Let E= 0.50. Write the payoffs for both actors in the game below. What is the subgame perfect equilibrium?Please answer in the form (citizen’s 1st choice, citizen’s 2ndchoice; state’s choice).
Above is the Exit, Voice, and Loyalty game between the state (S) and the citizen (C).E is what the citizen gets from her exit option. R is what the state gets from the support (revenue) of the citizen. 0 is what the citizen gets for remaining loyal to the state. c is the cost for the citizen of exercising her voice option.
For the question, let R =2.Let c = 0.25.
What will be an ideal response?
Demand limits, Disinvest; Accept limits
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