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  • Shared Liability - Final

    Rights statement: This is a pre-copy-editing, author-produced PDF of an article accepted for publication in The Jounral of Law, Economics and Organization following peer review. The definitive publisher-authenticated version Ehud Guttel, Yuval Procaccia, Eyal Winter, Shared Liability and Excessive Care, The Journal of Law, Economics, and Organization, Volume 37, Issue 2, July 2021, Pages 358–391, https://doi.org/10.1093/jleo/ewaa016 is available online at: https://academic.oup.com/jleo/article-abstract/37/2/358/5993028

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Shared Liability and Excessive Care

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<mark>Journal publication date</mark>31/07/2021
<mark>Journal</mark>The Journal of Law, Economics, and Organization
Issue number2
Volume37
Number of pages34
Pages (from-to)358-391
Publication StatusPublished
Early online date20/11/20
<mark>Original language</mark>English

Abstract

The following supplements the discussion of a number of issues addressed in the main text. We begin by providing an example illustrating the significance of residual risk for the emergence of an excessive care equilibrium under strict liability. Second, we provide a complete proof for Proposition 2, demonstrating that excessive care may emerge as a unique equilibrium under strict liability. Third, we provide a proof for Corollary 4', establishing that the conditions stated in Proposition 4' support a large set of primitives. Finally, we discuss the Excessive Care Defense and the Efficient Strict Liability Rule within the context of the continuous model. We show that the Excessive Care Defense eliminates the equilibrium of excessive care, and that the Efficient Strict Liability Rule concurrently solves both problems of over-investment and under-investment.

Bibliographic note

This is a pre-copy-editing, author-produced PDF of an article accepted for publication in The Jounral of Law, Economics and Organization following peer review. The definitive publisher-authenticated version Ehud Guttel, Yuval Procaccia, Eyal Winter, Shared Liability and Excessive Care, The Journal of Law, Economics, and Organization, Volume 37, Issue 2, July 2021, Pages 358–391, https://doi.org/10.1093/jleo/ewaa016 is available online at: https://academic.oup.com/jleo/article-abstract/37/2/358/5993028