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1. The technology of interaction for a contractual relationship is given by the matrix below. 2 H L H 5,5 0,8 L 7,0 1,1 Suppose

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1. The technology of interaction for a contractual relationship is given by the matrix below. 2 H L H 5,5 0,8 L 7,0 1,1 Suppose the players write an incomplete contract stating that they agree to play the jointly-efficient outcome (that which maximizes the joint payoff as found in last week's homework). Assume that the court can verify exactly the outcome of produc- tion. (a) Suppose that the court uses expectation damages. Can the jointly- efficient outcome be implemented? Briefly explain. (b) Suppose that the court uses reliance damages. Can the jointly-efficient outcome be implemented? Briefly explain. (c) Suppose that the court uses restitution. Can the jointly-efficient out- come be implemented? Briefly explain

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