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Social Wealth and Optimal Care

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  • Giuseppe Dari-Mattiacci
  • Eric Langlais

Abstract

Many industrial accidents result in losses (material damages or bodily injury) that cannot be perfectly compensated by a monetary payment, nor be perfectly insured. Moreover, often injurers control ex ante the magnitude rather than the probability of accidents. We study the characteristics of optimal levels of care and distribution of risk under these circumstances. We then examine whether ordinary liability rules, regulation, insurance, taxes and subsidies can be used to implement the first-best outcome. Finally, our results are discuss in the light of fairness considerations (second best view).

Suggested Citation

  • Giuseppe Dari-Mattiacci & Eric Langlais, 2008. "Social Wealth and Optimal Care," EconomiX Working Papers 2008-34, University of Paris Nanterre, EconomiX.
    • Handle: RePEc:drm:wpaper:2008-34
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    References listed on IDEAS

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    2. Yoed Halbersberg, 2010. "Liability Standards for Multiple-Victim Torts: A Call for a New Paradigm," Discussion Paper Series dp533, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.

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    More about this item

    Keywords

    accidents; risk; wealth; care; bodily injury;
    All these keywords.

    JEL classification:

    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics

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