Suppose a negligent injurer causes $250,000 in damages to a…
Suppose a negligent injurer causes $250,000 in damages to a non-negligent victim, and the cost of going to trial would be $90,000 each. Assume that both parties are risk neutral, but the victim believes the probability of winning is 80% and the injurer believes the victim’s probability of winning is 30%. Give these assumptions, and assuming that the parties can agree on how to share the gains:
Read DetailsSuppose a negligent injurer causes $250,000 in damages to a…
Suppose a negligent injurer causes $250,000 in damages to a non-negligent victim, and the cost of going to trial would be $90,000 for each party. Assume that both parties are risk neutral and believe with certainty that the victim will win. Under these assumptions:
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