Dwarf Puzzle

A group of dwarfs (more than 2) spend a considerable amount of time in a pitch dark grotto. Some dwarfs are wearing a red hats, the others yellow hats; but each dwarf does not know what the colour of the hat on his own head is.

When they leave the grotto they have to line up so that all the dwarfs with red hats stand on one side and those with yellow hats stand on the other side of the line. The dwarfs may not take off their hats to check its colour nor may they communicate the colour of another dwarfs hat to him.

How will the dwarfs solve this problem?

More colourful dwarfs.

Translated with permissions from: Das Zwerge-Rätsel

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