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Several liability with sequential care: an experiment

Author

Listed:
  • Julien Jacob

    (University of Strasbourg, University of Lorraine, CNRS, BETA)

  • Eve-Angéline Lambert

    (University of Lorraine, University of Strasbourg, CNRS, BETA)

  • Emmanuel Peterle

    (CRESE EA3190)

Abstract

By a laboratory experiment, we investigate the incentives of potential tortfeasors to make investments in order to reduce the probability of a given harm occurring. In our experiment, paired players make their decisions sequentially, i.e., a la Stackelberg and in case of a harm, they share liability, either symmetrically or asymmetrically. We vary their level of endowments so that one can become insolvent in case of harm, and show that subjects do not behave as predicted, due to considerations such as inequity aversion or reciprocity. We find that the first-acting tortfeasor does not exploit their advantage fully and invests much more than predicted. Our results also show that the second-acting tortfeasor acts reciprocally with the other, rather than rationally opting for their best response. Finally, we show that asymmetric liability apportionment may restore the incentives to invest for the first tortfeasor, and that insolvency of the second one pushes the first to overinvest in order to avoid harm.

Suggested Citation

  • Julien Jacob & Eve-Angéline Lambert & Emmanuel Peterle, 2022. "Several liability with sequential care: an experiment," European Journal of Law and Economics, Springer, vol. 54(2), pages 283-326, October.
    • Handle: RePEc:kap:ejlwec:v:54:y:2022:i:2:d:10.1007_s10657-022-09740-x
    DOI: 10.1007/s10657-022-09740-x
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    More about this item

    Keywords

    Sequential harm; Liability apportionment; Insolvency; Stackelberg game;
    All these keywords.

    JEL classification:

    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

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