A Purely Self-Interested Diner Is More Likely to Tip

Emotions like guilt and sympathy: A)are irrelevant to economic decision-making. B)reduce the likelihood that a transaction will maximize total economic surplus. C)can solve commitment problems,increasing players' payoffs. D)can solve commitment problems,but generally reduce players' payoffs.

Suppose there are two small island countries: Avarice,which is populated by people who are completely self-interested and Altruism,which is populated by people who have adopted social norms of generosity and cooperation. Refer to the information given above.Commitment problems will be: A)largely avoided in Avarice,but prevalent in Altruism. B)largely avoided in Altruism,but prevalent in Avarice. C)prevalent on both islands. D)largely avoided on both islands.