Question: 1. By setting fees for appealing, the state can discourage appeals with low probability of success. Construct a numerical example to illustrate this fact.
2. Appeals are often subsidized in the sense that the state bears part of the litigation costs. Use the preceding theory to construct a justification of state subsidies for appeals.
3. Assume that delay is more costly to the plaintiff than the defendant. How does the possibility of appealing an adverse court decision, which delays resolution of the case, affect bargaining between the parties to settle the dispute out of court?