they do not know about the existence of the second stage.
In the task of the first stage, Person A and Person B are presented with tables containing only 1s and 0s. Person A and Person B have to indicate the number of 0s in each table. Person A and Person B will be making their decisions separately and independently of one another.
They will each be observing their own set of tables with 1s and 0s, and providing their answers accordingly. An example of a table is provided below.