Abstract
Consider a game in which each player chooses between two strategies, H and S, and all players have the same payoff function. This could be, for instance, because all players are moral creatures committed to enhancing a common cause. Is it possible that in this game if each player chooses S instead of H (with other players′ strategy choices held constant), he (hence, everybody) is better off but he is worse off if everybody chooses S? It is shown that the answer to this is yes, if the number of players is infinite (even if only countably so). This is demonstrated by constructing a paradoxical game referred to here as the "waterfall" paradox. Some implications of the paradox for models of economics are discussed. Journal of Economic Literature Classification Numbers: C70, D71.
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