Problem 2:

Suppose that an antitrust plaintiff hires a lawyer who will take the case on a contingent fee basis. As in,

the plaintiff pays no lawyer fees if he loses. If he wins, the lawyer gets one-third of the damages awarded

and will receive his attorneys fee from the defendant. This is relatively common in class action suits.

A) Restate the plaintiffs expected return from an antitrust lawsuit.

B) Restate the defendants expected loss from an antitrust lawsuit.

C) Re-derive the conditions for a settlement, assuming the plaintiff and defendant agree on damages

but disagree on the probability of the plaintiff winning. Interpret these conditions, paying special

attention to what seems different from the conditions we derived in class.