Liability rules can rationalize greater victim vulnerability

Tim Friehe, Avraham Tabbach

Research output: Contribution to journalArticlepeer-review

Abstract

This paper shows that an imperfect strict liability rule can induce victims to increase the losses they incur in the event of an accident, and that similar incentives exist under the negligence rule. Using a simple model in which victims can influence their harm distribution, we identify two potential reasons why victims may benefit from greater ‘vulnerability’, namely strategic effects on own future and others’ behaviour.

Original languageEnglish
Pages (from-to)1825-1829
Number of pages5
JournalApplied Economics Letters
Volume28
Issue number21
DOIs
StatePublished - 2021

Keywords

  • Activity
  • Care
  • Liability

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