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A special case of self-protection: The choice of a lawyer

Author

Listed:
  • Benoît Sévi

    (LASER-CREDEN Université de Montpellier)

  • Fabrice Yafil

    (LAMETA Université de Montpellier)

Abstract

Considering self-protection, it is a well-known result that an increase in risk aversion does not unambiguously lead to a higher level of effort. In this paper, we consider a particular case of self-protection, the choice of a lawyer, assuming a positive relation between legal expenses and probability of success. In this context, level of effort is strictly monotone in risk aversion. We show that, paradoxically, the level of effort is not systematically higher for an indemnified more risk-averse agent than for a non-indemnified less risk-averse agent.

Suggested Citation

  • Benoît Sévi & Fabrice Yafil, 2005. "A special case of self-protection: The choice of a lawyer," Economics Bulletin, AccessEcon, vol. 4(6), pages 1-8.
    • Handle: RePEc:ebl:ecbull:eb-05d80011
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    References listed on IDEAS

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    3. Biswas, Rongili & Marchese, Carla & Privileggi, Fabio, 2009. "Tax evasion in a principal-agent model with self-protection," POLIS Working Papers 138, Institute of Public Policy and Public Choice - POLIS.

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    More about this item

    Keywords

    increase in risk aversion;

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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