You’ve just acquired a sweet new ride and are trying to determine how to protect your wheels from theft. You’re considering purchasing the Club, a large steel bar that locks to your steering wheel and prevents car thieves from easily driving away. Alternatively, you’re considering installing LoJack, a hidden electronic device that allows law enforcement agencies to locate your car should you notify them of its theft.

a. Re-read the Application “Device-Finding Apps and Positive Externalities.” Then explain why the Club is more likely to directly deter thefts than LoJack is.

b. LoJack customers must agree not to display any window stickers or other signs that indicate their cars are LoJack-equipped. Why do you suppose the company that created LoJack insists on this agreement?

c. Support the argument that car drivers are probably buying the socially ideal quantity of the Club and other club substitutes, but that too few drivers are probably installing LoJack.