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Limiting Limited Liability

Author

Listed:
  • Guiseppe Dari-Mattiacci

    (ACLE, Universiteit van Amsterdam, and George Mason University, Arlington, Virginia, USA)

Abstract

Limited liability may result in inefficient accident prevention, because a relevant portion of the expected harm is externalized on victims. This paper shows that under some restrictive conditions further limiting liability by means of a liability cap can improve caretaking.

Suggested Citation

  • Guiseppe Dari-Mattiacci, 2006. "Limiting Limited Liability," Tinbergen Institute Discussion Papers 06-070/1, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20060070
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    File URL: https://papers.tinbergen.nl/06070.pdf
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    References listed on IDEAS

    as
    1. Dari-Mattiacci, Giuseppe & De Geest, Gerrit, 2006. "When will judgment proof injurers take too much precaution?," International Review of Law and Economics, Elsevier, vol. 26(3), pages 336-354, September.
    2. T. Randolph Beard, 1990. "Bankruptcy and Care Choice," RAND Journal of Economics, The RAND Corporation, vol. 21(4), pages 626-634, Winter.
    3. Boyd, James & Ingberman, Daniel E., 1999. "Do punitive damages promote deterrence?1," International Review of Law and Economics, Elsevier, vol. 19(1), pages 47-68, March.
    4. Craswell, Richard & Calfee, John E, 1986. "Deterrence and Uncertain Legal Standards," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 2(2), pages 279-303, Fall.
    5. Mattiacci, Giuseppe Dari & Parisi, Francesco, 2003. "The cost of delegated control: vicarious liability, secondary liability and mandatory insurance," International Review of Law and Economics, Elsevier, vol. 23(4), pages 453-475, December.
    6. Boyd, James & Ingberman, Daniel E, 1994. "Noncompensatory Damages and Potential Insolvency," The Journal of Legal Studies, University of Chicago Press, vol. 23(2), pages 895-910, June.
    7. Giuseppe Dari-Mattiacci, 2006. "Limiting Limited Liability," Economics Bulletin, AccessEcon, vol. 11(1), pages 1-7.
    8. Shavell, S., 1986. "The judgment proof problem," International Review of Law and Economics, Elsevier, vol. 6(1), pages 45-58, June.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Gérard Mondello, 2017. "Lenders and Risky Activities: Strict Liability or Negligence Rule?," GREDEG Working Papers 2017-13, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    2. Giuseppe Dari-Mattiacci, 2006. "Limiting Limited Liability," Economics Bulletin, AccessEcon, vol. 11(1), pages 1-7.
    3. Gérard Mondello, 2010. "Risky Activities and Strict Liability Rules: Delegating Safety," Working Papers 2010.103, Fondazione Eni Enrico Mattei.
    4. Gérard Mondello, 2012. "Strict Liability, Capped Strict Liability, and Care Effort under Asymmetric Information," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 168(2), pages 232-251, June.
    5. Giuseppe Dari‐Mattiacci & Barbara M. Mangan, 2008. "Disappearing Defendants versus Judgment‐Proof Injurers," Economica, London School of Economics and Political Science, vol. 75(300), pages 749-765, November.

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    More about this item

    Keywords

    insolvency; judgment proof; liability; bankruptcy; liability cap;
    All these keywords.

    JEL classification:

    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • L59 - Industrial Organization - - Regulation and Industrial Policy - - - Other

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