Abstract

http://ssrn.com/abstract=1853423
 
 

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Loss Sharing between Non-Negligent Parties


Giuseppe Dari-Mattiacci


University of Amsterdam - Amsterdam Center for Law and Economics (ACLE); Tinbergen Institute

Bruno Lovat


University of Lorraine - Universite Nancy 2

Francesco Parisi


University of Minnesota - Law School; University of Bologna

May 26, 2011

Amsterdam Law School Research Paper No. 2011-07
Amsterdam Center for Law & Economics Working Paper No. 2011-08
Minnesota Legal Studies Research Paper No. 11-24

Abstract:     
In 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.

Number of Pages in PDF File: 32

Keywords: tort, loss-sharing, negligence, strict liability, comparative fault

JEL Classification: K13, K32

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Date posted: May 31, 2011 ; Last revised: September 13, 2011

Suggested Citation

Dari-Mattiacci, Giuseppe and Lovat, Bruno and Parisi, Francesco, Loss Sharing between Non-Negligent Parties (May 26, 2011). Amsterdam Law School Research Paper No. 2011-07; Minnesota Legal Studies Research Paper No. 11-24. Available at SSRN: http://ssrn.com/abstract=1853423 or http://dx.doi.org/10.2139/ssrn.1853423

Contact Information

Giuseppe Dari-Mattiacci (Contact Author)
University of Amsterdam - Amsterdam Center for Law and Economics (ACLE) ( email )
Roeterstraat 11
Amsterdam, 1018WB
Netherlands
HOME PAGE: http://darimattiacci.acle.nl
Tinbergen Institute
Roetersstraat 31
Amsterdam, 1018 WB
Netherlands
HOME PAGE: http://scholar.google.com/citations?user=AuUfjxUAAAAJ&hl=en
Bruno Lovat
University of Lorraine - Universite Nancy 2 ( email )
Nancy
France
Francesco Parisi
University of Minnesota - Law School ( email )
229 19th Avenue South
Minneapolis, MN 55455
United States
University of Bologna ( email )
Piazza Scaravilli 1
40126 Bologna, fc 47100
Italy
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