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Papers by Anthony Heyes
Journal of Public Economics, 1999
Despite the fact that (i) when the EPA observes regulatory violations it rarely pursues the viola... more Despite the fact that (i) when the EPA observes regulatory violations it rarely pursues the violator and,(ii) the expected penalty faced by a violator who is pursued is small compared to the cost of compliance, it is still the case that,(iii), firms comply a significant portion of the ...
International Review of Law and Economics, 2004
The risks involved in litigation are well documented; they include the risk of incurring legal ex... more The risks involved in litigation are well documented; they include the risk of incurring legal expenses. While much literature focuses on contingent fees as a mechanism for litigants to shift this risk, there is little work on legal expenses insurance-the dominant means of shifting this risk in Europe. In our model, a risk averse plaintiff may purchase legal expenses insurance. The defendant makes a single settlement offer but is uninformed about the plaintiff's degree of risk aversion. We investigate the effects of insurance cover on settlement amounts, settlement probabilities, the volume of accidents and the ex ante volume of trials. We also investigate the insurance decision. We find that more insurance hardens the plaintiff's negotiating stance and increases the defendant's level of care, but that the overall effects on other variables of interest depend on the plaintiff's risk aversion. Insurance can increase or decrease ex ante welfare.
Journal of Public Economics, 1999
Despite the fact that (i) when the EPA observes regulatory violations it rarely pursues the viola... more Despite the fact that (i) when the EPA observes regulatory violations it rarely pursues the violator and,(ii) the expected penalty faced by a violator who is pursued is small compared to the cost of compliance, it is still the case that,(iii), firms comply a significant portion of the ...
International Review of Law and Economics, 2004
The risks involved in litigation are well documented; they include the risk of incurring legal ex... more The risks involved in litigation are well documented; they include the risk of incurring legal expenses. While much literature focuses on contingent fees as a mechanism for litigants to shift this risk, there is little work on legal expenses insurance-the dominant means of shifting this risk in Europe. In our model, a risk averse plaintiff may purchase legal expenses insurance. The defendant makes a single settlement offer but is uninformed about the plaintiff's degree of risk aversion. We investigate the effects of insurance cover on settlement amounts, settlement probabilities, the volume of accidents and the ex ante volume of trials. We also investigate the insurance decision. We find that more insurance hardens the plaintiff's negotiating stance and increases the defendant's level of care, but that the overall effects on other variables of interest depend on the plaintiff's risk aversion. Insurance can increase or decrease ex ante welfare.