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Un effet pervers de la responsabilité limitée

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  • Sandrine Ollier

Abstract

Although legal restrictions limiting the workers’ liability are made to increase their welfare, we show that they may lead to a perverse effect when more productive workers cross subsidize less productive workers. A generalized agency model is analyzed and used to show that exonerating a wealthy agent from liability for damages caused during the execution of the contract decreases the more productive workers’ expected utility in the pooling equilibrium of the combined model.

Suggested Citation

  • Sandrine Ollier, 2006. "Un effet pervers de la responsabilité limitée," Recherches économiques de Louvain, De Boeck Université, vol. 72(3), pages 265-286.
  • Handle: RePEc:cai:reldbu:rel_723_0265
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    References listed on IDEAS

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    6. Peter S. Faynzilberg & Praveen Kumar, 2000. "original papers : On the generalized principal-agent problem: Decomposition and existence results," Review of Economic Design, Springer;Society for Economic Design, vol. 5(1), pages 23-58.
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    8. Faynzilberg, Peter S. & Kumar, Praveen, 1997. "Optimal Contracting of Separable Production Technologies," Games and Economic Behavior, Elsevier, vol. 21(1-2), pages 15-39, October.
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