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You've just acquired a sweet new ride and are trying to determine how to protect your wheels from theft. You're considering purchasing the Club, a
You've just acquired a sweet new ride and are trying to determine how to protect your wheels from theft. You're considering purchasing the Club, a large steel bar that locks to your steering wheel and prevents car thieves from easily driving away. Alternatively, you're considering installing LoJack, a hidden electronic device that allows law enforcement agencies to locate your car should you notify them of its theft. a. Why is the Club more likely than LoJack to directly deter thefts? Thieves are more responsive to traditional theft deterrents, such as locks, than modern ones that involve digital technology. The external benefits of the Club exceed those of LoJack. The Club is a visible deterrent, whereas LoJack is invisible to car thieves. O LoJack is a visible deterrent, whereas the Club is invisible to car thieves. b. LoJack customers must agree not to display any window stickers or other signs that indicate their cars are LoJack- equipped. This agreement enhances LoJack's value as a general deterrent, since c. While car drivers are probably buying the socially optimal quantity of the Club, too few drivers are probably installing LoJack, since O LoJack produces positive externalities. O the government heavily taxes purchases of LoJack. O LoJack produces negative externalities. O the government subsidizes purchases of the Club but not LoJack
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