A Note on Optimal Care by Wealth-Constrained Injurers

Thomas Miceli and Kathleen Segerson ()

No 2002-44, Working papers from University of Connecticut, Department of Economics

Abstract: This paper clarifies the relationship between an injurer's wealth level and his care choice by highlighting the distinction between monetary and non-monetary care. When care is non-monetary, wealth-constrained injurers generally take less than optimal care, and care is increasing in their wealth level under both strict liability and negligence. In contrast, when care is monetary, injurers may take too much or too little care under strict liability, and care is not strictly increasing in injurer wealth. Under negligence, the relationship between injurer care and wealth is similar in the two formulations. However, when litigation costs are added to the model, the relationship between injurer care and wealth becomes non-monotonic under both liability rules.

Pages: 22 pages
Date: 2001-08, Revised 2002-05
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Citations: View citations in EconPapers (1)

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Journal Article: A note on optimal care by wealth-constrained injurers (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:uct:uconnp:2002-44

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