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.

The integration of AI for healthcare redefines medical liability, converting decision-making into a collaborative process involving a technological tool and its user. When a harm is caused, both users and manufacturers of AI may be responsible. The judicial system has yet to address claims of this nature. We build a model with bilateral care to study which combinations of liability rules are socially efficient. Both agents could face strict liability, be subject to negligence rules or face hybrid regimes: one agent faces a fault liability regime, while the other operates under strict liability. We highlight two crucial elements: (i) the sharing scheme of the payment of compensation between users and producers (ii) the nature of their cares (complements or substitutes). The latest AI Liability Directive from the European Parliament in the field of medicine advocates the implementation of a strict liability regime for producers and a fault liability regime for users. We show that this regime is socially efficient. A novel framework is not necessary.

We study the market for AI systems that are used to help to diagnose and treat diseases, reducing the risk of medical error. Based on a two-firm vertical product differentiation model, we examine how, in the event of patient harm, the amount of the compensation payment, and the division of this compensation between physicians and AI system producers affects both price competition between firms, and the accuracy (quality) of AI systems. One producer sells products with the best-available accuracy. The other sells a system with strictly lower accuracy at a lower price. Specifically, we show that both producers enjoy a positive market share, so long as some patients are diagnosed by physicians who do not use an AI system. Any transfer in compensation payment from the physician to the AI producer in the case of a diagnostic error will be passed on in full to the physician via the price of the AI system. The quality of the AI diagnosis system is independent of how any compensation payment to the patient is divided between physicians and producers. However, the magnitude of the compensation payment matters. An increase in compensation increases demand for both AI systems. In addition, the higher the compensation paid to the harmed patient, the higher the quality of the low-quality AI system. As the other firm continues to offer the highest accuracy level, any increase in compensation will decrease vertical differentiation, thereby increasing price competition between firms.

In real life situations, potential offenders may only have a vague idea of their own probability of getting caught and possibly, convicted. As they have beliefs regarding this probability, they may exhibit optimism or pessimism. Thus there exists a discrepancy between the objective expected fine and the subjective expected fine. In this context, we investigate how the fact that the choice whether or not to commit an harmful act is framed as a decision under ambiguity can modify the standard Beckerian results regarding the optimal fine and the optimal resources that should be invested in detection and conviction.

In this paper, we study the effect of competition on the plural dimensions of hospital quality in a market with regulated prices. Our results are obtained with the standard model of hospital competition where a distinction can now be made between two different dimensions of quality while using fair general demand and cost structure. In our setting, hospitals can choose to invest either in the quality of health care services which reduces exposition to the risk of medical error, or in another dimension of quality which is independent to the risk of medical malpractice (appropriateness, patient-centeredness, amenities, etc.). We derive the conditions under which an intensified competition can not only raise or decrease hospital quality, but can also lead to a substitution between the two dimensions of quality. We also investigate how hospital competition and tort law may interact to help improve quality of care by deterring negligent behaviors of providers of care. Lastly, we use a model of strategic pretrial negotiation under asymmetric information to examine the effect of hospital competition on the resolution of medical disputes through its effect on quality.

La loi Kouchner du 4 mars 2002 souhaitait encourager la résolution amiable des litiges médicaux avec la mise en place de nouvelles instances extrajudiciaires : les commissions régionales de conciliation et d’indemnisation. Dans le même temps, elle posait la responsabilité pour faute des professionnels et établissements de santé comme le régime de principe. Dans cet article, nous étudions comment ces deux changements dans la procédure de résolution des litiges ont pu influencer le comportement de prévention des professionnels et établissements de santé au travers notamment des indemnisations versées et des incitations des patients à aller en justice, et ce, en présence d’une asymétrie d’information quant à la valeur exacte du dédommagement obtenu par le patient en cas de procès. Classification JEL : K32.

We study how apparently healthy individuals arbitrate between primary and secondary health prevention under ambiguity. In our model, each individual simultaneously chooses the level of effort for the two types of prevention. Ambiguity relates to either the probability of disease occurrence or the effectiveness of secondary prevention. We find that pessimistic individuals invest more in primary prevention and less in secondary prevention when the effectiveness of secondary prevention is ambiguous. Conversely, pessimistic individuals invest more in secondary prevention and less in primary prevention when the probability of disease occurrence is ambiguous. When the effectiveness of secondary prevention is ambiguous, optimistic individuals invest more in secondary than primary prevention. We find also a substitution effect between the two types of prevention. The latter generates indirect effects of pessimism and optimism on each type of prevention which may reverse our results when they outweigh the direct effects.

The Kouchner law of March 4, 2002 wanted to encourage the out-of-court resolution of medical disputes with the setting up of new extrajudicial bodies: the regional commissions for conciliation and compensation. At the same time, it aimed at generalizing the negligence liability rule for healthcare professionals and institutions. In this article, we study how these two changes in the dispute resolution procedure may have influenced the prevention behavior of healthcare professionals and institutions through, among other things, the compensations paid and patients' incentives to go to court, in the presence of information asymmetries as to the exact value of the compensation obtained by the patient in the event of a trial.

This paper challenges the commonly held idea that the appeals process lowers the occurrence of legal errors. We show that, even if incorporating the right to bring an appeal in criminal adjudication directly oers the opportunity to correct mistakes made at trial, the …nal impact on the appeals process on the accuracy of judicial decisions is ambiguous because of its eect through trial court decision-makers'eort and crime deterrence. We …nd out that according to (i) whether trial court decision-makers are rather reputation-concerned or socially-motivated, (ii) the distribution of the population of potential oenders and (iii) the marginal eect of decision-makers'eort on the probability of wrongful conviction compared to wrongful acquittal, implementing an appeals process may spur decision-makers to reduce their eort and thus be detrimental to the accuracy of legal decisions. We show that this result is true whether an appeal can be brought both after an acquittal or a conviction at trial, or the right to bring an appeal is limited by double jeopardy.

This paper challenges the commonly held belief that the appeals process reduces the occurrence of legal errors. We show that, although the right to file an appeal or request adjudication offers an opportunity to correct mistakes made at trial, the final impact of the appeals process on the accuracy of judicial decisions is not always desirable because of its effects on the trial court decisionmaker's effort and on deterrence. In particular, we find that if (i) the trial court decision-maker is more concerned with legal errors than with her reputation, (ii) few potential offenders attribute high benefits to committing harmful acts and (iii) the additional effort exerted by the decision-maker has a stronger impact on wrongful acquittals than on wrongful convictions, then the implementation of an appeals process may spur a decision-maker to reduce her effort and may thus be detrimental to the quality of judicial output.

Cet article propose une analyse économique originale des systèmes de faillite dans vingt pays (européens et non européens). Notre approche isole dix grandes fonctions des procédures collectives : accessibilité de la procédure, flexibilité de la procédure, coûts de faillites, production d'information, protection des actifs, protection des créances, coordination des stakeholders , décision des stakeholders , sanction des dirigeants, orientation en valeur de la liquidation ou de la continuation. Nous montrons que l'opposition des pays entre systèmes debtor-friendly versus creditor-friendly ou selon l'origine du droit des pays ( civil law versus common law ) est trop rudimentaire pour fonder les décisions d'implantation des investisseurs. Chaque système de faillite présente des forces et des faiblesses clairement identifiables, qui varient selon les catégories de stakeholders considérées. Classification JEL : G33, K15, K22.

L'actuel droit fran9ais de la faillite s6pare le traitement extrajudiciaire des difficult6s des entreprises du traitement judiciaire de leur d6faillance. Depuis la loi de 1994, cette distinction n'a plus un caractere dichotomique car, au cours du reglement amiable, le pr6sident du tribunal de commerce peut ordonner une suspension provisoire des poursuites. A travers une 6tude de cas, nous montrons les inconv6nients potentiels de cet instrument de contrainte. Dans ce but, nous utilisons un jeu de signal car le repr6sentant de l'entreprise en difficulte est le seul, d'une part, a connattre l'exacte situation financiere de son entreprise et, d'autre part, a pouvoir solliciter du pr6sident du tribunal de commerce l'engagement du reglement amiable.

Dans ce papier, nous modelisons les e¤ets attendus du droit de la faillite sur le risque de renegociation strategique des contrats de dette qui resulte d’une asymetrie d’information entre les preteurs et les emprunteurs sur la capacite de remboursement de ces derniers. En opposant les defauts de paiement volontaires et involontaires grâce a un jeu de signal, nous endogeneisons la strategie des emprunteurs en matiere de respect du contrat de dette, celle des banques au travers de la frequence avec laquelle elles font respecter les termes de ce contrat, c’est-a-dire la liquidation en cas de defaillance et, en n, la valeur de la dette renegociee. De la sorte, nous menons une etude d’impact, au sens de l’economie du droit, de l’e¤et sur les parametres precedents de l’orientation du droit de la faillite, pro-debiteurs ou pro-creanciers, une classi cation qui rend compte de l’arbitrage des legislations nationales en la matiere. En n, nous explicitons les conditions sous lesquelles la possibilite o¤erte aux entreprises de renegocier leur contrat de dette (avec/sans l’in‡uence du facteur juridique) permet d’accroitre le bien-etre collectif. Nous remercions pour leurs remarques et commentaires sur une version anterieure de ce travail, les participants de la journee d’etude sur les faillites organisee par le centre de recherches EconomiX de l’Universite Paris X Nanterre (novembre 2006). yBETA-CNRS, Universite Nancy 2, Faculte de Droit-Economie-Gestion, 13 Place Carnot CO 7026, 54035 Nancy Cedex. Email: Bertrand.Chopard@univ-nancy2.fr. zNancy Universite, UFR AES, 4 rue de la Ravinelle CO 7026, 54035 Nancy Cedex. Email: Eric.Langlais@univ-nancy2.fr.

This paper studies the bargaining over merger asset divestiture in the shadow of appeal litigation. We provide theoretical foundations for a recurrent empirical finding, namely that the opportunity cost born by the merging firms due to merger control has direct consequences for the remedy divestiture agreement. Increased severity of the appeal court improves the imperfect merger screening implemented by the agency through remedy negotiation, which possibly argues in favor of a judicial complement to the “regulatory” merger policy enforcement. But the main recommendation for agencies is to devise tools to better deal with the asymmetric information that limits the effectiveness of their merger policy enforcement.

Cet article analyse le mécanisme judiciaire de traitement des situations de surendettement de ménages français. Nous étudions les conditions sous lesquelles un particulier bénéficie d’un effacement de ses dettes en échange d’une liquidation de son patrimoine. Nous réalisons un travail empirique sur la base d’observations issues d’une base de données originale de décisions judiciaires rendues par des tribunaux d’instance de 2003 à 2005. Une hausse de 1 % de la capacité de remboursement du débiteur diminue la probabilité de bénéficier d’une procédure de rétablissement personnel d’un peu plus de 1 %. Au total, l’effacement du passif est décidé de manière assez restrictive par les tribunaux, sur la base de critères ne se limitant pas à une simple appréciation financière de la situation des débiteurs.

This paper provides an analysis of two damage rules (Lost Profit versus Unjust Enrichment) introduced in the French Code de la Propriete Intellectuelle in 2007 (Loi du 27 Octobre 2007, Art. L. 615-7). We use a simple sequential game where both the decisions to infringe and to enforce the patent, as well as the decisions to accommodate, settle or litigate the case, and the outputs decisions (Cournot competition) are endogenous. We characterize the equilibria associated with each rule, and compare their properties. We show that: 1/ the Unjust Enrichment rule provides Patentees with higher damages compensation than the Lost Profit one; however, 2/ Lost Profit induces more deterrence of infringement, and is associated with less trials than Unjust Enrichment; 3/ Unjust Enrichment may deter the Patentee to enforce his right; 4/ when there is a positive probability that the case settles, Patentee's expected utility is higher under Lost Profit than under Unjust Enrichment.

According to Shavell (1995), the appeals process may improve trial court accuracy by inducing trial court judges who fear reversal to devote more effort to obtain correct decisions than they would in the absence of an appeals process. In the present paper, we extend Shavell’s framework in three ways. First, we add on the possibility that judges are sensitive not only to their reputation but also to the social harm caused by the erroneous decisions they take. Second, we take into account the impact of crime deterrence on trial court judges’ effort. Third, we consider simultaneously type-I errors (wrongful convictions) and type-II errors (wrongful acquitals). We show in this setting that the appeals process may lead trial court judges to decrease their effort even if they are strongly reputation-concerned. We explore how this result depends on the sanction, the probability of detection, the efficiency of the judicial system and the distribution of the private benefit of crime. We show that an appeals process does not necessarily reduce the expected social cost of judicial errors but may induce a perverse effect such that it leads to an increase in the expected social cost of judicial errors.

This paper compares the e¤ects of two rules used by courts of law in assessing awards for damages to patentees (Lost Pro…t vs Unjust Enrichment). Our model captures situations in which two innovative …rms compete on a market for a homogenous good, but only one (the Patentee) is successful in innovating …rst and …ling a patent. The other …rm (the Infringer) strategically infringes the patent in order to secure a licensing agreement. In this set up, we show that the Unjust Enrichment rule yields fewer trials conditional on patent enforcement than the Lost Pro…t rule. However, regarding three main objectives of intellectual property laws (protection of innovator’s pro…ts, incentives to invest in R&D, and social welfare), we …nd that neither rule is better than the other, generally speaking. Our model also illustrates how the combination of litigation costs, the size of negotiation gains, and the strength of IPRs shapes the incentives to enforce and infringe IPRs, but in a way which is damages speci…c. Interestingly enough, we …nd that the Lost Pro…t rule preserves the incentives to enforce weak patents, which may be deterred under the Unjust Enrichment rule. Keywords: intellectual property, patent litigation, pretrial negotiations. JEL classi…cation: 03, L1, L4, D8, K2, K4. We thank Robert Cooter, Eli Salzberger, and the participants at the EALE Conference 2012 (Stockholm), the AFSE Conference 2013 (Aix-en-Provence), and the EMLE Midterm Meeting 2014 (Bologna) for their comments and suggestions on previous drafts of this paper. We bene…ted from discussions with Béatrice Dumont and Sylviane Durrande. All errors are ours. yEconomiX UMR 7235 CNRS & Paris Ouest Nanterre, 200 Avenue de la République, 92001 Nanterre cedex, France. Telephone : + 33 (0) 140 977 824. Email: Bertrand.Chopard@u-paris10.fr. zBETA UMR CNRS 7522 and Universités de Lorraine et de Strasbourg, UFR Droit-Economie-Administration, Ile de Saulcy, 57045 Metz Cedex 1. Telephone: +33 (0)3 87 31 57 47. Email: thomas.cortade@univ-lorraine.fr. xCorresponding author : EconomiX UMR 7235 CNRS & Paris Ouest Nanterre, 200 Avenue de la République, 92001 Nanterre cedex, France. Telephone : + 33 (0) 140 975 914. Email: Eric.Langlais@u-paris10.fr.

This paper analyzes the effects of two damage rules (Lost Profi t vs Unjust Enrichment) mainly used by Courts in patent litigations. In our model, the Infringer either is a mere imitator of the Patentee or introduces incremental innovations, and litigation costs are private information such that a pretrial settlement may be better for both litigants. We show that the Unjust Enrichment rule yields less trials than the Lost Pro fit one. But regarding three main objectives, Patentee's protection, incentives to invest in R&D, and social welfare maximization,we find that no rule is better than the other generally speaking. Our model also allows to emphasize how the combination between the size of litigation costs, the negotiation gains and the IPR strength, shapes the incentives to enforce as well infringe a IPR, although in a way specifi c to each rule.