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In this paper, we study the effects and desirability of legal rules that allow the sharing of an accident loss between a nonnegligent injurer and his nonnegligent victim. In order to identify the virtues and limits of losssharing rules, we begin by considering the effect of a loss-sharing regime on parties' incentives. We address an unresolved issue in the literature, exploring whether loss-sharing in equilibrium undermines the parties' primary care incentives. We establish the conditions under which loss-sharing may be desirable and characterize the regime providing the best overall incentives to minimize the social cost of accidents. Our results indicate that loss-sharing may indeed be desirable in a vast range of situations. The results are later extended to consider the effect of parties' uncertainty in a loss-sharing regime and reveal that loss-sharing may at the same time be desirable and unnecessary in real-life accident law. JEL classification: K13, K32.

In rent-seeking contests, players are seldom identical to one another. In this chapter, we examine the rent-seeking literature that explores the effects of specific forms of asymmetry between contestants. We consider Tullock's rentseeking contests involving two players who differ in strength (marginal returns to effort), motivation (valuations of the sought-after rent) and cunning (bargaining power). We study the combined interaction of these three possible forms of asymmetry in rent-seeking. We examine how these asymmetries affect the rentseeking contest and investigate the effect of ex post trading opportunities on the players' efforts, on probabilities of winning and on the social costs of rentseeking.

Financing of the Luxembourg pension system is based on a pay-as-you-go (PAYG) system and hence on an intergenerational contract. As is the case for most other European countries, this system will be exposed to the effects of demographic ageing over the coming decades. The aim of this article is to develop a model that allows evaluating the effi ciency of a diversifi ed pension system fi nanced partly by a PAYG scheme and partly by capitalization. The effi ciency is measured by the long-term sustainability of the system. We compare the sustainability of our model with the one of a pure PAYG system.