IDEAS home Printed from https://ideas.repec.org/a/pal/genrir/v15y1990i2p159-169.html
   My bibliography  Save this article

The Double Liability Rule*

Author

Listed:
  • Jörg Finsinger

    (University of Hohenheim, Stuttgart)

  • Mark V. Pauly

    (University of Pennsylvania)

Abstract

Conventional liability rules do not lead to a first best allocation. Optimal bilateral risk control can be achieved by not compensating any losses and, in addition, charging each party a fine equal to the loss suffered by the other party. In this way, each party internalizes the full accident loss. This paper investigates the properties of this “double liability†rule under risk neutrality and risk aversion of the parties. Finally the use of this rule in the context of multiple-party accidents is discussed. The Geneva Papers on Risk and Insurance Theory (1990) 15, 159–169. doi:10.1007/BF01489707

Suggested Citation

  • Jörg Finsinger & Mark V. Pauly, 1990. "The Double Liability Rule*," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 15(2), pages 159-169, September.
    • Handle: RePEc:pal:genrir:v:15:y:1990:i:2:p:159-169
    as

    Download full text from publisher

    File URL: http://www.palgrave-journals.com/grir/journal/v15/n2/pdf/grir19909a.pdf
    File Function: Link to full text PDF
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: http://www.palgrave-journals.com/grir/journal/v15/n2/full/grir19909a.html
    File Function: Link to full text HTML
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kirstein, Roland, 2004. "Anti-Teilen in Teams," CSLE Discussion Paper Series 2004-04, Saarland University, CSLE - Center for the Study of Law and Economics.
    2. Goerke Laszlo, 2002. "Accident Law: Efficiency May Require an Inefficient Standard," German Economic Review, De Gruyter, vol. 3(1), pages 43-51, February.
    3. Ralf Ewert & Eberhard Feess & Martin Nell, 2000. "Auditor liability rules under imperfect information and costly litigation: the welfare-increasing effect of liability insurance," European Accounting Review, Taylor & Francis Journals, vol. 9(3), pages 371-385.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:genrir:v:15:y:1990:i:2:p:159-169. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave-journals.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.