ECO320H1 Lecture : Lecture Notes- Legal Procedure Nov 4 2009

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24 Aug 2010

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Gain for plaintiff can be money (compensation) Gain of justice = highly important j sometimes may be even more valued than monetary claims. Slide 6 j expected value of a legal claim. 5 decision points of filing/not filing, settling/not settle, winning/losing. zlz are worth, need to start at the end); find the expected values of each j move backwards. More reward j take greater probability case. Port colborne = lake eerie: a j possible awards, p j probability of winning. Canadian cost rule: 2/3 of legal costs paid by loser, zyz llz. If probability is uncertain, find break even probability (use equation: f=g=0 american cost rule applied, break even probability = . 15. American b/c the plaintiff is not at risk of paying their own lawyer and the opponents lawyer. When costs are award, not all costs are awarded (only a portion) j 2/3. No-way-certain j no reallocation of costs between parties (f=g=0)

Related Questions

The following payoff matrix shows the profit outcomes for threeprojects, A, B, and C, for each of two possible product prices.There is a 60% probability the price will be $10 and a 40%probability the price will be $20.
Profit
Project P = $10 P = $20
A 20 80
B 40 60
C -26 140

a. Using the maximum expected value rule a decision maker wouldchoose project B. Explain.
b. Using the mean variance rule a decision maker would also chooseproject B. Explain Why.

Testing for Groate's Disease is very expensive, and positive tests are quite rare. To cut costs, a

hospital considers the following procedure: they pool blood samples from twenty patients (while preserving

the individual samples), and test the pooled blood. If the test on the pooled blood sample is negative, all 20

patients test negative. If the pooled test is positive, the samples are then tested individually to determine

where the positive blood came from. Suppose that the probability any one individual's blood is positive is. 018, and that the

samples are independent across patients.

a. What is the probability that a pool of 20 individual samples will test negative?

b. What is the probability that a pool of 20 individual samples will test positive?

c. Let N represent the number of tests required to determine positive/negative status of a group of 20

patients, when following the pooled sample procedure described above. What is the expected value of N?

d. Dr. House suggests that while the pooled procedure is superior to testing each sample individually, the

hospital can save even more money by pooling samples from X individuals, where X does not equal 20. Show that he is 6

correct.

beigewallaby306

1. Suppose an investment project has an NPV of $150 million if it becomes successful and an NPV of ?$50 million if it is a failure. What is the minimum probability of success above which you should make the investment?

a. 0.5

b. 1/3

c. 0.25

d. 0.1

2. Your production line has recently been producing a serious defect. One of two possible processes, A and B, could be the culprit. From past experience you know that the probability that A is causing the problem is 0.8 but investigating A costs $100,000 while investigating B costs only $20,000. What are the expected error costs of shutting down process B first?

a. $80,000

b. $20,000

c. $16,000

d. $4,000

3. You want to price posters at the Poster Showcase profitably and run an experiment to estimate the demand elasticity. You raise the price of kitten posters 10% but keep your dog poster prices unchanged. After a month, kitten poster unit sales fall by 12%, but dog posters rise by 8%. Why might the elasticity estimate from this experiment be biased?

4. Tennessee just instituted a state lottery. The initial jackpot is $100,000. If the first week yields no winners, the next week's jackpot goes up, depending on the number of previous players who placed the $1 lottery bets. The probability of winning is one in a million (1.0

ECO320H1 Lecture : Lecture Notes- Legal Procedure Nov 4 2009

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