What is the subgame perfect Nash equilibrium or equilibria for the game if you use these payoff values?
Below is the Exit, Voice, and Loyalty game between the state and the citizen.Recall that E is the payoff that the citizen gets when she exits, L is the payoff that the state gets from retaining a loyal citizen, 0 is the payoff that the citizen gets from remaining loyal, and C is the cost that the citizen must pay for using voice.
Let E = 0.5, let L> 1, and let C = 0.75.
Recall that the equilibrium should be written in the following form: (citizen’s move at her first node, citizen’s move at her last subgame; state’s move at his [only] subgame).
A. exit, exit; respond
B. voice, exit; respond
C. loyalty, exit; respond
D. exit
E. voice, exit; ignore
A. exit, exit; respond
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