Question: Consider the model from Section 10.3. But suppose the voter has an affinity for the incumbent, so that if the incumbent is reelected, the voter
Consider the model from Section 10.3. But suppose the voter has an affinity for the incumbent, so that if the incumbent is reelected, the voter gets an additional payoff of . (This could be because the incumbent is charismatic, because the voter and incumbent are from the same political party or ethnicity, etc.) From the analysis in footnote 2, if the voter believes that low ability incumbents choose effort e1, then, conditional on seeing a good outcome, the voter believes the incumbent is of high ability with probability p > p. If the voter observes the bad outcome, he is certain the p e1 (1p) incumbent is low ability. (a) What is the expected utility of electing the challenger? (b) If the voter believes low ability incumbents choose effort e1, what is the expected utility of reelecting the incumbent after seeing a good outcome
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