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 Why do consumers not switch? An experimental investigation of a search and switch model

2021 ◽  
Author(s):  
Irene Maria Buso ◽  
John Hey
Keyword(s):  
Experimental Investigation ◽  
Search Strategy ◽  
Switching Costs ◽  
Optimal Choice ◽  
Search Cost ◽  
Individual Behaviour ◽  
Wilson Model ◽  
Field Evidence ◽  
Theoretical Predictions

AbstractSearch and switching costs are two market frictions that are well known in the literature for preventing people from switching to a new and cheaper provider. Previous experimental literature has studied these two frictions in isolation. However, field evidence shows that these two frictions frequently occur together. Recently, a theoretical framework has been developed (Wilson in Eur Econ Rev 56(6):1070–1086) which studies the interplay between these two costs. We report on an experiment testing this theory to see if individual behaviour with search and switching costs is in line with the theoretical predictions derived from the optimal choice rule of Wilson. The results show the crucial role of the search strategy: not only, according to Wilson model, the search cost has a greater deterrent impact on search than the switching costs, but also the sub-optimality of the search strategy is the major source of sub-optimality in the switching behaviour.

Experimental Investigation and Numerical Simulation on the Role of Sphere Indenter in Measuring Contact Resistance of Flat Rivets

2014 ◽  
Vol E97.C (9) ◽  
pp. 873-879 ◽  
Author(s):  
Wanbin REN ◽  
Yu CHEN ◽  
Shengjun XUE ◽  
Guenther HORN ◽  
Guofu ZHAI
Keyword(s):  
Numerical Simulation ◽  
Experimental Investigation ◽  
Contact Resistance

An Analytical Exposition of the Social Welfare Role of Wealth in Islam

2015 ◽  
Author(s):  
Ahmad Bello Dogarawa ◽  
Suleiman Muhammad Hussain
Keyword(s):  
Social Welfare ◽  
The Social

Torts and Other Wrongs

2019 ◽  
Author(s):  
John Gardner
Keyword(s):  
Public Policy ◽  
Distributive Justice ◽  
Strict Liability ◽  
Private Law ◽  
Moral Significance ◽  
Reasonable Person ◽  
Reasonable Person Standard ◽  
The Law

Torts and Other Wrongs is a collection of eleven of the author’s essays on the theory of the law of torts and its place in the law more generally. Two new essays accompany nine previously published pieces, a number of which are already established classics of theoretical writing on private law. Together they range across the distinction between torts and other wrongs, the moral significance of outcomes, the nature and role of corrective and distributive justice, the justification of strict liability, the nature of the reasonable person standard, and the role of public policy in private law adjudication. Though focused on the law of torts, the wide-ranging analysis in each chapter will speak to theorists of private law more generally.

Stabilizing Expectations: The Role of Earnings-Related Benefits in Social Welfare Policy

Ethics ◽  
1990 ◽  
Vol 100 (3) ◽  
pp. 530-553 ◽  
Author(s):  
Robert E. Goodin
Keyword(s):  
Social Welfare ◽  
Welfare Policy ◽  
Social Welfare Policy

scholarly journals A Stochastic Kinetic Type Reactions Model for COVID-19

Mathematics ◽  
2021 ◽  
Vol 9 (11) ◽  
pp. 1221
Author(s):  
Giorgio Sonnino ◽  
Fernando Mora ◽  
Pasquale Nardone
Keyword(s):  
Real Data ◽  
Stochastic Noise ◽  
Mathematical Basis ◽  
Sis Model ◽  
Theoretical Predictions ◽  
Coronavirus Infection ◽  
Massive Distribution ◽  
Second Wave ◽  
Stochastic Sis Model

We propose two stochastic models for the Coronavirus pandemic. The statistical properties of the models, in particular the correlation functions and the probability density functions, were duly computed. Our models take into account the adoption of lockdown measures as well as the crucial role of hospitals and health care institutes. To accomplish this work we adopt a kinetic-type reaction approach where the modelling of the lockdown measures is obtained by introducing a new mathematical basis and the intensity of the stochastic noise is derived by statistical mechanics. We analysed two scenarios: the stochastic SIS-model (Susceptible ⇒ Infectious ⇒ Susceptible) and the stochastic SIS-model integrated with the action of the hospitals; both models take into account the lockdown measures. We show that, for the case of the stochastic SIS-model, once the lockdown measures are removed, the Coronavirus infection will start growing again. However, the combined contributions of lockdown measures with the action of hospitals and health institutes is able to contain and even to dampen the spread of the SARS-CoV-2 epidemic. This result may be used during a period of time when the massive distribution of vaccines in a given population is not yet feasible. We analysed data for USA and France. In the case of USA, we analysed the following situations: USA is subjected to the first wave of infection by Coronavirus and USA is in the second wave of SARS-CoV-2 infection. The agreement between theoretical predictions and real data confirms the validity of our approach.

How Do Intermediaries Affect the Effectiveness of the Four-Eyes-Principle? An Experimental Investigation

2019 ◽  
Vol 19 (4) ◽  
Author(s):  
Liangcong Fan ◽  
Zechun Ying ◽  
Yuemei Yuan ◽  
Xinchao Zhang ◽  
Bin Xu
Keyword(s):  
Experimental Investigation ◽  
Active Role ◽  
Positive Effect

Abstract Corrupt deals are commonly arranged by intermediaries. However, attempts to deter corruption pay little attention to the role of intermediaries in corrupt deals. This paper reports a laboratory bribery experiment on corruption designed to investigate how intermediaries with information about the lowest bribe that the official is willing to accept in a briber-initiated corrupt deal affect the effectiveness of the four-eyes-principle (FEP) on deterring corruption. We find that the introduction of the FEP significantly decreases the corruption level by increasing uncertainty. However, the presence of intermediaries with information completely offsets the positive effect of introducing the FEP on preventing corruption. Our findings suggest that further research on corruption should allow a more active role of intermediaries, and legislators should take the role of intermediaries into account when designing anti-corruption mechanisms.

Sign in / Sign up

Export Citation Format

Share Document