5. Economics is about strategic thinking, and the strategies can get very complicated. Suppose Marge kisses Mike and asks whether he liked it. She’d like Mike to answer

“yes” and she’d like that answer to be truthful. But Mike knows that, and if he likes Marge, he may well say that he liked the kiss even if he didn’t. But Marge knows that, and thus might not really believe that Mike liked the kiss—

he’s just saying “yes” because that’s what Marge wants to hear. But Mike knows that Marge knows that, so sometimes he has to convey a sense that he didn’t like it, so that Marge will believe him when he says that he did like it.

But Marge knows that . . . You get the picture.

a. Should you always be honest, even when it hurts someone?

b. What strategies can you figure out to avoid the problem of not believing the other person?