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7. Changes in incentives Suppose the large number of bike accidents in a small town results in new legislation that requires all citizens of the

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7. Changes in incentives Suppose the large number of bike accidents in a small town results in new legislation that requires all citizens of the town to wear specialized bike helmets when riding. These new helmets reduce the probability of head trauma by 25% during a bike accident. While the new helmets the probability of a serious head injury resulting from a bike accident, they also incentivize cyclists to ride, safely, which could the number of bike accidents and thus head injuries to cyclists

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