Nash Implementable Liability Rules for Judgement-Proof Injurers
AbstractI provide a complete characterization of Nash implementable allocations of spending in prevention by judgement-proof injurers. This characterization is used to identify the optimal rule that allows for the maximum total spending in prevention. The optimal rule amounts to apply the negligence rule to the "deep-pocket" (or the "victim"), that is the injurer who responds the most to monetary incentives under the strict liability rule, and the strict liability rule to everybody else.
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Bibliographic InfoPaper provided by Université Laval - Département d'économique in its series Cahiers de recherche with number 0403.
Date of creation: 2004
Date of revision:
Negligence rule; limited liability; multiple injurers; Nash implementation;
Find related papers by JEL classification:
- D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
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