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Information and externalities in sequential litigation

Author: Xinyu Hua; Kathryn E Spier; National Bureau of Economic Research.
Publisher: Cambridge, Mass. : National Bureau of Economic Research, 2004.
Series: Working paper series (National Bureau of Economic Research), no. 10943.
Edition/Format:   eBook : Document : EnglishView all editions and formats
Summary:
"The information created and disseminated through the litigation process can have social value. Suppose a long-lived plaintiff is suing a defendant for damages sustained in an accident. The plaintiff may suffer similar damages in future accidents involving different defendants. Potential injurers update their beliefs after observing the first case and subsequently fine-tune their precautions to avoid accidents. The  Read more...
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Details

Material Type: Document, Internet resource
Document Type: Internet Resource, Computer File
All Authors / Contributors: Xinyu Hua; Kathryn E Spier; National Bureau of Economic Research.
OCLC Number: 57191830
Description: 1 online resource (29 pages).
Series Title: Working paper series (National Bureau of Economic Research), no. 10943.
Responsibility: Xinyu Hua, Kathryn E. Spier.

Abstract:

"The information created and disseminated through the litigation process can have social value. Suppose a long-lived plaintiff is suing a defendant for damages sustained in an accident. The plaintiff may suffer similar damages in future accidents involving different defendants. Potential injurers update their beliefs after observing the first case and subsequently fine-tune their precautions to avoid accidents. The joint incentive of the plaintiff and the first defendant to create public information through litigation is too small. The optimal liability rule trades off providing future injurers with incentives to take precautions and providing the plaintiff with incentives to create information"--National Bureau of Economic Research web site.

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