Damages

About: Damages is a research topic. Over the lifetime, 9365 publications have been published within this topic receiving 89750 citations. The topic is also known as: compensation award.

Hurricane Katrina: Preliminary Estimates of Commercial and Public Sector Damages

Abstract: Hurricane Katrina's impact on the economy and infrastructure of Louisiana, Mississippi and Alabama represents an immediate concern to commercial enterprises, area residents, and policymakers at all levels. Understanding the severity of the damages and the magnitude of the recovery efforts are important for both private and public decision makers deploying resources in the affected area. This paper provides initial estimates of damages in a number of infrastructure categories and residential and commercial structures, content and equipment. The estimation is based upon earlier analysis (Burton and Hicks, 2003) which provided an economic model of damages based upon the upper Mississippi floods of 1993. Specifically we estimate that Hurricane Katrina has generated commercial structure damages of $21 Billion, commercial equipment damages of $36 Billion, residential structure and content damages of almost $75 Billion, electric utility damages of $231 Million, highway damages of $3 Billion, sewer system damages of $1.2 Billion and commercial revenue losses of $4.6 Billion. We are unable to estimate water system, and some key infrastructure damages at this point, and have not included the economic consequences of the loss of life or damage to the regions environmental amenities.

Outside director liability

Abstract: Outside directors can fail to do a good job, sometimes spectacularly. Yet outside directors of U.S. public companies who fail to meet what we call their "vigilance duties" under corporate, securities, bankruptcy, environmental, and other laws almost never face personal liability. This paper describes the almost impenetrable windows within which outside directors may be personally liable for good faith conduct. The principal liability window is under securities law, for a seriously rich (hence worth chasing) director of an insolvent company, where damages exceed the DO barely open under securities law, but only if the firm is bankrupt -maps poorly (we argue) onto the policy factors that should inform director liability. We therefore consider whether the right policy move is toward greater liability of outside directors under corporate law, less liability under securities law, or some of both. We conclude that neither move will make a large difference in practice, given the mediating effects of insurance, indemnification, and settlement incentives. In a companion paper, Bernard Black & Brian Cheffins, Outside Director Liability and Reputational Sanctions Across Countries, we argue that a barely open liability window is likely to be a stable solution, both politically and in the D&O insurance market, and that a barely open window may strike a sensible balance between wanting directors to be aware of potential liability while wanting good candidates to neither avoid becoming directors nor to be overly risk-averse. The details of the window's shape may have only a second-order effect on director behavior.

Post-cartel pricing during litigation

Abstract: Standard methods in the U.S. for calculating antitrust damages in price-fixing cases are shown to create a strategic incentive for firms to price above the non-collusive price after the cartel has been dissolved. This results in an overestimate of the but for price and an underestimate of the level of damages. The extent of this upward bias in the but for price is greater, the longer the cartel was in place and the more concentrated the industry.

Measuring Economic Impacts of Disasters: Interregional Input-Output Analysis Using Sequential Interindustry Model

Abstract: The damages and losses by disasters, such as earthquakes, floods, tornadoes, and other major natural disasters, or man-made disasters, have significant and intense impacts on a region’s economy. In addition, the impacts from the damages will spread over time, and will bring serious economic effects to other regions in a long run. Furthermore, the impacts of disasters are very complex, including not only the negative effects from damages and losses, but also the positive economic effects from the recovery and reconstruction activities. Most economic models and techniques cannot confront these significant changes in a relatively short time period, since they assume incremental, and/or predictable changes in systems over time. And, the unexpected nature of these events, especially in the case of earthquakes, creates a further complication of measuring the indirect impacts (Okuyama et al., 2002). At the same time, most available data for the direct damages and losses and of the recovery processes are engineering oriented, i. e., physical damages and disruption of lifelines and their repair and restoration, and the dimension and unit of these data are quite different from the economic counterpart—very detailed and short time span in engineering data while aggregated and longer time span in economic models. Consequently, these differences pose great challenges in order to model economic impacts of disasters.

Products Liability, Consumer Misperceptions, and Market Power

Abstract: This paper compares alternative liability rules for allocating losses from defective products when consumers under- estimate these losses and producers may have some market power. If producers do not have any market power, the rule of strict liability .leads to both the first-best accident probability and industry output. If producers do have some market power, strict liability still leads to the first-best accident probability, but there will now be too little output of the industry. It is shown that if market power is sufficiently large, a negligence rule is preferable. Under this rule, firms can still be induced to choose the first-best accident probability, but now the remaining damages are borne by consumers. Since consumers underestimate these damages, they buy more than under strict liability. However, there is a limit to how much the negligence rule can encourage extra consumption. It is shown that if market power is sufficiently large, the rule of no liability may then be preferred to the negligence rule. Without any liability imposed, producers will not choose the first-best accident probability. However, this may be more than compensated for by the increased output of the industry.