Pub Date : 2026-03-01Epub Date: 2026-01-14DOI: 10.1016/j.irle.2026.106322
Ken Yahagi
This study examines optimal evidence rules when self-interested law enforcers may strategically distort evidence to increase conviction rates. Although law enforcers can strategically distort evidence, the analysis demonstrates that appropriate evidentiary thresholds can induce truthful reporting, thereby extracting useful information and reducing expected legal error costs from wrongful convictions and erroneous acquittals. This is particularly important when the defendant’s guilt is uncertain. The analysis extends to judicial discretion in sentencing. We show that allowing courts to impose lighter sanctions can minimize legal error costs when such sanctions reduce error costs and guilt is uncertain. This provides a justification for judicial discretion under self-interested law enforcement.
{"title":"Legal errors and evidence rules with biased law enforcers","authors":"Ken Yahagi","doi":"10.1016/j.irle.2026.106322","DOIUrl":"10.1016/j.irle.2026.106322","url":null,"abstract":"<div><div>This study examines optimal evidence rules when self-interested law enforcers may strategically distort evidence to increase conviction rates. Although law enforcers can strategically distort evidence, the analysis demonstrates that appropriate evidentiary thresholds can induce truthful reporting, thereby extracting useful information and reducing expected legal error costs from wrongful convictions and erroneous acquittals. This is particularly important when the defendant’s guilt is uncertain. The analysis extends to judicial discretion in sentencing. We show that allowing courts to impose lighter sanctions can minimize legal error costs when such sanctions reduce error costs and guilt is uncertain. This provides a justification for judicial discretion under self-interested law enforcement.</div></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"85 ","pages":"Article 106322"},"PeriodicalIF":1.0,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145977110","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-01Epub Date: 2025-09-11DOI: 10.1016/j.irle.2025.106286
Gary D. Libecap
In 1960, Ronald Coase offered a decentralized bargaining framework for reducing transaction costs in externality mitigation. Subsequent US environmental policies have not made it primary. Policies are centralized and prescriptive. To explore why, I examine the Clean Air Act Amendments of 1970, 1977, 1990, the most wide-ranging US environmental law; the Magnuson-Stevens Fishery Act of 1976, the primary US fishing regulation; and the Endangered Species Act of 1973, suggested to be the most powerful conservation law in the world. It is commonly asserted that the transaction costs of Coase are high relative to command and control. I find no empirical support for this claim; it is not tested; nor does it appear in legislative histories as justification for observed regulation. Prescriptive controls may involve higher transaction costs than Coase. Relevant externalities often are local where information about abatement costs and benefits would be available and costs of defining and trading decentralized property rights potentially lower than in the political arena with larger numbers of heterogeneous parties and objectives. Rent-seeking by political agents rather than transaction cost reduction dominates policy selection. Coase’s efficient collaborative problem solving has not been realized. Although the three laws provide public goods, they appear costly on the margin, inequitable, and mired in political controversy. High costs in all three laws is a key empirical finding. Predictions for policy formation motivated by transaction cost reduction or rent-seeking guide the analysis.
{"title":"Where’s Coase? Transaction costs reduction or rent-seeking in determining US environmental policies","authors":"Gary D. Libecap","doi":"10.1016/j.irle.2025.106286","DOIUrl":"10.1016/j.irle.2025.106286","url":null,"abstract":"<div><div>In 1960, Ronald Coase offered a decentralized bargaining framework for reducing transaction costs in externality mitigation. Subsequent US environmental policies have not made it primary. Policies are centralized and prescriptive. To explore why, I examine the Clean Air Act Amendments of 1970, 1977, 1990, the most wide-ranging US environmental law; the Magnuson-Stevens Fishery Act of 1976, the primary US fishing regulation; and the Endangered Species Act of 1973, suggested to be the most powerful conservation law in the world. It is commonly asserted that the transaction costs of Coase are high relative to command and control. I find no empirical support for this claim; it is not tested; nor does it appear in legislative histories as justification for observed regulation. Prescriptive controls may involve higher transaction costs than Coase. Relevant externalities often are local where information about abatement costs and benefits would be available and costs of defining and trading decentralized property rights potentially lower than in the political arena with larger numbers of heterogeneous parties and objectives. Rent-seeking by political agents rather than transaction cost reduction dominates policy selection. Coase’s efficient collaborative problem solving has not been realized. Although the three laws provide public goods, they appear costly on the margin, inequitable, and mired in political controversy. High costs in all three laws is a key empirical finding. Predictions for policy formation motivated by transaction cost reduction or rent-seeking guide the analysis.</div></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"84 ","pages":"Article 106286"},"PeriodicalIF":1.0,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145105234","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-01Epub Date: 2025-09-02DOI: 10.1016/j.irle.2025.106300
Jean Beuve , Zoé Le Squeren , Marian W. Moszoro
Why do some public services remain in-house while others are outsourced? This long-standing question has garnered considerable attention from both scholars and practitioners, resulting in a rich yet inconclusive body of research, particularly regarding the role of political ideology. Although left-wing governments are often assumed to favor public provision, empirical findings remain mixed. We argue that this ambiguity stems from a narrow, short-term view of ideology that overlooks institutional path dependence. Using data on seven local services across 156 French municipalities, we show that the cumulative presence of left-wing mayors over time significantly increases the likelihood of in-house provision. This long-term ideological anchoring effect is particularly salient for services that are highly sensitive to voters or embedded in long-term governance structures. Our results suggest that ideology matters—not episodically, but persistently and under specific service-level conditions.
{"title":"Ideology beyond elections: Path dependence in local public service provision","authors":"Jean Beuve , Zoé Le Squeren , Marian W. Moszoro","doi":"10.1016/j.irle.2025.106300","DOIUrl":"10.1016/j.irle.2025.106300","url":null,"abstract":"<div><div>Why do some public services remain in-house while others are outsourced? This long-standing question has garnered considerable attention from both scholars and practitioners, resulting in a rich yet inconclusive body of research, particularly regarding the role of political ideology. Although left-wing governments are often assumed to favor public provision, empirical findings remain mixed. We argue that this ambiguity stems from a narrow, short-term view of ideology that overlooks institutional path dependence. Using data on seven local services across 156 French municipalities, we show that the cumulative presence of left-wing mayors over time significantly increases the likelihood of in-house provision. This long-term ideological anchoring effect is particularly salient for services that are highly sensitive to voters or embedded in long-term governance structures. Our results suggest that ideology matters—not episodically, but persistently and under specific service-level conditions.</div></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"84 ","pages":"Article 106300"},"PeriodicalIF":1.0,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145019571","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-01Epub Date: 2025-09-23DOI: 10.1016/j.irle.2025.106303
Mehdi Guelmamen , Serge Garcia , Alexandre Mayol
Inter-municipal cooperation (IMC) is frequently promoted as a solution to improve the management of local utilities such as drinking water. Yet its effectiveness remains ambiguous: while IMC can create economies of scale, it may also induce transaction costs that undermine its benefits. In France, drinking water services are managed at the municipal level, where local governments can decide whether to cooperate—and if so, whether to adopt a purely technical cooperative arrangement or a more politically integrated, supra-municipal governance structure. Using a comprehensive panel of French water utilities from 2008 to 2021, we investigate the factors that lead municipalities to remain independent. Our econometric analysis, based on a correlated random effects probit model with a control function approach, yields several key findings. First, while IMC is associated with higher water prices, these increased tariffs are offset by better network performance, as indicated by lower water loss indices and improved water quality. Second, we find that the more politically integrated form of cooperation is more common among publicly managed utilities and among municipalities seeking to reduce their dependence on imported water. These findings provide new insights into the governance of common-pool resources, suggesting that while cooperation can improve service provision, its institutional design must carefully balance organizational costs against expected efficiency gains.
{"title":"Inter-municipal cooperation in drinking water supply: Trade-offs between transaction costs, efficiency and service quality","authors":"Mehdi Guelmamen , Serge Garcia , Alexandre Mayol","doi":"10.1016/j.irle.2025.106303","DOIUrl":"10.1016/j.irle.2025.106303","url":null,"abstract":"<div><div>Inter-municipal cooperation (IMC) is frequently promoted as a solution to improve the management of local utilities such as drinking water. Yet its effectiveness remains ambiguous: while IMC can create economies of scale, it may also induce transaction costs that undermine its benefits. In France, drinking water services are managed at the municipal level, where local governments can decide whether to cooperate—and if so, whether to adopt a purely technical cooperative arrangement or a more politically integrated, supra-municipal governance structure. Using a comprehensive panel of French water utilities from 2008 to 2021, we investigate the factors that lead municipalities to remain independent. Our econometric analysis, based on a correlated random effects probit model with a control function approach, yields several key findings. First, while IMC is associated with higher water prices, these increased tariffs are offset by better network performance, as indicated by lower water loss indices and improved water quality. Second, we find that the more politically integrated form of cooperation is more common among publicly managed utilities and among municipalities seeking to reduce their dependence on imported water. These findings provide new insights into the governance of common-pool resources, suggesting that while cooperation can improve service provision, its institutional design must carefully balance organizational costs against expected efficiency gains.</div></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"84 ","pages":"Article 106303"},"PeriodicalIF":1.0,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145157667","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-01Epub Date: 2025-09-29DOI: 10.1016/j.irle.2025.106304
Philippe Gagnepain , David Martimort
We explore empirically the impact of the market sharing collusive practices that were implemented in the French public transportation industry between 1994 and 1999. We build a structural model of bidding markets where innovating firms compete for the market and have the ability to spread the benefits of their innovation through all markets on which they are active. Each local competitive environment shapes the distribution of the prices (the bids) paid by public authorities to transport operators. We recover empirically the distribution of prices and innovation shocks and we show that collusive practices had overall a limited impact on prices. Firms were in reality more interested in avoiding significant financial risks inherent to the activity, as well as the high cost of preparing a tender proposal. As a by-product, we perform a counterfactual analysis that allows us to simulate how an increase in firms’ innovation reduces prices significantly.
{"title":"Collusion in bidding markets: The case of the French public transport industry","authors":"Philippe Gagnepain , David Martimort","doi":"10.1016/j.irle.2025.106304","DOIUrl":"10.1016/j.irle.2025.106304","url":null,"abstract":"<div><div>We explore empirically the impact of the market sharing collusive practices that were implemented in the French public transportation industry between 1994 and 1999. We build a structural model of bidding markets where innovating firms compete for the market and have the ability to spread the benefits of their innovation through all markets on which they are active. Each local competitive environment shapes the distribution of the prices (the bids) paid by public authorities to transport operators. We recover empirically the distribution of prices and innovation shocks and we show that collusive practices had overall a limited impact on prices. Firms were in reality more interested in avoiding significant financial risks inherent to the activity, as well as the high cost of preparing a tender proposal. As a by-product, we perform a counterfactual analysis that allows us to simulate how an increase in firms’ innovation reduces prices significantly.</div></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"84 ","pages":"Article 106304"},"PeriodicalIF":1.0,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145266596","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-01Epub Date: 2025-08-20DOI: 10.1016/j.irle.2025.106284
Kene Boun My, Julien Jacob, Mathieu Lefebvre
We experimentally investigate the effect of the incentives provided by different allocations of liability in the case of (semi)autonomous devices which are a source of risk of accident. Considering three key agents, an AI provider (scientist), a producer, and a consumer, we look at the effect of different liability-sharing rules on the decision-making of each type of agent. We show that assigning liability to the scientist and to the producer is effective in reducing their misbehavior. We also find that assigning liability to the consumer increases her incentive to control the risk of accident in the case of semi-autonomous devices. However, the absence of consumer control (fully autonomous device), coupled with the assignment of liability, decreases the consumer’s propensity to buy the good in the first place. We complete our study with a social welfare analysis which highlights the importance of assigning liability to the producer so that the consumer can have greater confidence in the technology, especially in the case of fully autonomous devices.
{"title":"AI devices and liability","authors":"Kene Boun My, Julien Jacob, Mathieu Lefebvre","doi":"10.1016/j.irle.2025.106284","DOIUrl":"10.1016/j.irle.2025.106284","url":null,"abstract":"<div><div>We experimentally investigate the effect of the incentives provided by different allocations of liability in the case of (semi)autonomous devices which are a source of risk of accident. Considering three key agents, an AI provider (scientist), a producer, and a consumer, we look at the effect of different liability-sharing rules on the decision-making of each type of agent. We show that assigning liability to the scientist and to the producer is effective in reducing their misbehavior. We also find that assigning liability to the consumer increases her incentive to control the risk of accident in the case of semi-autonomous devices. However, the absence of consumer control (fully autonomous device), coupled with the assignment of liability, decreases the consumer’s propensity to buy the good in the first place. We complete our study with a social welfare analysis which highlights the importance of assigning liability to the producer so that the consumer can have greater confidence in the technology, especially in the case of fully autonomous devices.</div></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"84 ","pages":"Article 106284"},"PeriodicalIF":1.0,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144879007","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-01Epub Date: 2025-09-16DOI: 10.1016/j.irle.2025.106301
Nuno Garoupa , Rok Spruk
This paper examines the long-term institutional consequences of populist constitutional reform, focusing on effective judicial independence in Türkiye. Using the synthetic control method, we estimate the causal effect of the 2010 constitutional referendum, which restructured the judiciary under the rhetoric of modernization, on judicial independence. Türkiye is compared to a carefully selected donor pool of Mediterranean countries with similar institutional trajectories but no comparable judicial intervention during 1987–2023. The results reveal a sharp and sustained decline in judicial independence following the 2010 reforms, predating and paving the way for the more overt constitutional centralization of 2017. These findings contribute to the literature on populism, comparative institutional development, and empirical law and economics, and highlight the role of disguised legal reform in undermining judicial checks on executive power.
{"title":"Populist constitutional backsliding and judicial independence: Evidence from Türkiye","authors":"Nuno Garoupa , Rok Spruk","doi":"10.1016/j.irle.2025.106301","DOIUrl":"10.1016/j.irle.2025.106301","url":null,"abstract":"<div><div>This paper examines the long-term institutional consequences of populist constitutional reform, focusing on effective judicial independence in Türkiye. Using the synthetic control method, we estimate the causal effect of the 2010 constitutional referendum, which restructured the judiciary under the rhetoric of modernization, on judicial independence. Türkiye is compared to a carefully selected donor pool of Mediterranean countries with similar institutional trajectories but no comparable judicial intervention during 1987–2023. The results reveal a sharp and sustained decline in judicial independence following the 2010 reforms, predating and paving the way for the more overt constitutional centralization of 2017. These findings contribute to the literature on populism, comparative institutional development, and empirical law and economics, and highlight the role of disguised legal reform in undermining judicial checks on executive power.</div></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"84 ","pages":"Article 106301"},"PeriodicalIF":1.0,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145157666","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-01Epub Date: 2025-10-17DOI: 10.1016/j.irle.2025.106306
Francesco Parisi
The International Review of Law & Economics is publishing these notes in memory and celebration of Robert D. Cooter—its Editor from 1988 to 2004—offering brief reflections on him as teacher, scholar, and exemplar. A giant of law and economics, Robert D. Cooter combined breadth with creative insight: he helped build a systematic economic understanding of torts, contracts, and property, a novel approach to public law and Constitutional design, and opened new frontiers on the interaction between law and social norms and on the expressive power of law. His humanity and scholarly ethos—curiosity, humor, and intellectual honesty—left a lasting mark on all who had the privilege to learn from him as students, colleagues, co-authors, and friends.
{"title":"In Memoriam: Robert D. Cooter","authors":"Francesco Parisi","doi":"10.1016/j.irle.2025.106306","DOIUrl":"10.1016/j.irle.2025.106306","url":null,"abstract":"<div><div>The <em>International Review of Law & Economics</em> is publishing these notes in memory and celebration of Robert D. Cooter—its Editor from 1988 to 2004—offering brief reflections on him as teacher, scholar, and exemplar. A giant of law and economics, Robert D. Cooter combined breadth with creative insight: he helped build a systematic economic understanding of torts, contracts, and property, a novel approach to public law and Constitutional design, and opened new frontiers on the interaction between law and social norms and on the expressive power of law. His humanity and scholarly ethos—curiosity, humor, and intellectual honesty—left a lasting mark on all who had the privilege to learn from him as students, colleagues, co-authors, and friends.</div></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"84 ","pages":"Article 106306"},"PeriodicalIF":1.0,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145415765","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-01Epub Date: 2025-09-20DOI: 10.1016/j.irle.2025.106302
Andreea Cosnita-Langlais , Tim Friehe , Eric Langlais
This paper explores how product liability rules affect merger incentives, with consumer risk perception as a key factor. We find a striking contrast: when consumers overestimate product risk, no liability generates the strongest merger incentives, while strict liability and negligence have weaker, similar effects. Conversely, when consumers underestimate risk, strict liability maximizes merger incentives, and no liability minimizes them. We also demonstrate that horizontal mergers without efficiency effects can unexpectedly increase welfare under no liability or negligence when consumers underestimate risk—a result that is impossible under strict liability.
{"title":"Product liability influences incentives for horizontal mergers","authors":"Andreea Cosnita-Langlais , Tim Friehe , Eric Langlais","doi":"10.1016/j.irle.2025.106302","DOIUrl":"10.1016/j.irle.2025.106302","url":null,"abstract":"<div><div>This paper explores how product liability rules affect merger incentives, with consumer risk perception as a key factor. We find a striking contrast: when consumers overestimate product risk, no liability generates the strongest merger incentives, while strict liability and negligence have weaker, similar effects. Conversely, when consumers underestimate risk, strict liability maximizes merger incentives, and no liability minimizes them. We also demonstrate that horizontal mergers without efficiency effects can unexpectedly increase welfare under no liability or negligence when consumers underestimate risk—a result that is impossible under strict liability.</div></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"84 ","pages":"Article 106302"},"PeriodicalIF":1.0,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145118559","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-01Epub Date: 2025-08-06DOI: 10.1016/j.irle.2025.106285
Bertrand Chopard
This paper develops a liability model that incorporates both patient heterogeneity and demand for healthcare services. After choosing the quality level of care, healthcare providers use diagnostic information to decide whether to treat patients based on their individual risk profiles. This information determines both the expected treatment costs and the potential compensation in case of a medical accident. We show that under strict liability, a fixed prospective payment can discourage providers from treating most high-risk patients — a phenomenon known as negative defensive medicine — and can lead to under-investment in care quality for those who are treated. Under a negligence rule, high-risk patients may also be denied care, but to a lesser extent. However, the negligence rule may incentivize providers to over-invest in care quality. This inefficiency can be partially mitigated by adjusting the prospective payment level, allowing the negligence rule to better align providers’ incentives with the socially efficient level of care.
{"title":"Liability law, Defensive medicine and Healthcare quality","authors":"Bertrand Chopard","doi":"10.1016/j.irle.2025.106285","DOIUrl":"10.1016/j.irle.2025.106285","url":null,"abstract":"<div><div>This paper develops a liability model that incorporates both patient heterogeneity and demand for healthcare services. After choosing the quality level of care, healthcare providers use diagnostic information to decide whether to treat patients based on their individual risk profiles. This information determines both the expected treatment costs and the potential compensation in case of a medical accident. We show that under strict liability, a fixed prospective payment can discourage providers from treating most high-risk patients — a phenomenon known as negative defensive medicine — and can lead to under-investment in care quality for those who are treated. Under a negligence rule, high-risk patients may also be denied care, but to a lesser extent. However, the negligence rule may incentivize providers to over-invest in care quality. This inefficiency can be partially mitigated by adjusting the prospective payment level, allowing the negligence rule to better align providers’ incentives with the socially efficient level of care.</div></div>","PeriodicalId":47202,"journal":{"name":"International Review of Law and Economics","volume":"84 ","pages":"Article 106285"},"PeriodicalIF":1.0,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144829918","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
扫码关注我们
求助内容：
应助结果提醒方式：
京公网安备 11010802042870号