Efficient liability rules for multi-party accidents with moral hazard

Article Abstract:

An economic analysis of tort law can be applied to multi-party accidents when harm occurs from the action of a number of agents and each contribution is non-separable. There are similarities with a team production problem. Tort becomes a less pwerful instrument the greater the number of injurers, and tort law is limited as a way of tackling such accidents involving moral hazard. Remedies can be found apart from punitive damages. Noisy monitoring technology is able to restore efficiency if enough injurer-specific information is obtained.

Stochastic analysis, Corporations, Environmental economics, Tort liability, Tort liability of corporations

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Shirking versus managerial incentives of chief executive officers (CEOs): a note on a possible misunderstanding of principal-agent theory

Article Abstract:

Chief executive officers (CEOs) may be paid in ways that do not reflect the performance of a company if the incentive scheme is poorly designed. Managers can be encouraged to take risks if they have insurance to protect them. Managerial incentives are a realistic measure. These incentives should bear in mind the position of CEOs which is different from the position of workers and of lower-level managers who are simply responsible for operational tasks.

Compensation and benefits, Management, Executives, Executive compensation

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Evolutionary norm enforcement

Article Abstract:

Legal systems can be devised that reward trust, despite material incentives tending to prompt players to exploit trust.

Institutional economics, Legal authorities, Legal authorities (Sources), Honesty

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