Abstract

http://ssrn.com/abstract=688127
 
 

References (8)



 
 

Citations (4)



 


 



A Damage-Revelation Rationale for Coupon Remedies


A. Mitchell Polinsky


Stanford Law School; National Bureau of Economic Research (NBER)

Daniel L. Rubinfeld


University of California at Berkeley - School of Law; National Bureau of Economic Research (NBER); NYU Law School

March 2005

Stanford Law and Economics Olin Working Paper No. 302

Abstract:     
This article studies optimal remedies in a setting in which damages vary among plaintiffs and are difficult to determine. We show that giving plaintiffs a choice between cash and coupons to purchase units of the defendant's product at a discount - a "coupon-cash remedy" - is superior to cash alone. The optimal coupon-cash remedy offers a cash amount that is less than the value of the coupons to plaintiffs who suffer relatively high harm. Such a remedy induces these plaintiffs to choose coupons, and plaintiffs who suffer relatively low harm to choose cash. Sorting plaintiffs in this way leads to better deterrence because the costs borne by defendants (the cash payments and the cost of providing coupons) more closely approximate the harms that they have caused.

Number of Pages in PDF File: 16

Keywords: class action remedies, coupons, damage revelation, accuracy

JEL Classification: D18, D82, D83, H23, K19, K41

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Date posted: March 17, 2005  

Suggested Citation

Polinsky, A. Mitchell and Rubinfeld, Daniel L., A Damage-Revelation Rationale for Coupon Remedies (March 2005). Stanford Law and Economics Olin Working Paper No. 302. Available at SSRN: http://ssrn.com/abstract=688127 or http://dx.doi.org/10.2139/ssrn.688127

Contact Information

A. Mitchell Polinsky (Contact Author)
Stanford Law School ( email )
559 Nathan Abbott Way
Stanford, CA 94305-8610
United States
650-723-0886 (Phone)
650-723-3557 (Fax)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Daniel L. Rubinfeld
University of California at Berkeley - School of Law ( email )
215 Boalt Hall
Berkeley, CA 94720-7200
United States
(510) 642-1959 (Phone)
(510) 642-3767 (Fax)
HOME PAGE: http://www.law.berkeley.edu/faculty/rubinfeldd
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
NYU Law School ( email )
44 West Fourth Street, Suite 9-53
New York, NY 10012-1126
United States
(212) 992 8834 (Phone)
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