Caution, children crossing: Heterogeneity of victim's cost of care and negligence rule

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Review of Law & Economics, 1 (2006), 3, pp. 3
To cite or link this document: Ganuza, Juan-José Gómez, Fernando
dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa 2002-12-01
dc.identifier.citation Review of Law & Economics, 1 (2006), 3, pp. 3
dc.description.abstract The paper deals with a bilateral accident situation in which victims have heterogeneous costs of care. With perfect information,efficient care by the injurer raises with the victim's cost. When the injurer cannot observe at all the victim's type, and this fact can be verified by Courts, first-best cannot be implemented with the use of a negligence rule based on the first-best levels of care. Second-best leads the injurer to intermediate care, and the two types of victims to choose the best response to it. This second-best solution can be easily implemented by a negligence rule with second-best as due care. We explore imperfect observation of the victim's type, characterizing the optimal solution and examining the different legal alternatives when Courts cannot verify the injurers' statements. Counterintuitively, we show that there is no difference at all between the use by Courts of a rule of complete trust and a rule of complete distrust towards the injurers' statements. We then relate the findings of the model to existing rules and doctrines in Common Law and Civil Law legal systems.
dc.language.iso eng
dc.relation.ispartofseries Economics and Business Working Papers Series; 666
dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
dc.title Caution, children crossing: Heterogeneity of victim's cost of care and negligence rule
dc.type info:eu-repo/semantics/workingPaper 2014-06-03T07:14:08Z
dc.subject.keyword Business Economics and Industrial Organization
dc.subject.keyword imperfect information
dc.subject.keyword negligence rule
dc.subject.keyword accidents
dc.subject.keyword heterogeneous victims
dc.rights.accessRights info:eu-repo/semantics/openAccess

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