Abstract
This paper studies a unilateral accident model in which potentially judgment-proof agents (agents who may have insufficient assets to satisfy a judgment against them) choose levels of both monetary and nonmonetary care. We show that (i) monetary care may exceed its first-best level under both strict liability and negligence, (ii) social costs may be lowered by the incentive effects resulting from the monetary nature of care, (iii) an increase in the assets of potentially judgment-proof injurers may increase social costs, and (iv) one second-best due-care standard may be in excess of the efficient care level.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: Journal of Institutional and Theoretical Economics
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
