5. Everglades Tours, Inc. provides boat tours for college students wishing to observe alligators up close (like Tiger King but for reptiles...). Sometimes students try to touch alligators and lose an arm. This happens most often, but not only, when students are drunk. Boat operators can screen patrons for alcohol use prior to boarding the boat but can not otherwise prevent students from reaching out. A student who lost an arm sues the boat operator.

a. What do you expect are the efficient precautions by boat operators and students in this case?

b. Explain which rulestrict liability, no liability, or negligencewould induce most efficient outcomes in this business?

c. Suppose a judge that will hear the case is known to be unfriendly to spring break tourists. That is, he often awards slightly lower damages to the defendant than the efficient amount that other judges would award. If the legal rule is negligence, how will the judge's behavior affect future student incentives to take precaution? What about operator incentives?

d. Suppose the judge hearing the case frequently makes purely random errors in choosing the efficient legal standard to be applied in the case. That is, 50% of the time he chooses a legal standard that is too high and 50% of the time he chooses a legal standard that is too low, but the errors balance out so that the expected legal standard is the efficient one. If the legal rule is negligence, how will the judge's behavior affect future student incentives to take precaution? What about operator incentives?

e. How does answers to c and d change if the standard is strict liability?