when the agent is protected by limited liability. In this paper, we investigate how the principal should construct the … globally incentive compatible under limited liability, if local incentive constraints are strictly satisfied. We identify …

We contrast alternative liability rules for social control of product risks when heterogeneous consumers considering …' mispredictions vary with the prevailing liability regime. We first characterize the consumers' purchasing decision and the … equilibrium levels of safety and activity from the product's usage under no liability, strict liability, and negligence rule. We …

, we contrast producer liability and minimum quality standard regulation as alternative means of social control of product … relative desirability of strict liability vis-à-vis minimum quality standard regulation from a social welfare standpoint. We … also clarify when and why joint use of strict liability and minimum quality standard regulation welfare dominates the …

Risk-neutral individuals take more risky decisions when they have limited liability. Risk-neutral managers may not when … acting as agents under contract and taking costly actions to acquire information before taking decisions. Limited liability …

We focus in this paper on the effects of court errors on the optimal sharing of liability between firms and financiers …, governments and courts we show, through numerical simulations, the distortions in liability sharing between firms and financiers … firm innocent of inappropriate care) errors. This role is considered in a context where liability sharing is already …

principal to keep the agent below his outside option. Moreover, under limited liability, implemented effort can be inefficiently …