7. 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. POWER AND POLITICS: INSIGHTS FROM AN EXIT, VOICE, AND LOYALTY GAME WILLIAM ROBERTS CLARKy University of Michigan MATT GOLDERz Pennsylvania State University SONA N. GOLDERx Pennsylvania State University Wepresent a model in which we reformulate and extend Albert Hirschman’s Exit, Voice, and Loyalty (EVL) argument to examine the role of power in the relationship . in the last stage of the game exit or remain loyal? Well we know that the citizen receives E−c for exiting and 0−cfor remaining loyal. Since, in this case, E >0 we thus know that the citizen will choose to exit. Moving up in the game we must next ask, what will the state do if they know that the citizen will exit . Solving Exit, Voice, and Loyalty Game o Solving game is done by identifying choices that rational decision maker would make Rational means that player does what she believes is in best interest given o They solve the EVL game for something called subgame perfect equilibrium Subgame perfect equilibrium is important solution concept for extensive form games and can be found using a method known %(5). An Exit, Voice, and Loyalty Model of Politics WILLIAM ROBERTS CLARKy Texas A&M University MATT GOLDERz Pennsylvania State University SONA N. GOLDERx Pennsylvania State University ABSTRACT Political scientists typically develop different models to . Chapter 2 Exit, Voice, & Loyalty Hirschman's Theory. In his book `Exit, Voice, and Loyalty', A. O. Hirschman discusses his theory of exit, voice, and loyalty options in terms of consumers who feel that the products of a particular company are frvi4.netgh his theory is stated in terms of businesses and the market, he also briefly discusses a further possible application to the. Professor Hirschman develops a theory of loyalty as a key factor in the interaction between voice and exit: loyalty is shown to postpone exit and to make voice more effective through the possibility of exit. ” —The Economic Journal “ This is an imaginative little book. Its message should be of use to economists, political scientists, and.
Examples could include relocating assets to avoid a new tax, reincorporating a business to avoid new regulations, buying goods from a different store when the quality of the original diminishes, voting out the incumbent, etc. Hirschman points out that loyalty will automatically tend to increase the influence of voice: the customer will prefer to expend extra energy on voicing their opinion, rather than take their custom elsewhere. Seyd identifies three further reasons for needing members. This includes leaving the organisation, transferring to another work unit, or at least trying to get away from the unsatisfactory situation. More important with regard to political parties, particularly when they are as Labour currently is in government, is the fact that the organisation continues to affect their lives even after departure. However, it is in fact also likely to increase the pressure to utilise the voice option even in such an environment - the consumer feels a certain identity with the product and wishes to help save it.
When considering loyalty as an option, it has two forms - loyalty with, and loyalty without, voice. The most active, and the most concerned, are the most likely to choose the voice option in the case where there is no alternative. I will consider these questions in the following chapters, after assessing in the rest of this chapter the importance of the members to the leadership, which will have a very significant effect on the decisions of both sets of actors. Seats where Labour has a large majority are unlikely to be affected by the strength or lack of it of the local campaign. However, it is in fact also likely to increase the pressure to utilise the voice option even in such an environment - the consumer feels a certain identity with the product and wishes to help save it. This includes leaving the organisation, transferring to another work unit, or at least trying to get away from the unsatisfactory situation. Exit is dependent on the ability and willingness of customers to take up the voice option.