Journal ArticleDOI
Limited liability and incentives when firms can inflict damages greater than net worth
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This article is published in International Review of Law and Economics.The article was published on 1993-09-01. It has received 27 citations till now. The article focuses on the topics: Damages & Net worth.read more
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Limited liability and the requirement to purchase insurance
TL;DR: In this article, the authors seek to answer the question whether or not compulsory liability insurance can eliminate the distortions caused by limited liability of potential injurers, and they argue that the externalities due to the injurers' lack of assets may be alleviated if insurance coverage is mandatory.
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Environmental risk and extended liability: The case of green technologies
Georges Dionne,Sandrine Spaeter +1 more
TL;DR: In this article, the effect of extending environmental risk to banks was analyzed and it was shown that partial extended liability improves social welfare, while full extended liability does not, and that extended liability always leads to an increased probability of bankruptcy for the firm.
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Extended liability for environmental accidents: what you see is what you get
TL;DR: In this paper, the authors show that when the firm can take both observable and unobservable care to reduce expected accident damages, extended liability indeed results in full cost internalization, but not in first-best levels of care.
Mandatory insurance: transaction costs analysis of insurance
TL;DR: In this paper, the authors present a review of the established approach to insurance and liability, focusing on the law and economics aspects of property and liability insurance, which the standard risk-aversion theory fails to explain.
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Liability and organizational choice
TL;DR: In this paper, a simple model of organizational decision making with judgment-proof firms is developed and applied to the oil industry, where contracting out decreased in response to heightened liability following the Exxon Valdez oil spill.
References
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Journal ArticleDOI
Strict Liability versus Negligence
TL;DR: In this article, the authors compared strict liability and negligence rules on the basis of the incentives they provide to "appropriately" reduce accident losses, and showed that under the negligence rule, restaurants will decide to avoid liability by taking appropriate precautions to prepare meals under sanitary conditions.
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The Judgment Proof Problem
TL;DR: In this article, the authors consider the possibility that individuals who cause personal injury or property damage may be found to be "judgment proof", that is, unable to pay fully the amount for which they have been found legally liable.
Posted Content
Strict Liability Versus Negligence
Steven Shavell,Steven Shavell +1 more
TL;DR: In this article, the authors compare strict liability and negligence rules on the basis of the incentives the provide to "appropriately" reduce accident losses, and the welfare criterion is taken to be the following aggregate: the benefits derived by parties from engaging activities less total accident losses and total accident prevention costs.
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Constitutions, Statutes, and the Theory of Efficient Adjudication
TL;DR: The authors formulate an economic theory of public law adjudication, corresponding to the economic theories of the common law propounded by Richard Posner and others, and provide an account of rationally self-interested judicial behavior that might explain the observed regularity.
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Tort Law as a Regulatory Regime for Catastrophic Personal Injuries
TL;DR: In this paper, the authors focus on the "catastrophic" accident, defined as an accident in which a number of victims are killed or seriously injured, and the existence of multiple victims makes it less likely that the injurer can pay all the accident claims than is the case in a single-victim accident.