Test Bank

Chapter 3: What Is Politics?

Extensive Form Games

1. What is the subgame perfect Nash equilibrium or equilibria of the game shown here?

Recall that the equilibrium should be written in the following form: (Player 1’s move at the first node, Player 2’s move at her top subgame, and Player 2’s move at her lower subgame).

A. (D; d, u)

B. (U; u)

C. (U; u, d)

D. (D, d)

D. (u, d; U)

Cognitive Domain: Application

Difficulty Level: Medium

2. What is the subgame perfect Nash equilibrium or equilibria of the game shown here?

Recall that the equilibrium should be written in the following form: (Player 1’s move at the first node, Player 2’s move at her top subgame, and Player 2’s move at her lower subgame).

A. (D; u, u)

B. (D; d, u)

C. (D; u)

D. (D; u, u) (D; d, u)

E. (U; d, u) (U; d, d)

Cognitive Domain: Application

Difficulty Level: Medium

3. What is the subgame perfect Nash equilibrium or equilibria of the game shown here?

Recall that the equilibrium should be written in the following form: (Player 1’s move at the first node, Player 2’s move at her top subgame, and Player 2’s move at her lower subgame).

A. (D; d, d)

B. (D; d)

C. (C; d, c)

D. (C; c)

Cognitive Domain: Application

Difficulty Level: Medium

4. What is the subgame perfect Nash equilibrium or equilibria of the game shown here?

Recall that the equilibrium should be written in the following form: (Player 1’s move at the first node, Player 2’s move at her top subgame, and Player 2’s move at her lower subgame).

A. (R; r)

B. (L; l)

C. (R; r) (L; l)

D. (R; r, l) (L; r, l)

E. (R; l)

Cognitive Domain: Application

Difficulty Level: Medium

5. What is the subgame perfect Nash equilibrium or equilibria of the game shown here?

Recall that the equilibrium should be written in the following form: (Player 1’s move at the first node and Player 2’s move at the second subgame).

A. (U)

B. (D; d)

C. (U; d)

D. (U; u, d)

E. None of these

Cognitive Domain: Application

Difficulty Level: Medium

6. What is the subgame perfect Nash equilibrium or equilibria of the game shown here?

Recall that the equilibrium should be written in the following form: (Player 1’s move at her first node, Player 1’s move at her last subgame, and Player 2’s move at his [only] subgame).

A. (U)

B. (D; d)

C. (D; u; R)

D. (D; R)

E. (D, R; u)

Cognitive Domain: Application

Difficulty Level: Medium

Exit, Voice, and Loyalty

Questions 1–3 (Exit, Voice, and Loyalty) go together.

1. 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 = 0.25.

What is the subgame perfect Nash equilibrium or equilibria for the game if you use these payoff values?

1 – C; L

Exit

E; 1

Loyalty

Exit

Ignore

Respond

Voice

Loyalty

0; 1 + L

0 – C; 1 + L

E – C; 1

Citizen

Citizen

State

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. voice, exit; respond

B. voice; exit

C. voice; respond; exit

D. exit, exit; respond

E. voice, respond; ignore

Cognitive Domain: Application

Difficulty Level: Hard

2. What is the expected outcome of the game if you use these payoff values?

A. citizen uses voice, state responds

B. citizen uses voice, state responds, citizen exits

C. citizen exits

D. citizen remains loyal

E. citizen uses voice, state ignores.

Cognitive Domain: Application

Difficulty Level: Medium

3. What are the equilibrium payoffs for each player if you use these payoff values?

A. −.25; 1 + L

B. .5, 1

C. .75; L

D. .25; 1

E. 0; 1 + L

Cognitive Domain: Application

Difficulty Level: Medium

Questions 4–6 (Exit, Voice, and Loyalty) go together.

4. 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 subgame perfect Nash equilibrium or equilibria for the game if you use these payoff values?

1 – C; L

Exit

E; 1

Loyalty

Exit

Ignore

Respond

Voice

Loyalty

0; 1 + L

0 – C; 1 + L

E – C; 1

Citizen

Citizen

State

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

Cognitive Domain: Application

Difficulty Level: Hard

5. 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

Cognitive Domain: Application

Difficulty Level: Medium

6. What are the equilibrium payoffs for each player if you use these payoff values?

A. 0; 1 + L

B. .25; 1

C. −.5; 1 + L

D. −.25; 1

E. .5; 1

Cognitive Domain: Application

Difficulty Level: Medium

7. What is required for a citizen to be able to easily influence the state according to the Exit, Voice, and Loyalty game examined in Chapter 3?

A. The citizen can never influence the state.

B. The citizen must have a credible exit threat (E > 0).

C. The state must depend on the citizen (L > 1).

D. Voice must not be too costly (C < 1 − E).

E. The citizen must have a credible exit threat (E > 0), the state must be dependent (L > 1), and voice must not be too costly (C < 1 − E).

Cognitive Domain: Comprehension

Difficulty Level: Medium

8. Drawing on the insights from the Exit, Voice, and Loyalty game examined in Chapter 3, what inferences could we have made about the citizens of the repressive East German regime during the height of the cold war (say, the 1960s through the early 1980s)?

A. that the citizens had a credible exit threat

B. that the citizens did NOT have a credible exit threat

C. We wouldn’t be able to tell if the citizens had a credible exit threat or not based on what we could observe at the time.

Cognitive Domain: Application

Difficulty Level: Medium

9. Drawing on the insights from the Exit, Voice, and Loyalty game examined in Chapter 3, what inferences could we have made about the government (the state of the repressive East German regime during the height of the cold war (say, the 1960s through the early 1980s)?

A. that the state was dependent

B. that the state was autonomous

C. We wouldn’t be able to tell if the state was dependent or autonomous based on what we could observe at the time.

Cognitive Domain: Application

Difficulty Level: Medium

10. One of the insights from the Exit, Voice, and Loyalty game is that it can be difficult to figure out who has power and who does not simply by observing their actions in the real world.

Cognitive Domain: Comprehension

Difficulty Level: Easy

11. According to the Exit, Voice, and Loyalty argument, what type of activity are people engaging in when they switch political parties?

A. exit

B. voice

C. loyalty

Cognitive Domain: Comprehension

Difficulty Level: Easy

12. Drawing on the insights from the Exit, Voice, and Loyalty game examined in Chapter 3, what can we infer when we see states ignoring the demands of their citizens? For example, if we know that the average North Korean citizen stays in North Korea and is badly treated by the government, and we also see the North Korean leader Kim Jong-Il ignoring his citizens, then we can infer

A. That the citizens have no exit threat and that the state (Kim Jong-Il) depends on the citizens.

B. That the citizens do have a credible exit threat and that the state depends on the citizens.

C. That the citizens do have a credible exit threat and that the state is autonomous.

D. We can’t assume anything about whether the citizens have a credible exit threat but we can assume that the state is autonomous.

E. We can’t assume anything about whether the state is autonomous or dependent, but we can assume that the citizens do not have a credible exit threat.

Cognitive Domain: Application

Difficulty Level: Medium

13. Drawing on the insights from the Exit, Voice, and Loyalty game examined in Chapter 3, what can we infer by the differing responses by the U.S. government following the financial crisis to the requests by the financial sector and U.S. automakers for bailouts?

A. The government did not depend on the support of the financial sector and automakers.

B. The government did not depend on the support of U.S. automakers.

C. The financial sector did not have a credible exit threat.

D. The U.S. automakers did not have a credible exit threat.

E. Neither the financial sector nor the U.S. automakers had credible exit threats.

Cognitive Domain: Application

Difficulty Level: Medium

14. Compared to the bailouts that the financial sector received following the financial crisis, the U.S. automakers:

A. received a bailout similar in size.

B. received a much smaller bailout much more quickly.

C. received a much smaller bailout much slower.

D. received a much larger bailout.

Cognitive Domain: Knowledge

Difficulty Level: Easy

15. The Exit, Voice and Loyalty game explains the difficulty in the U.S. automakers receiving a bailout following the financial crisis compared to the financial sector by stating that the state was not dependent on the support of the automakers.

Cognitive Domain: Comprehension

Difficulty Level: Medium

16. The Exit, Voice and Loyalty game explains the difficulty in the U.S. automakers receiving a bailout following the financial crisis compared to the financial sector by stating that the automakers did not have a credible exit threat.

Cognitive Domain: Comprehension

Difficulty Level: Medium

17. Imagine that you are unhappy with your current job because you think you should have received a raise but your boss did not give you one. In this story, you can think of yourself as the “citizen” and your boss as the “state.” According to the predictions of the Exit, Voice, and Loyalty game, in which of the scenarios shown below should you ask for a raise (that is, “use voice”)?

A. When you really need the job, have little chance of finding another, and when your boss could easily replace you.

B. When you really need the job, have little chance of finding another, and when your boss could NOT easily replace you.

C. When you don’t really need the job because you could easily find another similar job, and when your boss could easily replace you.

D. When you don’t really need the job because you could easily find another similar job, and when your boss could NOT easily replace you.

e. According to the assumptions and logic of the EVL model, you should always ask for a raise in any of the scenarios listed above in answers (a–d).

Cognitive Domain: Application

Difficulty Level: Medium

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 following questions, let R =2. Let c = 0.25.

18. 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 2nd choice; state’s choice).

Cognitive Domain: Application

Difficulty Level: Medium

19. Now let E = −.25. . Write the payoffs for both actors in the game above. What is the subgame perfect equilibrium? Please answer in the form (citizen’s 1st choice, citizen’s 2nd choice; state’s choice).

Cognitive Domain: Application

Difficulty Level: Medium

20. Given that the state depends on the citizen in this example (R > 1), to what extent does the citizen’s behavior depend on the attractiveness of her exit options? (3 points)

Cognitive Domain: Application

Difficulty Level: Hard

21. Given that the state depends on the citizen in this example (R > 1), to what extent does the state’s behavior depend on the attractiveness of the citizen’s exit options? (3 points)

Cognitive Domain: Application

Difficulty Level: Hard