Figure 9P 7 shows a sequential game in which one player decides whether to cause damage to the property of (injure) another player The injured player can then choose whether to sue, which involves costly legal fees a What is the predicted outcome in this game b What is the predicted outcome if the injured party has made a binding commitment always to sue when injured Result Inured 10 Injurer 3 No Injured party Sue No ITE Injurer Do harn Yes Injured 1 Injurer 1 Injured party Sue Yes Injured 3 No Injurer 10

Question: Figure 9P-7 shows a sequential game in which one player decides whether to cause damage to the property of (injure) another player. The injured player

Figure 9P-7 shows a sequential game in which one player decides whether to cause damage to the property of (injure) another player. The injured player can then choose whether to sue, which involves costly legal fees.

a. What is the predicted outcome in this €œgame€?
b. What is the predicted outcome if the injured party has made a binding commitment always to sue when injured?

Result Inured: 10 Injurer 3 No Injured party Sue? No ITE Injurer Do harn Yes Injured 1 Injurer. 1 Injured party Sue? Yes Injured: 3 No Injurer 10

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