If a patient who was injured and is thinking about whether or not to file a medical malpractice claim against his doctor. He is considered a "rational" decision maker in the sense that he decides whether or not to file a claim based on his prediction of returns versus costs if he files.
0 represent the probability of eventually receiving compensation if he files
V represents the size of payment conditional on receiving any compensation
C represents the cost of filing and pursuing a claim.
How do you determine the expected value (payoff) of the claim to the injured victim at filing