Suchergebnisse

Designing a contract is often more of an economic than a legal problem. A good contract protects parties against opportunistic behavior while providing motivation to cooperate. This is where economics and, especially contract theory, may prove helpful by enhancing our understanding of incentive issues. The purpose of this book is to provide specific tools which will help to write better contracts in real world environments. Concentrating on moral hazard literature, this book derives a tentative checklist for drafting contracts. As an economic contribution to a field traditionally considered an art rather than a science, this treatment also gives much attention to methodological issues.

Designing a contract is often more of an economic than a legal problem. A good contract protects parties against opportunistic behavior while providing motivation to cooperate. This is where economics and, especially contract theory, may prove helpful by enhancing our understanding of incentive issues. The purpose of this book is to provide specific tools which will help to write better contracts in real world environments. Concentrating on moral hazard literature, this book derives a tentative checklist for drafting contracts. As an economic contribution to a field traditionally considered an art rather than a science, this treatment also gives much attention to methodological issues.

AbstractIn important areas like medical malpractice and environmental torts, injurers are potentially insolvent and courts may make errors in determining liability (e.g. due to hindsight bias). We show that proportional liability, which holds a negligent injurer liable for harm discounted with the probability that the harm was caused by the injurer's negligence, is less susceptible to these imperfections and therefore socially preferable to all other liability rules currently contemplated by courts. We also provide a result which might be useful to regulators when calculating minimum capital requirements or minimum mandatory insurance for different industries.