IDEAS home Printed from https://ideas.repec.org/p/ift/wpaper/2157.html
   My bibliography  Save this paper

Decomposition of accident loss and decoupled liability assignment: A class of negligencerules

Author

Listed:
  • Papiya Ghosh

    (Indian Institute of Foreign Trade,New Delhi,India)

  • Rajendra P. Kunda

    (Jawaharlal Nehru University, New Delhi, India)

Abstract

This paper is a contribution to the literature on efficient assignment of liabilities for accidental losses arising out of two party interactions involving negative externalities.The objective is to examine the requirements that eciency imposes on rules for the assignment of liabilities for such losses. We study efficiency proper ties of a very general class o frules which (i) decompose the loss into two components (speciied loss and excess loss); (ii)assigns the entire excess loss to the injurer if she is negligent and to the victim otherwise; and assign fixed proportions (not necessarily adding upto 1) of the specified loss to the two parties with the possibility of eventually resulting in an assignment of liabilities which can in principle be decoupled. In contrast to existing results we demonstrate that assignment of the specified loss is also important efficiency and complete decoupling is not inconsistent with efficiency.

Suggested Citation

  • Papiya Ghosh & Rajendra P. Kunda, 2021. "Decomposition of accident loss and decoupled liability assignment: A class of negligencerules," Working Papers 2157, Indian Institute of Foreign Trade.
    • Handle: RePEc:ift:wpaper:2157
    as

    Download full text from publisher

    File URL: ftp://203.190.248.10/RePEc/ift/workingpapers/EC-21-57.pdf
    File Function: First version, 2021
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Satish Kumar Jain, 2015. "Economic Analysis of Liability Rules," Springer Books, Springer, edition 127, number 978-81-322-2029-9, June.
    2. Satish Jain, 2006. "Efficiency of liability rules: A reconsideration," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 15(3), pages 359-373.
    3. Jain Satish K., 2012. "Decoupled Liability and Efficiency: An Impossibility Theorem," Review of Law & Economics, De Gruyter, vol. 8(3), pages 697-718, December.
    4. Jain Satish K. & Kundu Rajendra P., 2015. "Decomposition of Accident Loss and Efficiency of Liability Rules," Review of Law & Economics, De Gruyter, vol. 11(3), pages 453-480, November.
    5. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
    6. A. Mitchell Polinsky & Yeon-Koo Che, 1991. "Decoupling Liability: Optimal Incentives for Care and Litigation," RAND Journal of Economics, The RAND Corporation, vol. 22(4), pages 562-570, Winter.
    7. Harshil Kaur & Rajendra P. Kundu, 2020. "Efficient Liability Assignment: Is Coupling a Necessity?," Economics Bulletin, AccessEcon, vol. 40(3), pages 2388-2394.
    8. Peter A. Diamond, 1974. "Accident Law and Resource Allocation," Bell Journal of Economics, The RAND Corporation, vol. 5(2), pages 366-405, Autumn.
    9. Satish K. Jain & Ram Singh, 2002. "Efficient Liability Rules: Complete Characterization," Journal of Economics, Springer, vol. 75(2), pages 105-124, March.
    10. Kundu, Rajendra P. & Kaur, Harshil, 2022. "Efficient simple liability assignment rules: A complete characterization," Mathematical Social Sciences, Elsevier, vol. 116(C), pages 22-31.
    11. Shavell, S., 1986. "The judgment proof problem," International Review of Law and Economics, Elsevier, vol. 6(1), pages 45-58, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Papiya Ghosh & Rajendra P. Kundu, 2023. "Decomposition of accident loss and decoupled liability assignment: A class of negligence rules," Indian Economic Review, Springer, vol. 58(1), pages 119-140, June.
    2. Kundu, Rajendra P. & Kaur, Harshil, 2022. "Efficient simple liability assignment rules: A complete characterization," Mathematical Social Sciences, Elsevier, vol. 116(C), pages 22-31.
    3. Harshil Kaur & Rajendra P. Kundu, 2020. "Efficient Liability Assignment: Is Coupling a Necessity?," Economics Bulletin, AccessEcon, vol. 40(3), pages 2388-2394.
    4. Allan M Feldman & Ram Singh, 2021. "Equilibria under Liability Rules: How the standard claims fall apart," Working papers 315, Centre for Development Economics, Delhi School of Economics.
    5. Giuseppe Dari-Mattiacci & Bruno Lovat & Francesco Parisi, 2014. "Loss-Sharing between Nonnegligent Parties," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 170(4), pages 571-598, December.
    6. Steven Shavell, 2005. "Liability for Accidents," NBER Working Papers 11781, National Bureau of Economic Research, Inc.
    7. Giuseppe Dari-Mattiacci, 2009. "Negative Liability," The Journal of Legal Studies, University of Chicago Press, vol. 38(1), pages 21-59, January.
    8. Guiseppe Dari Mattiaci & F. Parisi, 2003. "The Economics of Tort Law: A Précis," Working Papers 03-13, Utrecht School of Economics.
    9. Usher, Dan, 2001. "Personal goods, efficiency and the law," European Journal of Political Economy, Elsevier, vol. 17(4), pages 673-703, November.
    10. Gérard Mondello & Evens Salies, 2016. "Tort law under oligopolistic competition," SciencePo Working papers Main hal-03459225, HAL.
    11. Gérard Mondello, 2013. "Ambiguous Beliefs on Damages and Civil Liability Theories"," Post-Print halshs-00929948, HAL.
    12. Zivin, Joshua Graff & Just, Richard E. & Zilberman, David, 2005. "Risk Aversion, Liability Rules, and Safety," International Review of Law and Economics, Elsevier, vol. 25(4), pages 604-623, December.
    13. Gérard Mondello, 2022. "Strict liability, scarce generic input and duopoly competition," European Journal of Law and Economics, Springer, vol. 54(3), pages 369-404, December.
    14. Sproul, Thomas W. & Zilberman, David, 2011. "Accidents Happen: The Effect of Uncertainty on Environmental Policy Design," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103927, Agricultural and Applied Economics Association.
    15. Michael Minnis & Nemit Shroff, 2017. "Why regulate private firm disclosure and auditing?," Accounting and Business Research, Taylor & Francis Journals, vol. 47(5), pages 473-502, July.
    16. Eberl, Jakob & Jus, Darko, 2012. "The year of the cat: Taxing nuclear risk with the help of capital markets," Energy Policy, Elsevier, vol. 51(C), pages 364-373.
    17. Christian Leuz, 2010. "Different approaches to corporate reporting regulation: How jurisdictions differ and why," Accounting and Business Research, Taylor & Francis Journals, vol. 40(3), pages 229-256.
    18. Satish Jain, 2006. "Efficiency of liability rules: A reconsideration," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 15(3), pages 359-373.
    19. Mondello, Gérard, 2015. "Splitting nuclear parks or not? The third party liability role," Energy Economics, Elsevier, vol. 51(C), pages 553-559.
    20. Seshimo, Hiroyuki, 2022. "Optimal extended liability rule in a competitive financial market with heterogeneous borrower firms," Journal of Mathematical Economics, Elsevier, vol. 98(C).

    More about this item

    Keywords

    LiabilityRule; negligence; decompositionofloss; decoupledliability; eciency.;
    All these keywords.

    JEL classification:

    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:ift:wpaper:2157. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: S. Balasubramanian (email available below). General contact details of provider: https://edirc.repec.org/data/iifttin.html .

    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.