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?

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?

EBK HEALTH ECONOMICS AND POLICY

7th Edition

ISBN:9781337668279

Author:Henderson

Publisher:Henderson

Chapter7: The Market For Health Insurance

Section: Chapter Questions

Problem 11QAP

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