You've just acquired a sweet new ride and are trying to determine how to protect your wheels from theft. You're consideringpurchasing 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 Lolack, a hidden electronic device that allows law enforcement agencies to locateyour car should you notify them of its theft.a. Why is the Club more likely than LoJack to directly deter thefts?The external benefits of the Club exceed those of Lolack.O Lolack is a visible deterrent, whereas the Club is invisible to car thieves.O The Club is a visible deterrent, whereas Lolack is invisible to car thieves.O Thieves are more responsive to traditional theft deterrents, such as locks, than modern ones that involve digitaltechnology.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, sincec. While car drivers are probably buying the socially optimal quantity of the Club, too few drivers are probably installingLolack, sincethe government subsidizes purchases of the Club but not Lolack.

Theft is a kind of crime that is committed by stealing things. It is a punishable offense. People…

Answered: You've just acquired a sweet new ride…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter9: Decision Making Under Uncertainty

Section: Chapter Questions

Problem 73P

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