Final answer:
The answer is false; both parties do not necessarily need to make less money for the other to win in the Pepulator Case, as cooperation and fairness can often result in better overall outcomes even in competitive situations.
Step-by-step explanation:
The main answer to the question regarding whether one party needs to make less money for another party to maximize profits in the Pepulator Case is false. This scenario is often seen as a prisoner's dilemma, where both firms A and B have the potential to maximize their combined profits by cooperating rather than competing. The experimental data shows that players often value fairness over the maximization of self-interest, leading them to make or accept offers that are closer to a fair split, such as 50-50, 60-40, or 70-30, rather than disproportionate splits. This is especially true when the interactions are repeated, as unfair precedent may lead to continued unfairness in subsequent dealings. Players may also make fair offers or reject unfair ones as strategic decisions, taking into account uncertainties and potential future interactions.In conclusion, the assumption that one party has to lose for another to gain is challenged by the behavior observed in such games and economic scenarios. Instead, cooperation and notions of fairness can result in decisions that do not conform to the expectation of maximizing self-interest at the other's expense.