The cost of delegated control: vicarious liability, secondary liability and mandatory insurance

Corporate crime

“…As the control principle suggests, extending liability to gatekeepers will tend to be worthwhile when they are good monitors and controllers of the enterprise and agent. Besides the cites in Kraakman (2000), additional recent work on the gatekeeper idea include Mattiacci and Parisi (2003), Ganuza and Gomes (2007), and a large body of work by John Coff ee, including Coff ee (2003Coff ee ( , 2004.…”

The Economics of Tort Law: A Precis

“…Mandatory insurance may serve the same purpose. Dari Mattiacci and Parisi (2003) analyze different such systems of delegated control in a unitary framework.…”

Should Consumers Be Permitted to Waive Products Liability? Product Safety, Private Contracts, and Adverse Selection

“…11 Manufacturer liability may also be desirable when the safety of products is not readily observable to consumers at the time of sale, since liability provides incentives for better product design. 12 However, in order to use this argument to justify products liability laws, one must first explain the failure of market participants to find private solutions to moral hazard and involving recreational activities such as sky diving, bungee jumping, and snowmobiling, providers of these activities may successfully avoid liability for consumer harms. See Ausness (2000).…”

“…Related work on vicarious liability includes Sykes (1998) and Dari Mattiacci and Parisi (2002). 12 Absent financial incentives, manufacturers would be tempted to chisel quality to save money and would decline to disclose product defects to consumers. Daughety and Reinganum (1995) argue that liability facilitates the signaling of product quality through the prices charged by manufacturers.…”