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Unformatted text preview: Make a loan (financing some worthy development project) and have the reform implemented. Make a loan (financing the project) but not have the reform implemented and not punish the recipient. Make no loan. Make a loan (financing the project) but not have the reform implemented and punish the recipient. Raritanias preference ranking is: Receive a loan, decline to reform, and escape punishment. Receive a loan, implement reform, and escape punishment. Receive no loan. Receive a loan, decline to reform, and be punished. Draw a suitable game tree for this strategic interaction. Label the terminal nodes with payoffs for the two players that are consistent with the preference rankings. Find the subgame perfect Nash equilibrium of the game. Discuss your result briefly. 3. Clark, Golder, and Golder, Problem 6.3 (i.e., Chapter 6, Problem 3) 4. Clark, Golder, and Golder, Problems 7.1 and 7.2...
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- Fall '09
- Comparative Politics