A classic problem for governments is how to reduce illegal parking.

Suppose there is a proposal for a new fine = (1.1) x original fine (F), and keeping the probability of getting a ticket the same. That is, now make the fine 1.1F. Alternatively, suppose there is a different proposal to keep the fine at the original fine (F), but increase the probability of getting a ticket to (1.1) x original probability of getting a ticket (P_T). That is, now make the probability of getting a ticket 1.1P_T. Which proposal will have a greater impact on reducing illegal parking for risk-neutral drivers? Explain. Which proposal will have a greater impact on reducing illegal parking for risk-averse drivers? Explain.