How (not) to administer a liability rule – the German appraisal procedure for corporate restructurings

2020 ◽  
pp. 211-222
Keyword(s):  
Liability Rule ◽  
Corporate Restructurings

An Experimental Investigation of Auditors' Liability: Implications for Social Welfare and Exploration of Deviations from Theoretical Predictions

2000 ◽  
Vol 75 (4) ◽  
pp. 429-451 ◽  
Author(s):  
Ronald R. King ◽  
Rachel Schwartz
Keyword(s):  
Experimental Investigation ◽  
Social Welfare ◽  
Strict Liability ◽  
Liability Rule ◽  
Optimal Response ◽  
Legal Regimes ◽  
Theoretical Predictions ◽  
Best Responses

This paper reports the results of an experiment designed to investigate how legal regimes affect social welfare. We investigate four legal regimes, each consisting of a liability rule (strict or negligence) and a damage measure (out-of-pocket or independent-of-investment). The results of the experiment are for the most part consistent with the qualitative predictions of Schwartz's (1997) model; however, subjects' actual choices deviate from the point predictions of the model. We explore whether these deviations arise because: (1) subjects form faulty anticipations of their counterparts' actions and/or (2) subjects do not choose the optimal responses given their anticipations. We find that subjects behave differently under the four regimes in terms of anticipation errors and departures from best responses. For example, subjects playing the role of auditors anticipate investments most accurately under the regime with strict liability combined with out-of-pocket damages, but are least likely to choose the optimal response given their anticipations. This finding implies that noneconomic factors likely play a role in determining subjects' choices.

scholarly journals Economic Analysis of Accident Law: A New Liability Rule that Induces Socially Optimal Behaviour in Case of Limited Information

2020 ◽  
Vol 0 (0) ◽  
Author(s):  
Astha Srivastava ◽  
Ankur Srivastava
Keyword(s):  
Nash Equilibrium ◽  
Economic Analysis ◽  
Standard Of Care ◽  
Limited Information ◽  
Liability Rule ◽  
Rule Based ◽  
Liability Rules ◽  
Levels Of Care ◽  
Unique Nash Equilibrium ◽  
Optimal Behaviour

AbstractIn accident law, we seek a liability rule that will induce both the parties to adopt socially optimal levels of precaution. Economic analysis, however, shows that none of the commonly used liability rules induce both parties to adopt optimal levels, if courts have access only to ‘Limited Information’ on. In such a case, it has also been established (K. (2006). Efficiency of liability rules: a reconsideration. J. Int. Trade Econ. Dev. 15: 359–373) that no liability rule based on cost justified untaken precaution as a standard of care can be efficient. In this paper, we describe a two-step liability rule: the rule of negligence with the defence of relative negligence. We prove that this rule has a unique Nash equilibrium at socially optimal levels of care for the non-cooperative game, and therefore induces both parties to adopt socially optimal behaviour even in case of limited information.

scholarly journals Convergence, Corporate Restructuring, and Canadian Online News, 2000-2003

2006 ◽  
Vol 31 (2) ◽  
Author(s):  
Robert Sparks ◽  
Mary Lynn Young ◽  
Simon Darnell
Keyword(s):  
Consumer Choice ◽  
Online News ◽  
Private Ownership ◽  
Free Markets ◽  
The Public ◽  
Regulatory Policies ◽  
Corporate Restructurings ◽  
News Industry ◽  
The Impact ◽  
The Web

Abstract: This paper critically examines the corporate restructurings that took place in the Canadian news industry in 2000, using findings from website analyses in 2001 and 2003 that assessed the impact of the changes on the provision of online news. The paper shows that despite their stated commitment to convergence, the restructured companies only selectively exploited the interactive potential of the Web, and that they tended to operate under traditional news and revenue strategies. It also documents a continued shift in Canadian regulatory policies toward neo-liberal conceptions of news and the public good framed in terms of private ownership, free markets, and consumer choice. Résumé : Cet article propose un examen critique des réorganisations d’entreprises qui ont eu lieu dans l’industrie de l’actualité canadienne en 2000. Pour ce faire, il a recours aux résultats d’analyses de sites Web faites en 2001 et 2003. Ces analyses avaient pour but de mesurer l’impact de ces réorganisations sur la présence de nouvelles en ligne. L’article montre que les entreprises réorganisées, malgré l’engagement qu’elles ont exprimé de s’avancer vers la convergence, n’ont exploité le potentiel interactif du Web que de manière sélective continuant à recourir à des stratégies traditionnelles en ce qui a trait à l’actualité et au revenu. L’article observe aussi une tendance continue dans les politiques réglementaires canadiennes vers une conception néolibérale de l’actualité et du bien public qui privilégie la propriété privée, les marchés libres et l’offre de choix au consommateur.

Uncertainty Regarding Interpretation of the “Negligence Rule” and Its Implications for the Efficiency of Outcomes

2016 ◽  
Vol 7 (2) ◽  
Author(s):  
Satish K. Jain
Keyword(s):  
Subjective Probability ◽  
The Other ◽  
Sufficient Condition ◽  
Subjective Probabilities ◽  
Necessary And Sufficient Condition ◽  
Liability Rule ◽  
Important Conclusion ◽  
Standard Version ◽  
Necessary And Sufficient ◽  
Negligence Rule

AbstractThere are two ways that the negligence rule is interpreted. Under one interpretation a negligent injurer is liable for the entire harm to the victim; and under the other interpretation a negligent injurer is liable only for that part of the harm which can be ascribed to his negligence. Both these versions are efficient. However, if there is uncertainty regarding whether the court will be employing the full liability version or the incremental liability version for determining the liability of a negligent injurer, notwithstanding the fact that both the versions are efficient, inefficiency is possible. It is shown in the paper that a necessary and sufficient condition for efficiency in all cases is that the subjective probability with which the injurer expects the standard version to be employed must be greater than or equal to the subjective probability with which the victim expects the standard version to be employed. For the subset of applications without complementarities in the cares of the two parties and which are such that the total social costs are minimized at a unique care-configuration, it is shown that efficiency obtains regardless of the subjective probabilities with which the parties expect the two versions. One very important conclusion that emerges from the analysis of this paper is that when courts employ more than one liability rule, even if all the employed rules are efficient, the efficiency of all outcomes cannot be taken for granted merely on the ground of the efficiency of the employed rules.

scholarly journals Ready to Do Whatever it Takes? The Legal Mandate of the European Central Bank and the Economic Crisis

2013 ◽  
Vol 15 ◽  
pp. 503-536 ◽  
Author(s):  
Daniel Wilsher
Keyword(s):  
Moral Hazard ◽  
Central Bank ◽  
Monetary Union ◽  
European Central Bank ◽  
Sovereign Default ◽  
Lender Of Last Resort ◽  
Liability Rule ◽  
Fiscal Discipline ◽  
Public Deficit ◽  
European Central

AbstractTo complement the ‘no shared liability’ rule and public deficit limits, the Maastricht Treaty gave the European Central Bank (ECB) a narrow remit to focus on price stability. Crucially, as a ‘non-sovereign’ central bank, it was unclear that the ECB would act as lender of last resort in the event of market panics. The neoliberal orthodoxy at the heart of Economic and Monetary Union (EMU) held that moral hazard and inflationary risks militated against anything resembling ‘illegal monetary financing’. Following monetary union, markets under-priced risks and encouraged bubbles, but, with the onset of the crisis, sentiment overshot the other way, starving credit from banks and later sovereigns. With bailout funds limited and austerity failing to improve debt spreads, sovereigns became illiquid. ECB officials reluctantly concluded that an uncontrolled sovereign default would threaten the continuation of monetary union. The ECB was thus forced de facto to expand its mandate, first to help banks and, later, to help sovereigns facing loss of access to bond markets. Ultimately this was successful in restoring confidence, but the ECB remained uncomfortable with its role. It has continued to stress its legal limitations and has pressed for reformed governance to enforce fiscal discipline. The economic case for a lender of last resort in a crisis was always strong, but brings with it a worsening moral hazard problem that may invite leaders to avoid the deeper political changes necessary to rebalance the Eurozone.

Autonomous Vehicles, Technological Progress, and the Scope Problem in Products Liability

2019 ◽  
Vol 12 (2) ◽  
pp. 157-212
Author(s):  
Alexander B. Lemann
Keyword(s):  
Autonomous Vehicles ◽  
Human Error ◽  
Motor Vehicle ◽  
Liability Rule ◽  
Products Liability ◽  
Liability Law ◽  
Relative Safety ◽  
Wide Range ◽  
Tort System ◽  
Safety Features

Abstract Autonomous vehicles are widely expected to save tens of thousands of lives each year by making car crashes attributable to human error – currently the overwhelming majority of fatal crashes – a thing of the past. How the legal system should attribute responsibility for the (hopefully few) crashes autonomous vehicles cause is an open and hotly debated question. Most tort scholars approach this question by asking what liability rule is most likely to achieve the desired policy outcome: promoting the adoption of this lifesaving technology without destroying manufacturers’ incentives to optimize it. This approach has led to a wide range of proposals, many of which suggest replacing standard rules of products liability with some new system crafted specifically for autonomous vehicles and creating immunity or absolute liability or something in between. But, I argue, the relative safety of autonomous vehicles should not be relevant in determining whether and in what ways manufacturers are held liable for their crashes. The history of products liability litigation over motor vehicle design shows that the tort system has been hesitant to indulge in such comparisons, as it generally declines both to impose liability on older, more dangerous cars simply because they lack the latest safety features and to grant immunity to newer, safer cars simply because of their superior aggregate performance. These are instances in which products liability law fails to promote efficient outcomes and instead provides redress for those who have been wronged by defective products. Applying these ideas to the four fatalities that have so far been caused by autonomous vehicles suggests that just as conventional vehicles should not be considered defective in relying on a human driver, autonomous vehicles should not be immune when their defects cause injury.

scholarly journals Grounding the case for a European approach to the regulation of automated driving: the technology-selection effect of liability rules

2020 ◽  
Author(s):  
Andrea Bertolini ◽  
Massimo Riccaboni
Keyword(s):  
Selection Effect ◽  
Technology Selection ◽  
Management Approach ◽  
Automated Driving ◽  
Liability Rule ◽  
Member States ◽  
Legal Rules ◽  
One Stop ◽  
Levels Of Automation ◽  
The Impact

AbstractIn the current paper, we discuss the need for regulation at EU level of Connected and Automated Driving solutions (henceforth CAD) based on multiple considerations, namely (i) the need for uniformity of criteria across European Member States, and (ii) the impact that regulation—or the absence of it—has on the proliferation of specific technological solutions. The analysis is grounded on legal and economic considerations of possible interactions between vehicles with different levels of automation, and shows how the existing framework delays innovation. A Risk-Management Approach, identifying one sole responsible party ex ante (one-stop-shop), liable under all circumstances—pursuant to a strict, if not absolute liability rule—is to be preferred. We analyse the solution adopted by some Member States in light of those considerations and conclude that none truly corresponds to a RMA approach, and differences will also cause market fragmentation. We conclude that because legal rules determine what kind of technological application is favoured over others—and thence they are not technology-neutral—uniformity across MSs is of essential relevance, and discuss possible policy approaches to be adopted at European level.

scholarly journals The Rise and Fall of Regulatory Competition in Corporate Insolvency Law in the European Union

2019 ◽  
Vol 20 (3) ◽  
pp. 547-566 ◽  
Author(s):  
Horst Eidenmüller
Keyword(s):  
European Union ◽  
Regulatory Competition ◽  
The European Union ◽  
Insolvency Law ◽  
Insolvency Regulation ◽  
Corporate Restructurings ◽  
Dominant Market Position ◽  
Market Leader ◽  
Corporate Insolvency ◽  
The Uk

Abstract In this article, I discuss the rise and fall of regulatory competition in corporate insolvency law in the European Union. The rise is closely associated with the European Insolvency Regulation (EIR, 2002), and it is well documented. The UK has emerged as the ‘market leader’, especially for corporate restructurings. The fall is about to happen, triggered by a combination of factors: the recasting of the EIR (2017), the European Restructuring Directive (ERD, 2019) and Brexit (2019). The UK will lose its dominant market position. I present evidence to support this hypothesis.

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