A defendant believes there is a 40 percent chance that the plaintiff will win $1,000,000 and a 60 percent chance that the plaintiff will lose and be awarded nothing (zero). The plaintiff believes that there is a 60 percent chance that they will win $1,000,000 and a 40 percent chance that they will be awarded nothing (zero). The plaintiff's litigation cost is $100,000 and the defendant's
litigation cost is $400,000. Which of the following statements is true?
A) The plaintiff would be will to accept any amount greater than $450,000 to settle.
B) There is no economic incentive for either party to settle.
C) The defendant would be willing to pay up to $900,000 to settle.
D) The defendant would be willing to pay up to $800,000 to settle.
D) The defendant would be willing to pay up to $800,000 to settle.
You might also like to view...
The above figure shows the marginal social benefit and marginal social cost curves of coffee in the nation of Kaffenia. Which of the following would result in the quantity of coffee in Kaffenia differing from the efficient quantity?
A) The existence of a single producer and seller of coffee. B) The existence of many producers and sellers of coffee. C) Damage to the environment from fumes emitted by coffee beans. D) Both answers A and C are correct.
Private disposable income is equal to
A) Y + TR + INT - T. B) Y + NFP + TR + INT - T. C) Y - TR - INT + T. D) Y + CA - G.