. Consider the following game based on the Trust Game (which is a commonly used game to measure the level of trust in a society).
. Consider the following game based on the Trust Game (which is a commonly used game to measure the level of trust in a society). An \"investor\" (player 1) can decide whether to send some portion of $10 to an \"entrepreneur\" (player 2). If she keeps all of the money, the game ends with the investor getting $10 and the entrepreneur getting $0. If the investor sends any money, it gets tripled (e.g., sending $10 gets tripled to $30), and the entrepreneur decides whether to keep all the money to herself, or to send some amount back to the investor. (a) (2pts) What is the equilibrium of this game if both players are purely self-interested? (b) Suppose the two players have distributional preferences as intro- duced in class: if 2; and 2y are the amounts of money players 1 and 2 end up with, respectively, then player 1's utility is ir)+ iy, iz a9 while player 2's utility is 2 1 : 3T1+ 372, Hza2x T ifzo
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