(a) Describe the Berg, Dickhaut and McCabe (1995) game. (b) What does backward induction suggest about the resolution of the game? (c) When senders send non-trivial amounts of money to the anonymous receivers, are they motivated by purely altruistic motives or are they motivated by trust and reciprocity? Briefly discuss this using at least two papers that we read on the topic and explain how these papers argue that senders are motivated by trust and reciprocity.

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The Answer of (a) Describe the Berg, Dickhaut and McCabe (1995) game. (b) What does backward induction suggest about the resolution of the game? (c) When senders send non-trivial amounts of money to the anonymous receivers, are they motivated by purely altruistic motives or are they motivated by trust and reciprocity? Briefly discuss this using at least two papers that we read on the topic and explain how these papers argue that senders are motivated by trust and reciprocity.

(A) Describe the Berg, Dickhaut and McCabe (1995) Game