Scenario: Beth and Charles are playing a trust game. At the beginning of the game, Beth has to choose whether to trust Charles. If she trusts him, he can choose to either defect or cooperate. The diagram below shows their respective payoffs in different situations.

-Refer to the scenario above.In equilibrium,Beth's payoff is ________.
A) $10
B) $0
C) $20
D) $50

Question

Scenario: Beth and Charles are playing a trust game. At the beginning of the game, Beth has to choose whether to trust Charles. If she trusts him, he can choose to either defect or cooperate. The diagram below shows their respective payoffs in different situations.
 
-Refer to the scenario above.In equilibrium,Beth's payoff is ________.
A) $10 
B) $0 
C) $20 
D) $50

Quizplus · Accepted Answer

In equilibrium, Beth will choose the action that maximizes her payoff. Since she can either choose to accept or reject the offer, she will choose to accept if the offer is greater than or equal to her outside option, which is $10. Since the offer is $20, Beth will accept and her payoff will be $20.

Scenario: Beth and Charles Are Playing a Trust Game