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Exit, Voice, and Loyalty

Question 11

Multiple Choice

Exit, Voice, and Loyalty
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.
Exit, Voice, and Loyalty 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.    -What is the expected outcome of the game if you use these payoff values? A)  citizen uses voice, state backs down B)  citizen uses voice, state backs down, citizen exits C)  citizen exits D)  citizen remains loyal E)  citizen uses voice, state backs down.
-What is the expected outcome of the game if you use these payoff values?


A) citizen uses voice, state backs down
B) citizen uses voice, state backs down, citizen exits
C) citizen exits
D) citizen remains loyal
E) citizen uses voice, state backs down.

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