Delayed Compensation for Lost Income

John W Pratt and Richard Zeckhauser

Journal of Risk and Uncertainty, 1993, vol. 7, issue 3, 10 pages

Abstract: Lengthy legal proceedings are often required before an individual who has unjustly lost income is compensated. The utility loss while waiting in straitened circumstances exceeds the utility gain from later compensation if compensation is merely monies lost plus interest. The excess loss will be larger the more averse the individual is to intertemporal variation in consumption, the less complete and perfect the markets for borrowing and trading contingent claims, and the less the certainty about whether an award will be made. To make an injured individual whole, the focus should be on compensating not for loss of discounted income, but for loss of utility. Copyright 1993 by Kluwer Academic Publishers

Date: 1993
References: Add references at CitEc
Citations: View citations in EconPapers (1)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:jrisku:v:7:y:1993:i:3:p:301-10

Ordering information: This journal article can be ordered from
http://www.springer. ... ry/journal/11166/PS2

Access Statistics for this article

Journal of Risk and Uncertainty is currently edited by W. Kip Viscusi

More articles in Journal of Risk and Uncertainty from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().