Friehe, Tim; Tabbach, Avraham - In: Journal of Institutional and Theoretical Economics (JITE) 170 (2014) 2, pp. 249-274
This paper studies a unilateral accident model in which potentially judgment-proof agents (agents who may have insufficient assets to satisfy a judgment against them) choose levels of both monetary and nonmonetary care. We show that (i) monetary care may exceed its first-best level under both...