B. Strict liability vs. negligence in situations of bilateral precaution In many cases, both the injurer and the victim can affect the probability and the magnitude of the harm (these situations call for "bilateral precaution"). Thus, suppose the pedestrian can also take precaution: she can walk or run. Let's turn to the driving example again: Behavior of driver Benefit to driver Expected accident cost to pedestrian Benefit minus cost Drive rapidly $120 $100 (walks) $20 (walks) $1 10 (runs) $10 (runs) Drive moderately $80 $40 (walks) $40 (walks) $50 (runs) $30 (runs) Drive slowly $50 $20 (walks] $30 (walks] $30 (runs) $20 (runs) 9. By how much does pedestrian's harm grow when she runs rather than walks? 10. What is the socially efficient combination of driver and pedestrian conducts? In the following questions, assume that running provides additional benefits to the pedestrian valued at $5 (for example, due to saving of time). Assume also strict liability and perfect compensation. 11. What is the pedestrian dominant strategy? 12. Does the driver have a dominant strategy? 13. Is the above pedestrian/drive result efficient? In the following questions, maintain the assumption that running provides additional benefits to the pedestrian valued at $5 (for example, due to saving of time) and perfect compensation. However, assume negligence rather than strict liability. 14. Does the driver have a dominant strategy? 15. What does the pedestrian choose? 16. Is this combination efficient