| 来源类型 | FEEM working papers "Note di lavoro" series
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| 规范类型 | 论文
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| The Judgement Proof Opportunity |
| Klaas van't Veld
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| 发表日期 | 1997
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| 出处 | Climate Change and Sustainable Development
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| 出版年 | 1997
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| 语种 | 英语
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| 摘要 | When liability for environmental spills, product failures, or other types of accidents is imposed on firms with insufficient wealth, those firms may file for bankruptcy ---thereby becoming ''judgement proof''--- as soon as a major accident occurs. As a result, they are unlikely to choose socially optimal levels of care or scale of operation. This paper offers the first analysis of this problem, known as the ''judgement proof problem,'' that takes full account of the firm's optimal financial decisions in the face of liability, as well as the competitive pressures it faces in capital and output markets. By analysing the firm's dividend decision, the paper is able to clear up a persistent confusion in the existing literature concerning the optimal care level chosen by judgement-proof firms. By analysing the firm's bankruptcy decision itself, the paper shows that, in contrast to common pollution externalities, the externality caused by the judgement proof problem is never fully offset by market power. Finally, by analysing how hazardous industries as a whole restructure in response to liability, the paper is able to identify a very simple condition on scale economies in accident prevention under which imposing liability is guaranteed to improve welfare. If, in contrast, the condition fails, imposing liability may amount to a high-stakes gamble on welfare outcomes. |
| 特色分类 | K13,K32,Q28,G33,L11
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| 关键词 | Judgement proof problem,Liability,Industrial accidents,Bankruptcy,Tort law,Environmental law,Safety law,Market structure,Monopoly,Firm size
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| URL | https://www.feem.it/en/publications/feem-working-papers-note-di-lavoro-series/the-judgement-proof-opportunity/
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| 来源智库 | Fondazione Eni Enrico Mattei (Italy)
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| 资源类型 | 智库出版物
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| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/116282
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推荐引用方式
GB/T 7714 |
Klaas van't Veld. The Judgement Proof Opportunity. 1997.
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文件名：
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NDL1997-083.pdf
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格式：
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Adobe PDF
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