Judgment Proofness Under Four Different Precaution Technologies

Journal of Institutional and Theoretical Economics, Vol. 161, No. 1, pp. 38-56, March 2005

George Mason Law & Economics Research Paper No. 04-03

Tjalling C. Koopmans Research Institute Discussion Paper Series No. 03-16

24 Pages Posted: 27 Dec 2003  

Giuseppe Dari‐Mattiacci

Amsterdam Law School; Amsterdam Business School; Tinbergen Institute

Gerrit De Geest

Washington University in St. Louis - School of Law

Abstract

This study shows that the effects of judgment proofness on precaution depend on whether the injurer can reduce the probability of the accident, the magnitude of the harm, or both. Different legal solutions to the problem are examined: punitive damages, average compensation, undercompensation, accurate compensation and negligence. We find that when the injurer can only reduce the probability of the accident, negligence with average compensation is the best solution, but negligence with perfectly compensatory damages is the desirable solution if the injurer can only or also affect the magnitude of the harm.

Keywords: Insolvency, judgment proof, liability, bankruptcy

JEL Classification: K13, K32

Suggested Citation

Dari‐Mattiacci, Giuseppe and De Geest, Gerrit, Judgment Proofness Under Four Different Precaution Technologies. Journal of Institutional and Theoretical Economics, Vol. 161, No. 1, pp. 38-56, March 2005; George Mason Law & Economics Research Paper No. 04-03; Tjalling C. Koopmans Research Institute Discussion Paper Series No. 03-16. Available at SSRN: https://ssrn.com/abstract=480441 or http://dx.doi.org/10.2139/ssrn.480441

Giuseppe Dari-Mattiacci

Amsterdam Law School ( email )

Amsterdam, 1018 WB
Netherlands

HOME PAGE: http://www.uva.nl/en/profile/d/a/g.darimattiacci/g.darimattiacci.html

Amsterdam Business School ( email )

Roetersstraat 18
Amsterdam, 1018WB
Netherlands

Tinbergen Institute

Gustav Mahlerplein 117
Amsterdam, 1082 MS
Netherlands

Gerrit De Geest (Contact Author)

Washington University in St. Louis - School of Law ( email )

Campus Box 1120
St. Louis, MO 63130
United States
314-398-4941 (Phone)

HOME PAGE: http://www,degeest.wustl..edu

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