Optimal Assignment of Liabilities
I characterize a generalization of the negligence rule to assign compensating damages in an accident involving multiple tortfeasors. These tortfeasors have the opportunity to undertake spending in prevention and the rule is designed to provide them with the best incentives to do so. I study the case where liability is constraint in the sense that the optimal amount of effort (not constrained by liability) cannot be implemented. The optimal multi-player rule is to apply the negligence rule to the most liable player (the "deep-pocket" or the "victim", defined as the player who is the most responsive to monetary incentives under the strict liability rule) and the strict liability rule to everybody else.
|Date of creation:||2003|
|Date of revision:|
|Contact details of provider:|| Postal: Bureau 2245, Pavillon J.-A.-DeSève, Québec (Québec) G1K 7P4|
Phone: (418) 656-2096
Fax: (418) 656-7412
Web page: http://www.green.ecn.ulaval.ca
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kornhauser, Lewis A. & Revesz, Richard L., 1989. "Apportioning Damages Among Potentially Insolvent Actors," Working Papers 89-22, C.V. Starr Center for Applied Economics, New York University.
- Winand Emons & Joel Sobel, 1991.
"On the Effectiveness of Liability Rules when Agents are not Identical,"
Review of Economic Studies,
Oxford University Press, vol. 58(2), pages 375-390.
- Emons,Winand & Sobel,Joel, 1988. "On the effectiveness of liability rules when agents are not identical," Discussion Paper Serie A 212, University of Bonn, Germany.
- Kornhauser, Lewis A & Revesz, Richard L, 1990. "Apportioning Damages among Potentially Insolvent Actors," The Journal of Legal Studies, University of Chicago Press, vol. 19(2), pages 617-51, June.
- Grady, Mark F, 1990. "Multiple Tortfeasors and the Economy of Prevention," The Journal of Legal Studies, University of Chicago Press, vol. 19(2), pages 653-78, June.
- Ulrich Hege & Eberhard Feess, 1998.
"Efficient Liability Rules for Multi-Party Accidents with Moral Hazard,"
- Eberhard Feess & Ulrich Hege, 1998. "Efficient Liability Rules for Multi-Party Accidents With Moral Hazard," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 154(2), pages 422-450, June.
- Hege, U. & Feess, E., 1998. "Efficient liability rules for multi-party accidents with moral hazard," Other publications TiSEM e216300c-126c-4e48-ad1f-2, Tilburg University, School of Economics and Management.
- Steven Shavell, 2003.
"Economic Analysis of Accident Law,"
NBER Working Papers
9694, National Bureau of Economic Research, Inc.
- Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
- Warr, Peter G., 1983. "The private provision of a public good is independent of the distribution of income," Economics Letters, Elsevier, vol. 13(2-3), pages 207-211.
- Kornhauser, Lewis A & Revesz, Richard L, 1994. "Multidefendant Settlements under Joint and Several Liability: The Problem of Insolvency," The Journal of Legal Studies, University of Chicago Press, vol. 23(1), pages 517-42, January.
When requesting a correction, please mention this item's handle: RePEc:lvl:lagrcr:0305. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Manuel Paradis)
If references are entirely missing, you can add them using this form.