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Assuming Self-Regarding Preferences, in the Nash Equilibrium of the Berg

Question 3

Multiple Choice

Assuming self-regarding preferences, in the Nash equilibrium of the Berg et al. trust game:


A) First movers should transfer their entire endowment to the second movers and the second movers should return the entire tripled amount.
B) First movers should transfer their entire endowment to the second movers and the second movers should keep this entire amount.
C) First movers should transfer their entire endowment to the second movers and the second movers should return half of the amount received.
D) The second movers have no incentive to return any money; anticipating that the first movers should not send any money in the first place. Both sets of players should end the game with their initial endowments.

Correct Answer:

Answered by ExamLex AI

Answered by ExamLex AI

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