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Query: faculty: "FEB" and publication year: "2011"

AuthorsG. Dari-Mattiacci, B. Lovat, F. Parisi
TitleLoss sharing between non-negligent parties
PublisherAmsterdam Center for Law & Economics, University of Amsterdam
Title seriesAmsterdam Center for Law & Economics working paper
Series number2011-08
FacultyFaculty of Economics and Business
Institute/dept.FEB: Amsterdam Business School Research Institute (ABS-RI)
AbstractIn this paper, we study the effects and desirability of legal rules that allow the sharing of an accident loss between a non-negligent injurer and his non-negligent victim. In order to identify the virtues and limits of loss-sharing rules, we begin by considering the effect of a loss-sharing regime on parties' incentives. We address an unresolved issue in the literature, exploring whether loss-sharing in equilibrium undermines the parties' primary care incentives. We establish the conditions under which loss-sharing may be desirable and characterize the regime providing the best overall incentives to minimize the social cost of accidents. Our results indicate that loss-sharing may indeed be desirable in a vast range of situations. The results are later extended to consider the effect of parties' uncertainty in a loss-sharing regime and reveal that loss-sharing may at the same time be desirable and unnecessary in real-life accident law.
NoteAlso: Minnesota Legal Studies research paper No. 11-24 and Amsterdam Law School legal studies research paper No. 2011-07. - May 23, 2011.
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