One way to lower the rate of auto accidents is strict enforcement of motor vehicle laws (speeding,
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a. What is the town€™s optimal strategy? What is the typical motorist€™s behavior in response?
b. What if the town could commit to a strict enforcement policy and motorists believed that this policy would be used? Would the town wish to do so?
c. Now suppose the town could commit to enforcing the law part of the time. (The typical motorist cannot predict exactly when the town€™s traffic police will be monitoring the roadways.) What is the town€™s optimal degree (i.e., percentage) of enforcement?Explain.
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a The towns dominant strategy is nonenforcement Anticipating this the typical motorist ch...View the full answer
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Related Book For 
Managerial economics
ISBN: 978-1118041581
7th edition
Authors: william f. samuelson stephen g. marks
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