Efficiency of Posner's Nuisance Rule: A Reconsideration

Iljoong Kim and Jaehong Kim

Journal of Institutional and Theoretical Economics (JITE), 2004, vol. 160, issue 2, 327-333

Abstract: We claim that Posner's nuisance rule maintains the efficiency feature even under severe informational asymmetry. This paper, as a critical assessment of an overly complicated order-reporting mechanism by Kim [2002], argues that Posner's original value-reporting mechanism alone is enough to guarantee a socially efficient outcome, despite the plaintiff's occasional incentive to overreport.

JEL-codes: K13 K41 K42 (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (1)

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