DARI-MATTIACCI, GIUSEPPE; MANGAN, BARBARA M. - In: Economica 75 (2008) 300, pp. 749-765
In this paper we analyse two ways in which liability can be reduced: caps (the "judgment proof problem"), and proportional reductions (the "disappearing defendant problem"). We show that these two problems have different incentive effects and hence yield dissimilar levels of social welfare....