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Information disclosure under liability: an experiment on public bads

Author

Listed:
  • Julien Jacob
  • Eve-Angéline Lambert
  • Mathieu Lefebvre
  • Sarah Van Driessche
Abstract
We experimentally investigate the impact of information disclosure on managing collective harms that are caused jointly by a group of liable agents. Subjects interact in a public bad setting and must choose ex ante how much to contribute in order to reduce the probability of causing a common damage. If a damage occurs, subjects bear a part of the loss according to the liability-sharing rule in force.We consider two existing rules: a per capita rule and a proportional rule. Our aim is to analyze the relative impact of information disclosure under each rule. We show that information disclosure increases contributions only under a per capita rule. This result challenges the classical results regarding the positive effects of information disclosure, since we show that this impact may depend upon the legal context. We also show that while a proportional rule leads to higher contributions than a per capita one, the positive effect of disclosure on a per capita rule makes it as efficient as a proportional rule without information disclosure.

Suggested Citation

  • Julien Jacob & Eve-Angéline Lambert & Mathieu Lefebvre & Sarah Van Driessche, 2021. "Information disclosure under liability: an experiment on public bads," Working Papers of BETA 2021-30, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    • Handle: RePEc:ulp:sbbeta:2021-30
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    Cited by:

    1. Julien Jacob & Eve-Angéline Lambert & Emmanuel Peterle, 2022. "Several liability with sequential care: an experiment," European Journal of Law and Economics, Springer, vol. 54(2), pages 283-326, October.

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    More about this item

    Keywords

    Information disclosure; Collective harms; Environmental Regulation; Liability Sharing Rules; Public Bads; Multiple Tortfeasors.;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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