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Imagine you own a store, and a man trips inside it. He sues you for $40,000 for negligence. Both your lawyer and his lawyer agree there is a 60% chance the lawsuit will be successful, but both of you will have to pay your attorneys $10,000 regardless of the outcome. How should we expect this matter to resolve itself?

Surprisingly, this lawsuit is analogous to war--both are costly and the winners are determined probabilistically if bargaining breaks down.

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