Problem
Think about a trust game in which the trustor starts out with $10, and an investment yields $3 for each dollar invested. Let's use F to stand for the absolute value of the difference between the two players' payoffs, as in the last two questions. Suppose the trustor is selfish and cares only about his own dollar payoff. The trustee, however, cares about fairness-she ranks the outcomes according to the value R - 2F, where R is her dollar payoff. What will the trustee do if the trustor invests $2, $4, $6, $8, or $10? What is the trustor's payoff in each case? What is the trustor's best choice? How would your answer change if the investment yielded $1.50 for each dollar invested?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.