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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Final published version
Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
}
TY - JOUR
T1 - Shared Liability and Excessive Care
AU - Guttel, E.
AU - Procaccia, Y.
AU - Winter, E.
N1 - 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
PY - 2021/7/31
Y1 - 2021/7/31
N2 - 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.
AB - 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.
U2 - 10.1093/jleo/ewaa016
DO - 10.1093/jleo/ewaa016
M3 - Journal article
VL - 37
SP - 358
EP - 391
JO - The Journal of Law, Economics, and Organization
JF - The Journal of Law, Economics, and Organization
SN - 8756-6222
IS - 2
ER -