Democratic Transition Game Consider the Case That You Are a Soft-Liner in an Soft-Liner

question 47

Multiple Choice

Democratic Transition Game
Consider the case that you are a soft-liner in an authoritarian regime who would like to introduce a policy of liberalization. Your goal is to co-opt the opposition into a broadened dictatorship, not to transition to democracy. You are a dictator, not a democrat!
1. If you open and civil society enters, then you achieve your objective of a Broadened Dictatorship.
2. If you open and civil society organizes, then you need to decide whether to democratize and become a full democracy or to repress.
3. A successful repression will lead to a narrow dictatorship, whereas an unsuccessful repression will lead to insurgency.
4. Repression is successful only if civil society is weak.
Figure 1

Figure 2

-The game tree in Figure 2, is associated with the game in which you are sure that civil society is STRONG. Solve the game by backward induction. What is the subgame perfect Nash equilibrium?

• A) Do nothing
• B) Do nothing, Democratize; Enter
• C) Do nothing, Democratize; Organize
• D) Open, Repress; Enter
• E) Open, Democratize; Organize

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Definitions:

Investment Proposals

Formal suggestions or plans put forward for consideration, aimed at initiating a financial investment.

Discount Rate

The discount rate applied in the evaluation of the present value of future cash flows in discounted cash flow analysis.

Present Value

The current worth of a future sum of money or stream of cash flows, given a specified rate of return.

Cash Inflows

The total amount of money being received by a company, usually from its operations, investments, or financings.