Consider a model of unilateral care. The injurer can invest $50 in care and reduce the probability of an accident to zero or take no care and face a 10% chance that an accident causing $750 in damages occurs. a. Is it efficient for the injurer to take care in this case? b. Suppose the court could not observe whether or not the injurer took care. Would it be appropriate to for the court to invoke the res ipsa loquitur doctrine in this case?

ENGR.ECONOMIC ANALYSIS
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1. Consider a model of unilateral care. The injurer can invest $50 in care and reduce the
probability of an accident to zero or take no care and face a 10% chance that an accident
causing $750 in damages occurs.
a. Is it efficient for the injurer to take care in this case?
b. Suppose the court could not observe whether or not the injurer took care. Would it be
appropriate to for the court to invoke the res ipsa loquitur doctrine in this case?
Transcribed Image Text:1. Consider a model of unilateral care. The injurer can invest $50 in care and reduce the probability of an accident to zero or take no care and face a 10% chance that an accident causing $750 in damages occurs. a. Is it efficient for the injurer to take care in this case? b. Suppose the court could not observe whether or not the injurer took care. Would it be appropriate to for the court to invoke the res ipsa loquitur doctrine in this case?
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