A note on judgment proofness and risk aversion

Shavell (Int Rev Law Econ 6:45–58, 1986) established that potentially judgment-proof injurers will take less care than injurers with sufficient funds in the case of strict liability. This note considers strict liability and shows that the reverse may hold if individuals are risk averse, i.e., some potentially judgment-proof injurers expend more on care than some injurers with assets greater than the harm. I am indebted to Florian Baumann, Laszlo Goerke, and an anonymous referee for very helpful suggestions.