Sarah and Melissa are considering contributing toward the creation of a building mural. Each can choose whether to contribute $200 to the building mural or to keep that $200 for a cell phone.

Since a building mural is a public good, both Sarah and Melissa will benefit from any contributions made by the other person. Specifically, every dollar that either one of them contributes will bring each of them $0.75 of benefit. For example, if both Sarah and Melissa choose to contribute, then a total of $400 would have been contributed to the building mural. So, Sarah and Melissa would each receive $300 of benefit from the building mural, and their combined benefit would be $600.

Since a cell phone is a private good, if Sarah chooses to spend $200 on a cell phone, Sarah would get $200 of benefit from the cell phone and Melissa wouldn't receive any benefit from Sarah's choice. However, if Melissa chooses to contribute $200 to the building mural, Sarah would still receive the $150 of benefit from Melissa's generosity. In other words, if Sarah decides to keep the $200 for a cell phone and Melissa decides to contribute the $200 to the public project, then Sarah would receive a total benefit of $200 + $150 = $350, Melissa would receive a total benefit of $150, and their combined benefit would be $500.

The following table shows the combined benefits of Sarah and Melissa. As described previously, if both Sarah and Melissa contribute to the building mural, their combined benefit would be $600; this is shown in the upper left cell of the table. Similarly, if Sarah keeps the $200 for a cell phone and Melissa contributes to the project, their combined benefit would be $500; this is shown in the lower left cell of the table. Fill in the right-hand column of the table.

Melissa's Decision
Contribute Don't Contribute
Sarah's Decision Contribute $600
Don't Contribute $500
Of the four cells of the table, which gives the greatest combined benefits to Sarah and Melissa?

When neither Sarah nor Melissa contributes to the building mural.

When both Sarah and Melissa contribute to the building mural.

When Sarah contributes to the building mural and Melissa doesn't, or vice versa.

Now, consider the incentive Sarah faces individually. The following table looks similar to the previous one, but this time, it contains the individual benefit data for Sarah only. As shown previously, if both Sarah and Melissa contribute to a public good, Sarah receives a benefit of $300. On the other hand, if Melissa contributes to the building mural and Sarah does not, Sarah receives a benefit of $350. Fill in the right-hand column of the table with the benefits Sarah gets from each outcome.

Melissa's Decision
Contribute Don't Contribute
Sarah's Decision Contribute $300
Don't Contribute $350
If Melissa decides to contribute to the building mural, Sarah would maximize here benefit by choosing to _ to the building mural. On the other hand, if Melissa decides not to contribute to the building mural, Sarah would maximize her benefit by choosing to _ to the building mural.

These results illustrate _.