Great prelim question:

 To provide some interpretation, consider a set of equidistant urinals in a washroom and men who enter the room sequentially. Men dislike to choose a urinal next to another urinal which is already in use. If no urinal providing at least basic privacy is available, each man prefers to leave the room immediately. Each man prefers larger distances to the next man compared to smaller distances. The men enter the bathroom one by one in rapid succession, so men will only consider the privacy they have after no further men decides to use a urinal (e.g., the privacy the first man enjoys before the second man enters is too short to influence the first man’s utility).

One of the paper’s main results is that maximizing throughput (Beavis!) of a washroom may, paradoxically, entail restricting total capacity.  Consider a wall lined with 5 urinals.  The subgame perfect equilibrium has the first gentleman take urinal 2 and the second caballero take urinal 5.  These strategies are pre-emptive moves that induce subsequent monsieurs to opt for a stall instead out of privacy concerns.  Thus urinals 1, 3, and 4 go unused.  If instead urinals 2 and 4 are replaced with decorative foliage, and assuming that gentleman #1 is above relieving himself into same, then the new subgame perfect equilibrium has him taking urinal 1, and urinals 3 and 5 hosting the subsequently arriving blokes.  See the example on page 11.

Free cowboy hat tip:  Josh Gans

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