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hhhhhhhhhhh Amy likes to go fast in her new Mustang GT. Their utility function over wealth is v(w) where w is wealth. If Amy goes

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Amy likes to go fast in her new Mustang GT. Their utility function over wealth is v(w) where w is wealth. If Amy goes fast she gets an increase in utility equal to S. But when Amy drives fast, she is more likely to crash: when she drives fast the probability of a crash is 20%, but when she obeys the speed limit, the probability of a crash is only 10%. Amy's car is worth $1000 unless she crashes, in which case it is worth $0. If Amy doesn't have insurance, driving fast isn't worth the risk, so she will alway obey the speed limit. If Amy is offered an insurance contract with full insurance for a premium P with the deductible D, which of the inequalitest below is her incentive compatibility constraint that makes sure that she will still obey the speed limit even when she is fully insured? Oo.1U(1000-P-D)+0.90U(1000-P)>0.10U(0)+0.90U(1000) Oo.1U(1000-P-D)+0.90U(1000-P)>0.2(U(O)+S)+0.8(U(1000)+S) 0.2U(1000-P-D)+0.8U(1000)>0.1(U(1000-P-D )+S)+0.90(U(1000)+S) Oo.1U(1000-P-D)+0.90U(1000-P)>0.2(U(1000-P-D )+S)+0.80(U(1000-P)+S) 0.2(U(1000-P-D)+S)+0.95(U(1000-P)+S))>0.10U(0-P-D+1000)+0.90U(1000-P)

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