Sequential torts and bilateral harm |
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Authors: | Tim Friehe |
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Affiliation: | Eberhard Karls University, Department of Economics, Melanchthonstr. 30, 72074 Tübingen, Germany |
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Abstract: | This paper analyzes care incentives of individuals in a bilateral-harm setting if care choices are sequential. We find that the efficient outcome is not guaranteed under any liability rule considered, irrespective of whether information is perfect or imperfect. Furthermore, it is no longer possible to generally rank liability rules according to their induced social costs. These findings are in strong contrast to the sequential-torts setting in which harm is unilateral. |
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