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Victim damages in the event of an accident

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Reference no: EM131564478

Consider a unilateral care accident model in which the injurer can either take care at a cost of $50, or no care. Further, suppose that if he takes care, there is zero risk of an accident, but if he does not take care, the risk is 0.1. Finally, suppose the victim's damages in the event of an accident are $750. Use the Hand rule to determine if care is efficient in this case.

Reference no: EM131564478

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